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Washington, D.C.—A critical first step in providing much-needed improvements in oversight and accountability in the federal government’s contracting process is for the Office of Management and Budget (OMB) to clarify the term ‘inherently governmental’ work.

That can best be done, the leader of the nation’s largest independent union of federal employees said today, by using only the definition of that term contained in the Federal Activities Inventory Reform (FAIR) Act and the Federal Acquisition Regulation.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU), who led the fight against the runaway and costly contracting practices of the previous administration, called on OMB to abandon all other directives and inconsistent interpretations impacting that definition.

NTEU, which is pursuing a number of significant changes in federal contracting practices—including a return into the hands of federal employees government work that should have remained in-house in the first place—strongly objected to the 2003 rewrite of OMB contracting rules which effectively expanded and skewed the definition of inherently governmental work to favor private contractors. A return to the FAIR Act definition was one of the key recommendations NTEU presented to the Obama transition team.

The union’s long-time views were strongly underscored in extensive comments submitted jointly to OMB by NTEU and the American Federation of Government Employees (AFGE) as part of OMB’s White House-ordered government-wide review of the federal contracting process.

“The FAIR Act defines inherently governmental as ‘a function which is so intimately related to the public interest as to mandate performance by government employees,’” the comments stated. “This definition is long-standing and provides both sufficient guidance and needed flexibility in determining which functions are best reserved for government workers.”

In addition to adopting the FAIR Act definition, NTEU is calling on OMB to repudiate the presumption in its 2003 revisions in its Circular A-76, which regulates the contracting process, that a government function is commercial in nature unless affirmatively shown otherwise.

That presumption is both bad policy and focused in the wrong direction, the union said. Instead, the work of the public should be viewed as inherently governmental unless shown to be commercial.

Largely after the previous administration rewrote A-76 rules to favor contractors in an effort to turn over as much government work as possible to the private sector, federal contracting exploded; in the period between 2000 and 2008, it climbed from $207 billion to $400 billion. As just one example, the Department of Homeland Security now uses contractors to prepare budgets, develop policy, support acquisition, develop and interpret regulations, reorganize and plan, and administer Circular A-76 efforts.

Overall, runaway privatization has wasted millions of taxpayer dollars—with federal employees repeatedly expected to pick up the pieces and complete the work contractors fail to perform adequately.

NTEU’s recent efforts to address contracting issues include a successful five-year battle to end a misguided and costly Internal Revenue Service program of using private companies to collect tax debts. The agency dropped the program earlier this year.

NTEU is supporting the Correction of Long-standing Errors in Agencies Unsustainable Procurement (CLEAN-UP) Act, legislation introduced by Sen. Barbara Mikulski (D-Md.), and Rep. John Sarbanes (D-Md.), which, among other important steps, would adopt the FAIR Act definition of inherently governmental.

The recently-filed comments noted that public-private competitions for federal work have revealed over the years certain functions performed by federal employees that arguably fall short of satisfying the definition of inherently governmental, but which, nonetheless, must be performed in-house. The CLEAN-UP Act refers to these tasks as “mission-essential functions.”

President Kelley said she is pleased there is recognition in the legislation that some work should be performed in-house because of its close association with an agency’s mission or its inextricable connection to inherently governmental functions.

The kind of work to be competed will become clear, she said, once OMB reaffirms the FAIR Act definition, advises agencies on processes to bring back government work to federal employees, and suggests ways to determine whether certain seemingly commercial activities are nevertheless critical to the agency mission.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.