Obama White House drafts new guidelines to determine who is or isn’t government contractor

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The Obama administration has proposed to overhaul the concept of what constitutes “inherently governmental” activity – with an eye toward keeping jobs that are deemed a core function of the government in-house.

The Office of Federal Procurement Policy has released draft guidelines that propose to redefine the role contractors will play in every aspect of government.

The debate boils down to which tasks belong in the realm of federal employees, because they are directly tied to the public interest, and which contractors can handle. Organized labor and private business are facing off.

The Washington Post has a summary of what the debate is about:

Those tasks include setting agency policy, hiring workers, awarding contracts and performing other core roles, such as inspectors at the Labor Department or airport security screeners with the Department of Homeland Security.

But the guidelines also seek to define tasks that could be performed by either private- or public-sector workers, such as providing technical assistance to government officials evaluating contracts or managing an agency’s information-technology infrastructure.

President Obama has promised to reign in wasteful spending, and issued an executive order to federal agencies soon after he took office directing them to find ways to cut their contracts.

The latest developments mark a continuation of that directive, yet critics worry that the government will end up spending more money because the cost of maintaining a federal payroll is on average almost 40 percent higher than private-sector average salaries.

The Post article continued:

“This is not about a bigger government; it’s about a better government,” said Jeff Zients, deputy director of the Office of Management and Budget.

“There are situations where the mix of federal workers and contractors is out of balance,” Zients said. “This effort is about identifying those areas, correcting them and striking the right balance.”

Some examples of inherently government activities are reported here, along with a more detailed breakdown of how the policy will be implemented, thanks to Federal News Radio:

OFPP also provides 20 examples of inherently government positions, such as conducting criminal investigations, determining agency policy including content and application of regulations, participating on acquisition source selection teams and determining budget, policy and strategy.

For those functions that are not listed among the 20, OFPP says it will develop a test to analyze “whether a function is inherently governmental based on the nature of the function and the level of discretion to be exercised in performing the function.”

OFPP says agencies on a case-by-case basis should look at the nature of the function if it’s uniquely governmental function and whether the job commits the government to decisions that deal with overall policy discretion or approval, or oversight by federal officials.

The policy also defines closely associated with inherently governmental functions and provides 19 examples. These include functions that involve or relate to budget preparation, including workforce modeling, fact finding, efficiency studies and cost analyses, involve or relate to development of regulations, in support of acquisition functions, such as assistance in contract management, technical evaluations and development of statements of work.

Some people, especially interested parties such as federal contractors, aren’t buying it.

“Everything they’re doing these days, all roads lead back to organized labor,” says Brett McMahon, vice president of business development at the federal construction contractor Miller & Long.

“It is kind of par for the course for this administration, how they view the private sector and what it actually means. It’s really kind of stunning  — there is a total and complete lack of any private-sector experience there. Honestly, the guy that is most closely associated with the private-sector or small businesses is [David] Axelrod, who had a private business,” said McMahon.

“It’s just not in the cards with these people, they’re just unable to understand the private sector. Fundamentally I believe that’s true because it’s too stupid after a while to contemplate — to cut more people off from the ability to be a contractor, where the cost to the government of having an individual employee is so much greater than in the private sector. To put more of it on the government when we’re already in debt, I just don’t understand it.”

Eventually, agencies will be asked to take responsibility for things they may have previously outsourced. has a roundup of reactions from different business groups:

The Professional Services Council, a contractor trade association, praised the guidance.

“Rather than focus on labels that serve only as code words for desired outcomes, the proposed policy offers a solid foundation on which agencies can make practical and necessary decisions about how best to execute their missions by appropriately capitalizing on the total suite of resources available to them,” said PSC President Stan Soloway. “We appreciate that the proposed policy letter does not pick winners or losers and is sector neutral when highlighting agency management’s responsibilities.”

The ultimate findings are due in the fall.

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