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Washington D.C.—The National Treasury Employees Union (NTEU) today called for steps that would result in a more appropriate balance between federal employees and private sector contractors, thus achieving more effective and efficient delivery of services to the public.

The key step, NTEU told a Senate Homeland Security and Governmental Affairs subcommittee, is for the Office of Management and Budget (OMB) to clarify that the term ‘inherently governmental’ is defined exclusively by the Federal Activities Inventory Reform (FAIR) Act.

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

NTEU told the subcommittee “the explosion in contract spending has led to a drastic increase in the size of the contractor workforce, which has eroded the in-house capacity of agencies to perform many critical functions and has undermined their ability to accomplish their missions.”

The Oversight of Government Management and the Federal Workforce Subcommittee is chaired by Sen. Daniel Akaka (D-Hawaii) and was conducting a hearing on the appropriate federal employee-to-contractor mix.

NTEU offered the Department of Homeland Security (DHS) as an example of the risks to the agency’s missions that can arise from excessive reliance on contractors, pointing out that DHS’s own estimate is that it has 180,000 civilian employees and 200,000 contractors.

NTEU stressed the importance of OMB expressly repudiating the presumption in 2003 revisions to federal contracting rules that a government function is commercial in nature unless affirmatively shown otherwise. “This presumption is not only bad policy,” the union said, “it is also at odds with the FAIR Act’s definition that simply delineates between commercial and inherently governmental functions.”

Earlier this year, OMB’s Office of Federal Procurement Policy issued a proposed policy letter on inherently governmental that adopted the FAIR Act definition, as advocated by NTEU. The union used today’s testimony to caution, however, that the proposed policy letter does not go far enough.

“Under the policy letter, OMB has created comprehensive and thoughtful guidance on two concepts related to inherently governmental—functions closely associated to inherently governmental and critical functions,” NTEU said. “We believe that these types of functions are inextricably linked to inherently governmental and cannot be, even under the circumstances outlined by OMB in the policy letter, responsibly subject to performance by private contractors."

The union added: “NTEU believes the unique mission of each agency will dictate the factors that should be considered in determining if an activity is so closely related to inherently governmental work that it should be performed in-house, even if it does not satisfy the definition of inherently governmental.”

NTEU President Colleen M. Kelley said “NTEU believes that by clarifying the types of functions that should be restricted to performance by federal employees, and providing agencies with the ability to bring contracted work back in-house, a more appropriate balance in federal contracting can be achieved.”

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