Government Contractors

Who--government employees or contractors--should determine the eligibility of government employees for security clearances, run prisons, or assess the effectiveness of weapons systems being developed? Such questions are central to the continuing debate over whether contractors should assume certain governmental duties and what controls or limitations should be placed on the government's authority to contract out these functions. None of the documents GAO reviewed clearly defined inherently governmental functions. The Office of Management and Budget (OMB) could improve its current guidance by defining governmental functions in terms of relative responsibilities of the government and contractors. OMB, guided by this concept, should develop a short generic list of inherently governmental functions. In addition, agencies should develop their own supplemental guidance. Although most of the contracts GAO reviewed seemed appropriate for contractors to administer on the basis of existing OMB and agency policy guidance, GAO found that the Department of Transportation, the Department of Energy, and the Environmental Protection Agency may have contracted out for some activities that may have involved governmental functions. Because of the difficulty in defining governmental functions, however, GAO could not definitively conclude that these activities involved such functions. In addition, some agency officials said that one of the major reasons that agencies used contractors to administer some functions that might be inherently governmental was the lack of federal positions for employees and the lack of federal employees with sufficient expertise to do the work.

GAO found that: (1) the Office of Management and Budget (OMB) guidance generally indicates that the government should not use consultants to administer work of a policy, decisionmaking, or managerial nature; (2) although most of the contracts reviewed seemed appropriate for contractors to administer on the basis of existing OMB and agency policy guidance, the Department of Transportation, the Department of Energy, and the Environmental Protection Agency contracted for some activities that might have involved governmental functions, but because of the difficulty in defining governmental functions, GAO was unable to conclude that those activities involved such functions; (3) in addition to the difficulty in defining governmental functions and providing related guidance to agencies, agency officials stated that the major reasons they use contractors to administer some functions that may be governmental in nature are the lack of authorized federal positions or employees and the lack of experienced federal employees to do the work; (4) Congress has authorized agencies to contract for inherently governmental functions; and (5) legislation authorizes agency inspectors general to contract for audit services.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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