Contractor Versus Government Performance
FAR Subpart 7.3 ensures agencies do not outsource inherently governmental functions and mandates clear procedures for deciding between contractor and government performance.
Overview
FAR Subpart 7.3, "Contractor Versus Government Performance," establishes the policies and procedures for determining whether government functions should be performed by federal employees or contracted out to the private sector. This subpart provides definitions, outlines the policy framework, and specifies requirements for including appropriate solicitation provisions and contract clauses. The subpart is designed to ensure that agencies make informed, consistent, and legally compliant decisions regarding the use of contractors versus in-house government personnel, in alignment with statutory and regulatory requirements. It also references the need for cost comparisons and adherence to Office of Management and Budget (OMB) Circular A-76, where applicable.
Key Rules
- Definitions (7.301)
- Clarifies key terms related to contractor versus government performance decisions.
- Policy (7.302)
- Establishes the policy that agencies must not contract out inherently governmental functions and must follow prescribed procedures for cost comparisons and public-private competition.
- Solicitation Provisions and Contract Clause (7.305)
- Requires inclusion of specific provisions and clauses in solicitations and contracts when contractor performance is being considered.
Responsibilities
- Contracting Officers: Ensure compliance with policy, include required clauses, and document decisions regarding contractor versus government performance.
- Contractors: Understand limitations on what functions can be contracted and comply with solicitation requirements.
- Agencies: Conduct cost comparisons, ensure inherently governmental functions are not outsourced, and maintain documentation for decisions.
Practical Implications
- This subpart exists to prevent the outsourcing of inherently governmental functions and to ensure fair, transparent, and cost-effective decisions regarding contractor use.
- It impacts acquisition planning, especially when agencies consider outsourcing services.
- Common pitfalls include failure to properly document decisions, misclassification of functions, or omission of required solicitation clauses.