7.503
Policy
Contractors cannot perform inherently governmental functions, and agencies must document and justify that contracted work does not cross this line.
Overview
FAR 7.503 establishes the policy that contracts must not be used for the performance of inherently governmental functions—those activities that are so intimately related to the public interest as to mandate performance by government employees. The section provides detailed, non-exhaustive lists of functions that are considered inherently governmental and those that generally are not, but may approach that status depending on circumstances. It also outlines agency responsibilities for making and documenting determinations about whether contracted work is inherently governmental, and provides for review of such decisions by the Office of Management and Budget (OMB).
Key Rules
- Prohibition on Contracting Inherently Governmental Functions
- Agencies must not contract out functions that are inherently governmental, such as criminal investigations, command of military forces, policy determination, contract award/administration, and other listed activities.
- Agency Determinations and OMB Review
- Agencies are responsible for determining whether a function is inherently governmental, but these decisions can be reviewed and modified by OMB officials.
- Examples Provided
- The regulation provides illustrative lists of inherently governmental functions and functions generally not considered as such, but cautions that these lists are not exhaustive.
- Written Determination Requirement
- Agencies must provide the contracting officer with a written determination that contracted work is not inherently governmental, emphasizing the degree of government discretion and accountability retained.
Responsibilities
- Contracting Officers: Must ensure no inherently governmental functions are included in contracts and obtain written determinations from agency officials.
- Contractors: Must not perform inherently governmental functions and should be aware of the boundaries of their roles.
- Agencies: Must establish procedures for making and documenting determinations, and resolve disagreements before solicitation issuance.
Practical Implications
- This section exists to protect the public interest by ensuring only government employees perform critical governmental functions.
- It impacts contract planning, requiring careful analysis of statements of work and clear documentation.
- Common pitfalls include misclassifying functions or failing to document determinations, which can lead to contract protests or compliance violations.