Table 2. Open in new tab Implications...

Questions for Outsourcing Decisions

Implications if the answer is “Yes”

Does the function require the exercise of sovereign powers (e.g., representing the United States before an intergovernmental body, use of coercive authority to arrest a person)?

Violation of established principles in law and policy.

Is there a lack of competition for the service?

No presumption of efficiency if outsourced.

Will public values be jeopardized if services are outsourced?

May be a violation of democratic principles depending on the principle(s) violated and measures of citizens’ expectations regarding the function or service.

Has the function been defined as “inherently governmental” by statute?

FAIR Act, 31 U.S.C. sec 502 prohibits outsourcing.

Has the function been defined as “inherently governmental” by agency policy or practice?

Efficiency is not the most important goal.

Is the function such that the contractor’s involvement is so extensive as to preempt government officials’ authority, decision-making process, or discretion?

Violation of established principles in law and policy, especially if agency oversight is considered a constitutional responsibility.

Is the function critical to the agency’s function such that the function is necessary to the agency being able to effectively perform and maintain control of its mission and operations?

Outsourcing may be a risk to the agency’s ability to carry out a mission duly authorized by Congress.

Is necessary oversight of the supplier extensive and costly?

No presumptive preference for outsourcing.

Is oversight of the supplier constrained or limited?

Contractor is likely a “non-state actor” unregulated by Constitutional rule. Program participants are not protected and there is a need for independent accountability mechanisms.

Is the service a public function as narrowly defined by State Action Doctrine?

Only traditionally and exclusively public functions fit category. The contractor is likely a “state actor” and regulated by Constitutional rule.

Does the agency have sufficient internal capability to control its mission and operations and to ensure it is cost effective to contract out?

Violation of OMB A-76 Policy and possibly a violation of Constitution.

Table 2.

Open in new tab

Implications for Outsourcing Decisions

Questions for Outsourcing Decisions	Implications if the answer is “Yes”
Does the function require the exercise of sovereign powers (e.g., representing the United States before an intergovernmental body, use of coercive authority to arrest a person)?	Violation of established principles in law and policy.
Is there a lack of competition for the service?	No presumption of efficiency if outsourced.
Will public values be jeopardized if services are outsourced?	May be a violation of democratic principles depending on the principle(s) violated and measures of citizens’ expectations regarding the function or service.
Has the function been defined as “inherently governmental” by statute?	FAIR Act, 31 U.S.C. sec 502 prohibits outsourcing.
Has the function been defined as “inherently governmental” by agency policy or practice?	Efficiency is not the most important goal.
Is the function such that the contractor’s involvement is so extensive as to preempt government officials’ authority, decision-making process, or discretion?	Violation of established principles in law and policy, especially if agency oversight is considered a constitutional responsibility.
Is the function critical to the agency’s function such that the function is necessary to the agency being able to effectively perform and maintain control of its mission and operations?	Outsourcing may be a risk to the agency’s ability to carry out a mission duly authorized by Congress.
Is necessary oversight of the supplier extensive and costly?	No presumptive preference for outsourcing.
Is oversight of the supplier constrained or limited?	Contractor is likely a “non-state actor” unregulated by Constitutional rule. Program participants are not protected and there is a need for independent accountability mechanisms.
Is the service a public function as narrowly defined by State Action Doctrine?	Only traditionally and exclusively public functions fit category. The contractor is likely a “state actor” and regulated by Constitutional rule.
Does the agency have sufficient internal capability to control its mission and operations and to ensure it is cost effective to contract out?	Violation of OMB A-76 Policy and possibly a violation of Constitution.

Questions for Outsourcing Decisions	Implications if the answer is “Yes”
Does the function require the exercise of sovereign powers (e.g., representing the United States before an intergovernmental body, use of coercive authority to arrest a person)?	Violation of established principles in law and policy.
Is there a lack of competition for the service?	No presumption of efficiency if outsourced.
Will public values be jeopardized if services are outsourced?	May be a violation of democratic principles depending on the principle(s) violated and measures of citizens’ expectations regarding the function or service.
Has the function been defined as “inherently governmental” by statute?	FAIR Act, 31 U.S.C. sec 502 prohibits outsourcing.
Has the function been defined as “inherently governmental” by agency policy or practice?	Efficiency is not the most important goal.
Is the function such that the contractor’s involvement is so extensive as to preempt government officials’ authority, decision-making process, or discretion?	Violation of established principles in law and policy, especially if agency oversight is considered a constitutional responsibility.
Is the function critical to the agency’s function such that the function is necessary to the agency being able to effectively perform and maintain control of its mission and operations?	Outsourcing may be a risk to the agency’s ability to carry out a mission duly authorized by Congress.
Is necessary oversight of the supplier extensive and costly?	No presumptive preference for outsourcing.
Is oversight of the supplier constrained or limited?	Contractor is likely a “non-state actor” unregulated by Constitutional rule. Program participants are not protected and there is a need for independent accountability mechanisms.
Is the service a public function as narrowly defined by State Action Doctrine?	Only traditionally and exclusively public functions fit category. The contractor is likely a “state actor” and regulated by Constitutional rule.
Does the agency have sufficient internal capability to control its mission and operations and to ensure it is cost effective to contract out?	Violation of OMB A-76 Policy and possibly a violation of Constitution.

Note: Bolded questions answered in the affirmative require insourcing.

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