Overview
This section establishes the federal policy, derived from OMB Circular A-76, which mandates that inherently governmental functions be performed by federal employees while commercial activities should be subjected to public-private competition to determine the most cost-effective provider.
Key Rules
- Performance Mandates: Agencies are strictly prohibited from using contractors to perform inherently governmental activities; these must remain with government personnel.
- Public-Private Competition: Commercial activities must be competed between the agency (public) and contractors (private) in accordance with OMB Circular A-76 procedures.
- Cost Consideration: Agencies must give appropriate weight to cost when deciding between government and contractor performance.
- Protest Rights: The Agency Tender Official (ATO) is legally recognized as an "interested party," granting them the standing to file protests with the Government Accountability Office (GAO).
- Sealed Bidding Restriction: In public-private competitions using sealed bidding, contracting officers are prohibited from holding discussions to correct deficiencies in bids.
Practical Implications
- Agencies must perform rigorous "Inherently Governmental" functions analyses before outsourcing to ensure they do not violate federal law.
- The inclusion of the Agency Tender Official as an interested party creates a unique procurement environment where the government can essentially protest its own solicitation process to ensure a fair comparison between public and private bids.