Administration Proposes New Outsourcing Rules The Obama administration is proposing new rules defining which jobs can be outsourced. The draft policy letter, published in the March 31 Federal Register, defines functions that are inherently governmental, closely related to inherently governmental, or critical to an agency’s mission. The Office of Management and Budget’s Office of Federal Procurement Policy is asking for public comment by June 1. The draft adopts the current definition of “inherently governmental” functions contained in the Federal Activities Inventory Reform Act (FAIR Act): “a function that is so intimately related to the public interest as to require performance by Federal Government employees.” The list of such functions ranges from criminal investigations to procurement decisions. Those jobs could not be outsourced. OFPP asks for comment on whether a long list of jobs should be considered inherently governmental. That list includes functions such as cybersecurity, lead systems integration and security guards. “The line has been blurred between functions that are inherently governmental and those that are not, potentially leading to confusion and to inappropriate judgments about when contractors may perform work that should be reserved for performance by Federal employees,” OFPP said. In its request for comment, OFPP asks, “Should the policy letter set out a presumption, or a requirement, in favor of performance of ‘closely associated’ and/or critical functions by federal employees?” The draft says critical functions could be outsourced as long as the agency has the capability to “effectively perform and maintain control over functions that are core to the agency’s mission and operations.” “Some government organizations may be overly reliant on contractors to perform critical functions that, while not inherently governmental, still need to be performed by Federal employees,” OFPP said. The letter also instructs agencies to review their current contracts "to ensure the scope of the work or the circumstances have not changed to the point that inherently governmental authority has been transferred to the contractor." If that has occurred, it says, "agencies may need to in-source work on an accelerated basis" by denying a contract option or terminating the contract. The Professional Services Council, a leading contractor organization, endorsed the draft letter. “The proposed policy is balanced, founded in sound management strategy rather than ideology, and provides a narrowly tailored single definition of ‘inherently governmental functions’ as required by Congress and the White House,” said PSC president Stan Soloway. The policy letter was more than a year in the making; it grew out of President Obama’s March 2009 directive to determine which jobs could be outsourced and which could not. Even before the guidance was published, the administration has begun moving aggressively to insource tens of thousands of jobs, especially in such areas as acquisition, reversing the Bush administration’s emphasis on outsourcing. OFPP administrator Dan Gordon has said the administration’s goal is “rebalancing” the mix of federal employees and contractors. Gordon has emphasized that public and industry comments on the draft policy letter will be seriously considered.