Overview
This section directs federal agencies to the specific external source—Office of Management and Budget (OMB) Circular No. A-76—for the definitions required to distinguish between commercial activities and functions that must be performed by government employees.
Key Rules
- Incorporation by Reference: The FAR does not list the definitions for Subpart 7.3 internally; instead, it officially adopts the definitions found in Attachment D of OMB Circular No. A-76 (Revised, May 29, 2003).
- Core Definition: The section specifically identifies "inherently governmental activity" as a primary term defined by the Circular.
- Applicability: These external definitions apply to all policies and procedures within FAR Subpart 7.3 regarding the performance of commercial activities.
Practical Implications
- Contracting officers and program managers must consult the OMB Circular, rather than the FAR alone, to determine if a requirement can legally be outsourced to a private contractor.
- If a function is classified as "inherently governmental" under the A-76 definition, it is legally restricted to federal employees and cannot be awarded as a government contract.