The Government's Use of Civil Servants and Contractors

GAO reports have shown that Federal agencies have used contractor personnel to do work that involves basic management functions. Although contractors may not be making final decisions, GAO is concerned about the extent to which contractors are influencing the agencies' control of Federal programs and policies. Federal agencies are also using Government employees to provide commercial services that contractors could provide in many cases at a lower cost. GAO believes that, if agencies relied more on the private sector for commercial services, significant savings would accrue to the Government, and agencies would be able to concentrate on their primary objective which is the performance of Government functions. Executive branch policy concerning the use of Federal employees and contractors by agencies is prescribed in the Office of Management and Budget (OMB) Circular A-76. Basically, the Circular provides that agencies should rely on the private sector for commercial goods and services and that all Government functions must be performed by Federal employees. Although the Circular does not permit contracting for the performance of Government functions, it does permit agencies to obtain contractors' advice on such functions. However, it is sometimes difficult to tell where advice stops and performance begins. In GAO opinion, performance begins when the contractor's involvement is so extensive that an agency's ability to develop options other than those proposed by the contractor is limited. GAO recommended that the Director of OMB issue guidelines that will better define the differences between contractors' advice on Government functions and performance of such functions. GAO further recommended that Congress legislate a national policy of reliance on the private sector for commercial goods and services. Such legislation would preclude unilateral shifts in the policy by different administrations by establishing a stable national policy that could not be changed significantly without congressional approval.