This issue and its legal context has previously been extensively canvassed in this blawg.
The difficulties are further illustrated in the following news item. It discusses the matter whether, or to what extent, the government should provide its own security requirements or contract out the work to private enterprise. Excerpts follow.
Commission Examines Wartime Contracting and Inherently Governmental Functions
On June 18, the Commission on Wartime Contracting in Iraq and Afghanistan (CWC) held the first of two hearings to examine the proper role and oversight of private security contractors (PSCs) in wartime contingency operations. The commission called six individuals from the private, academic, and nonprofit sectors to testify about the thorny issue of defining and enforcing what should and should not be outsourced to PSCs. While disagreement abounded on the issues, commissioners were able to pick out a few lines of consensus among the witnesses.
It is illegal for functions that are defined as "inherently governmental" to be outsourced, yet there was little dispute that contractors are performing inherently governmental tasks in Iraq and Afghanistan. Witnesses, however, did differ on how the government should go about determining whether it contracts out a function or keeps it in-house. Some witnesses, such as Al Burman – president of Jefferson Solutions, a government acquisition consulting firm – and John Nagl – president of the Center for a New American Security, a security and defense policy nonprofit – advocated for the government to stop focusing on the definition of inherently governmental.
Burman argued that because the definition of inherently governmental is so narrow and so few functions fall under it, the government should instead concentrate on a policy that scrutinizes critical functions. The criticality of a function would determine if the government should keep it in-house or contract it out. Experts generally define a critical function as one that is so intimately related to an agency’s mission that the agency must keep at least a portion of the function reserved for government performance to ensure sufficient internal capability to effectively maintain control of the function.
Nagl advanced a similar idea and advocated that the government pick out core functions that it would want to be able to perform without the need for contractors. Theoretically, under this policy, federal agencies would dramatically grow their in-house aptitude to perform these tasks because of their importance.
There was also disagreement about at which level of government the decision to outsource a function should be made. Some witnesses, like Stan Soloway – president of the Professional Services Council, the largest government contracting trade group in the country – stressed that the decision should occur as close to the ground as possible, leaving it up to individual commanders. Commission member Dov Zakheim questioned the rationale behind this argument and pointed out that many dubious contracting decisions have been made because the commander in the field often defaults to contractors to perform support activities, since it is easier for the commander to do so.
Most of the other witnesses argued that the decision to outsource a function should happen at a higher level within government, either at the agency level or at headquarters. Similarly, many also advocated for hard and fast inherently governmental rules, which, theoretically, would provide federal agencies with clear guidelines on which functions could be contracted out.
The major consensus of the day was the need for in-sourcing and creating management competency within government to better oversee contractors, as well as the need for more transparency of the contracting process overall, especially in the use of subcontractors. The importance of these reforms is immense, seeing that the State Department – a budget-crunched, human resources-lacking agency – is taking over contracting oversight responsibilities from the Department of Defense in Iraq as the United States begins to draw down combat troops.
COMMENT: For what it's worth, I would endorse the view that determinations of "inherently governmental" tasks, however defined, should be made up the chain of management, where it might be expected that, being removed from the trees, a decision about whether the subject is in the forest or not might be made more uniformly or consistently. And from that, precedents might evolve which prove useful as guidance. Consistency is one essential goal of effective procurement.
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