Mission “critical function”: improving outsourcing decisions within the Intelligence Community

Mission “critical function”: improving outsourcing decisions within the Intelligence Community

Evan Sills

Public Contract Law Journal. 41.4 (Summer 2012): p1007. 

I.    Introduction                     1008

II.   The History of Inherently        1010

Governmental Functions

A. Office of Management and Budget’s Circular A-76 1011

B. Federal Acquisition           1012

Regulation

C. Federal Activities Inventory Retonn Act 1012

III.  The IC’S Increasing Need for Contractors 1013

A, Expansion of the Intelligence Community After 9/11 1014

B. Government Agencies’          1014

Increased Demand for Information from the IC

C. Role of Contractors Within the IC 1015

IV.   The Critical Function            1016

Definition Will Protect Institutional Memory, Improve Oversight, and Increase       Transparency Throughout the IC

A. Origin of the Critical Function–The Acquisition Advisory Panel 1017

B. The OFPP’s Critical Function  1018

Definition and Rationale

V.    Themes in the Final OFPP Letter  1019

Guide the IC Community in Interpreting and Applying the Critical Function Definition

A. The Final OFPP Policy Letter Emphasizes Agency Control over Mission Rather Than over Core Functions in Order to Clarify the Critical Function Definition 1020

B. The Final OFPP Policy Letter  Does Not Prohibit Contractors from Working on Critical Functions, but Agencies Should Encourage Collaboration Between Contractors and Employees Engaged in Such Work

C. The Final OFPP Policy Letter Guides Agencies to Increase Federal Employee Oversight of Government Contractors in Order to Decrease Contractor Policy Discretion When Performing Core Functions 1023

VI.   Improving Transparency Will Benefit IC Agencies by Protecting Institutional Memory and Lowering Costs 1024

VII.  Conclusion                1025

I. INTRODUCTION

Robert Gates does not know how many contractors work in his office: the Office of the Secretary of Defense. (1) Since September 11, 2001, (2) contractors have become so vital to the defense of the United States that the Federal Government is no longer able to protect its citizens without them. (3) This phenomenon has been especially true in the Intelligence Community (IC). (4) The IC’s budget ballooned from around $30 billion on September 10, 2001, to over $75 billion in 2010. (5)

This expansion has raised concerns that core intelligence functions are being performed by contractors instead of government employees. (6) During the summer of 2010, of an estimated 854,000 workers with top-secret security clearance working in the Federal Government, 265,000 of them were contractors. (7) Due to the importance of actionable intelligence data to prevent future terrorist attacks, agencies frequently turn to these contractors to perform necessary work. (8) This practice often conflicts with the traditional “inherently governmental function” (IGF) test, which reserves certain functions to the Government and its employees. (9) While scholars and government officials have long debated what functions fall under the IGF category–and therefore cannot be performed by contractors–most solutions focus on redefining IGFs as opposed to creating an alternative test. (10)

In the spring of 2010, the Office of Federal Procurement Policy (OFPP) issued a proposed policy letter (Proposed OFPP Policy Letter) (11) that was finalized on September 12, 2011 (Final OFPP Policy Letter), (12) advancing a new term called “critical functions.” (13) A critical function is defined as “a function that is necessary to the agency being able to effectively perform and maintain control of its mission and operations.” (14) Some may view this new term as another formulation of an old problem–outsourcing IGFs that ought to be performed by the Government (15) However, this Note suggests that the new critical functions category presents an opportunity to move the IGF debate in a new direction and change how the Government outsources work.

This new category will help the Government better control costs and improve transparency by allowing agencies to identify contractors that are performing critical functions. This is a more favorable approach when compared to the current inflexible policies applied to the IC. Additionally, by utilizing the critical functions category, agencies can protect their institutional memories and control their mission objectives. (16) These benefits are particularly important in the IC, where transparency is notoriously opaque and costs continue to skyrocket with little public justification. (17) The critical function definition focuses on whether an agency has the capacity to perform the functions required to carry out its mission instead of on who is performing tasks traditionally done by government employees. (18) This shift in focus allows agencies to move past the IGF problem and return to traditional government contracting concerns such as cost and transparency. (19)

This Note will evaluate the new critical functions test for government outsourcing and apply it to the IC. The executive branch’s goal should be to balance Congress’s need for oversight, transparency, and best value (20) with the IC’s important mission and unusual activities involving highly specialized skills using information that is often classified. (21) The Government also must consider the evolution of the private sector that serves the IC and its need for balancing contractual risks, protecting proprietary information, and encouraging innovation. (22) Part II reviews the history and current state of the IGF doctrine. Part III highlights the changed nature of the IC after September 11, 2001, and its growing reliance on contractors to meet greater demands. Next, Part IV explains the origin and rationale for the new critical function definition and how it meets different needs than the IGF definition. Part V assesses how the questions posed by the Proposed OFPP Policy Letter can help the IC understand and effectively utilize the final critical function definition. Finally, Part VI looks at the benefits that the critical function definition provides to the Federal Government, namely transparency and lower costs.

II. THE HISTORY OF INHERENTLY GOVERNMENTAL FUNCTIONS

Determining what functions are at the core of Government dates back to the inception of the United States. (23) While the Constitution is relatively silent on what functions are inherently governmental and must be performed by government employees, some clues can be gleaned from the assignment of powers in Articles I and II of the U.S. Constitution. (24) Following government expansion during the New Deal and World War II, President Eisenhower began advocating for the use of contractors instead of expanding government offices to obtain products or services. (25) In 1966, President Johnson’s administration formally created the Circular A-76 through the Bureau of the Budget–the Office of Management and Budget’s (OMB) predecessor. (26) This was the beginning of an ongoing quest to balance government oversight with private sector efficiency.

In the past sixty years, three major sources of guidance on agencies’ outsourcing abilities have evolved: (1) the Circular A-76, (2) the Federal Acquisition Regulation (FAR), and (3) the Federal Activities Inventory Reform (FAIR) Act. While these sources have helped agencies determine when and what to outsource, they have failed to protect agencies from losing their institutional memory and controlling their core functions.

A. Office of Management and Budget’s Circular A-76

The Circular A-76 is the original source of the inherently governmental function definition and has been revised several times to adapt to an administration’s preferences for contracting. (27) Currently, the A-76 defines an IGF as “an activity that is so intimately related to the public interest as to mandate performance by government personnel.” (28) It distinguishes actions that require exercises of “substantial discretion” and states that only actions that are not guided by “existing policies, procedures, directions, orders, and other guidance” must be performed by government employees. (29) The A-76 definition became the baseline for all later debates on how to improve agency outsourcing decisions. (30) The final key part of the A-76 in deciding when to outsource is the policy statement, which focuses on the value of the private sector and competition. (31)

Since the 2003 revision, Congress has attempted to limit activities that can be outsourced due to concerns over giving excessive policy discretion to contractors and the likelihood that contractors would perform IGFs. (32) Even in 1991, there was concern that the A-76 was too general to provide adequate policy guidance to agencies. (33) The constant shifting and interplay between the OMB, under various administrations, and Congress has made the A-76 IGF definition ineffectual and confusing. (34) While the A-76 process has been successful in creating competition in certain areas, it has failed to draw clear lines between IGFs and functions that may be performed by contractors to aid the agency’s mission. (35)

B. Federal Acquisition Regulation

The FAR definition of an IGF is identical to that of the Circular A-76. (36) Significantly, FAR Subpart 7.5 details the policy requirements for service contracts and contains a nonexhaustive list of activities that are considered IGFs, including criminal prosecutions, combat forces, determination and direction of agency policy, “direction and control of intelligence and counter-intelligence operations,” and control of government contracts and budgets. (37) Additionally, there is a nonexhaustive list of activities that are not IGFs but may “approach” being an IGF, including conducting factual findings and studies; supporting and developing budgets, regulations, and planning; and providing legal advice. (38)

While these lists provide some context and concrete examples of IGFs to agencies, they fail to elaborate on how agencies should use these lists. Additionally, these lists are supposed to apply equally to all government contracts (39) and do not differentiate between varying agency needs. These drawbacks make the FAR definition of IGFs unable to adapt to the needs of agencies to protect their core functions.

C. Federal Activities Inventory Reform Act

Building on the existing statutory guidelines provided to agencies regarding IGFs, Congress enacted the FAIR Act in 1998, for the purpose of “provid[ing] a process for identifying the functions of the Federal Government that are not inherently governmental functions.” (40) The Act defines IGFs as “so intimately related to the public interest as to require performance by Federal Government employees.” (41) This shift in focus towards the public interest is consistent with the change in the A-76 policy statement. (42) Additionally, the FAIR Act provides general lists of what qualifies as an IGF and what does not. (43)

Most importantly, the FAIR Act requires every agency to compile an annual list of IGF and non-IGF activities performed by its employees. (44) It also requires agencies to use the A-76 when outsourcing activities deemed to be non-IGFs. (45) The Act provides the only definition that considers the differences between agencies in formulating a list of IGFs. (46)

Unfortunately, the FAIR Act has not effectively reduced the outsourcing of IGFs because its definition and accompanying guidance are vague in classifying what makes an activity inherently governmenta1. (47) The FAIR Act reporting requirements have revealed problems with outsourcing, such as losing institutional memory and control over core functions. However, the Act has failed to provide agencies with a viable solution to these problems. Without a mechanism for agencies to control outsourcing decisions, they will be unable to effectively utilize private sector expertise and serve the public. After spending over forty years debating the definition and parameters of IGFs, (48) agencies needed a new method of controlling their core functions.

III. THE IC’S INCREASING NEED FOR CONTRACTORS

We could not perform our function without them. They serve as our

“reserves,” providing flexibility and expertise we acquire …

Once they are on board, we treat them as if they’re part of the

total force. (49)

Although the end of the Cold War prompted some transformations within the IC, the events of September 11, 2001, profoundly changed the IC’s size and objectives. (50) First, Islamic extremism displayed a new threat that was incompatible with the IC’s existing expectations for its targets. (51) Second, following 9/11, the need for information greatly increased as the number of intelligence clients within the Federal Government grew. (52) Finally, al-Qaeda’s ability to launch the 9/11 attack demonstrated the increased need to acquire intelligence on novel organizational threats (nonstate actors), weaponry (airplanes), and vulnerabilities (transportation systems). (53)

These factors placed enormous pressure on the IC to not only produce a greater quantity of intelligence data, but also to predict and prevent a future attack. As the more recent Fort Hood attack, (54) attempted Christmas bombing, (55) and Yemen cargo bomb plot (56) have shown, the stakes are high and failure has dire consequences.

A. Expansion of the Intelligence Community After 9/11

IC agencies are rapidly expanding in number of employees, budget allocations, and responsibility. For example, the Defense Intelligence Agency more than doubled its number of employees from 7,500 in 2002, to 16,500 in 2010, (57) and, at the Department of Homeland Security (DHS), there are as many federal employees as contractors. (58) Since 9/11, agencies have built thirty-three new buildings, amassing seventeen million square feet of space for top-secret intelligence production. (59) The National Security Agency’s budget has doubled and the Federal Bureau of Investigation has seen an increase in its intelligence responsibility as the number of joint terrorism task forces has grown from 35 to 106. (60)

Record spending by the DoD and DHS has led to an enormous expansion in the use of contractors. Congress spent over $75 billion on intelligence in 2010. (61) In 2007, a presentation prepared by an Office of the Director of National Intelligence (ODNI) senior procurement executive revealed that at least seventy percent of the intelligence budget was going to contractors. (62)

B. Government Agencies’ Increased Demand for Information from the IC

Since the end of the Cold War, both the type of intelligence needed and the number of consumers demanding timely analysis have increased. (63) There are 700,000 local law enforcement officers across 18,000 governmental offices that require intelligence to protect the United States. (64) Meeting the needs of this expanding list of consumers is complicated by the fact that IC agencies must analyze evergrowing amounts of data. (65) Following 9/11, this ballooning in both directions–enormous increases in information inputs and work-product outputs–placed greater pressures on the IC and, by necessity, it turned to contractors to handle the increased workload. (66)

Unfortunately, no plan was in place to control all of these new contractors as they began working in the IC. A by-product of this phenomenon was a less useful work-product. Local law enforcement agencies, seeking more information from the IC community, received “little meaningful guidance” (67) or nothing at all, while the IC focused on the Federal Government’s needs instead of the needs of local communities. (68)

C. Role of Contractors Within the IC

A detailed investigation into the relationship between the IC and contractors, conducted by the Washington Post during the summer of 2010, states that “what started as a temporary fix in response to the terrorist attacks has turned into a dependency.” (69) The IC performs vital work that is fundamental to the protection of the American people, but currently it is incapable of operating effectively without private contractors. (70) The Government typically seeks contractors for three reasons: (1) to start a new government office or program, (2) to perform tasks that require specialized expertise, or (3) to provide support when surge capacity is needed. (71) All three of these factors are present in the IC and explain its reliance on contractors to achieve its missions.

The IC’s dependence on contractors is due to problems that are unique to intelligence as well as those faced by all agencies. (72) The first major problem faced by all governmental agencies is the salary differential between public and private sector employees for similar work. (73) The private sector is able to offer much higher salaries for procurement positions within the IC (74) and the highly specialized skills that intelligence gathering requires. (75) Classified and top-secret security requirements place an additional burden on both the Government and contractors: (76)

Because of its unique characteristics, most IC contracting defies the assumption that outsourcing is cheaper because (a) this work cannot be sent overseas where work is normally cheaper and (b) contractors generally earn larger salaries than their government counterparts, (77) Nevertheless, the IC has turned to contractors to perform its duties–despite the price or how closely related their functions are to IGFs–and federal employees and private contractors increasingly work side-by-side in top-secret IC buildings. (78) While this side-by-side collaboration may have its advantages, (79) without formal structures in place, contractors may end up shaping the agency’s core functions. Therefore, if agencies want to rely heavily on contractors, they must exercise clear oversight and implement a new mechanism to preserve their core mission.

IV. THE CRITICAL FUNCTION DEFINITION WILL PROTECT INSTITUTIONAL MEMORY, IMPROVE OVERSIGHT, AND INCREASE TRANSPARENCY THROUGHOUT THE IC

A new standard is needed to organize the IC in a way that utilizes the private sector for innovation, manpower, and specialized resources while protecting core functions and institutional memory. This new standard also must ensure that government officials are accountable and responsible for federal policy and action. The critical function definition in the Final OFPP Policy Letter provides a viable solution. (80)

A. Origin of the Critical Function–The Acquisition Advisory Panel

The Acquisition Advisory Panel, created by Congress to study federal acquisition policies and recommend changes, reported several findings and recommendations that informed the Final OFPP Policy Letter establishing the critical function definition. (81) One of the foremost issues that led to the eventual creation of the critical function definition was a concern that agencies were contracting out their core functions to such an extent that they would not be able to perform them without contractors. (82) Because the existing mechanisms only focus on IGFs, agencies had difficulty determining if and when they were contracting out core functions that are the mission of the agency. (83) The Acquisition Advisory Panel found that distinctions between governmental employee functions and contractor functions were increasingly muddled because government employees and contractors tend to work side-by-side. (84) Finally, the Panel noted that contractor use varied widely both between and within agencies, (85) even though the IGF definition, the FAR, and the FAIR Act were equally applicable to almost all agencies and military commands. (86)

In response to these findings, the Acquisition Advisory Panel made several recommendations. First, it proposed improvements to the IGF definition (i.e., what duties government employees must perform). (87) Second, it suggested that agencies define their core functions and ensure that government employees either perform or oversee those activities. (88) Finally, it encouraged the removal of prohibitions on personal services contracts (PSCs). (89) The Proposed OFPP Policy Letter indicated that the OFPP created the new critical function definition based on these recommendations. (90)

Critical functions provide the IC with a coherent plan to reestablish control over agency missions by ensuring oversight of all contractors. (91) Some suggest that the Government should act more like a private corporation that outsources via a top-down policy based on “what core functions they need to retain and noncore functions they should buy and the skill sets needed to process the acquisition of such noncore functions.” (92) The critical function definition moves beyond the long-debated IGF definition and the FAR lists and offers agencies a fresh start on managing their core functions and protecting their institutional memories.

B. The OFPP’s Critical Function Definition and Rationale

The Final OFPP Policy Letter defines a critical function as “a function that is necessary to the agency being able to effectively perform and maintain control of its mission and operations.” (93) Instead of drawing a line between which functions can and cannot be performed by contractors, the Final OFPP Policy Letter makes agencies responsible for safeguarding the core functions through providing proper oversight from federal employees who are capable of doing the contractor’s work. (94) Such oversight requires an agency to

have an adequate number of positions filled by Federal

with appropriate training, experience, and expertise to

the agency’s requirements, formulate alternatives,

appropriate actions to properly manage and he accountable for

work product, and … further requires that an agency have

ability and internal expertise to oversee and manage

contractors used to support the Federal workforce. (95)

As applied to IC agencies, this definition provides increased flexibility and allows agencies to contract out important functions while controlling their core mission. (96)

The new critical function definition balances the concerns and desires of many advocates within the Government over outsourcing functions. Frustration with the IGF definition has been widespread among both contractors and the Government. (97) The new critical function definition responds to concerns regarding an agency’s ability to manage increasingly complex contracts (98) by reemphasizing federal employee control over agency missions. This will prevent agencies from “simply tak[ing] the easy way out by contracting for critical functions because they ha[ve] difficulty recruiting and retaining qualified employees in certain areas.” (99) Allen Burman, a former OFPP administrator, stated that the “critical function” definition is a “real change in the nature of the debate today, because now the issue is one of promoting a capable workforce that can control agency missions and operations and effectively oversee contractor support.” (100)

The Final OFPP Policy Letter also provides guidance to agencies seeking to define and protect their critical functions (101) It avoids the problem of the FAIR Act definition and the FAR list of IGF activities by promoting a “case-by-case” evaluation of whether an agency is capable of performing its core functions in-house. (102) The critical functions category responds to calls from congressional advocates for a more expansive IGF definition (103) by opting for a system that allows each agency to balance the ratio between federal employees and contractors on an individual basis. (104) By protecting the core functions of an agency in this manner, the Federal Government can preserve institutional memory. Contractors will no longer perform an entire core function, regardless of whether it is classified as an IGF or not, without oversight and involvement of federal employees. (105)

V. THEMES IN THE FINAL OFPP LETTER GUIDE THE IC COMMUNITY IN INTERPRETING AND APPLYING THE CRITICAL FUNCTION DEFINITION

One of the advantages of the critical function definition is that it is fungible and, therefore, able to adapt to the varying needs of all agencies, including the IC. The Proposed OFPP Policy Letter included a series of question (106) designed to influence the wording and direction of the Final OFPP Policy Letter. (107) Themes raised by three of these questions were incorporated into the final policy and helped analyze how the critical function definition should be construed by the IC.

A. The Final OFPP Policy Letter Emphasizes Agency Control over Mission Rather Than over Core Functions in Order to Clarify the Critical Function Definition

The Proposed OFPP Policy Letter asked: “What additional guidance should be provided to make clear that ‘critical’ work is driven by mission and circumstance, which will differ between agencies and within agencies over time?” (108) This question itself shows the difference between critical functions and previous IGF statutes, displaying increased awareness of mission and the differences among and within agencies. (109) In response, in order to ensure that the critical function definition can adapt to meet the needs and circumstances of each agency, the Final OFPP Policy Letter repeatedly states that agency control over its mission is highly variable between agencies and individual functions.” (110)

Agencies should interpret this to mean that their core functions need not be performed entirely by government employees. Maintaining institutional memory, one of the major concerns of the Acquisition Advisory Panel, only requires that there are government employees within the agency able to perform the function. (111) If only contractors possess the institutional memory, agencies should work to create this memory in-house through either hiring or training so that the agency is no longer fully dependent on contractors. (112) As the multisector workforce becomes more common throughout Government, (113) permitting contractors to work with federal employees on core functions will improve transparency by allowing agencies to acknowledge these activities and will increase competition by allowing more firms to compete for these contracts.

Now that the critical function definition has been finalized, the IC should benefit more than other agencies. The multisector workforce has evolved between intelligence agencies and private contractors to the point where government and contractor offices exist side-by-side in top-secret locations. (114) With the IC spending seventy percent of its budget on contractors, contractor participation in the core functions and missions of IC agencies must be acknowledged. (115) Instead of enforcing a bright line between IGFs performed only by government employees and non-IGFs performed by contractors, agencies should aim to have federal employees working in tandem with contractors. (116)

Agencies have been struggling to define IGFs for many years, without arriving at any consensus. (117) The critical function definition offers an alternative to agencies: they can allow contractors to work on core functions so long as it is overseen by government employees who understand the work being outsourced. (118) This improved oversight will make it easier to ensure that federal employees, and not contractors, exercise policy discretion. While the FAR lists “direction and control of intelligence and counter-intelligence operations” (119) as an IGF, the quantity of data being analyzed and produced simply surpasses the abilities of the individual IC agencies. (120) By looking at their missions as critical functions and acknowledging that contractors are needed to meet the ever-growing demand, (121) agencies will be able to use contractors while preserving institutional memory and ensuring that government employees are responsible for the agency meeting its mission objectives. (122)

B. The Final OFPP Policy Letter Does Not Prohibit Contractors from Working on Critical Functions, but Agencies Should Encourage Collaboration Between Contractors and Employees Engaged in Such Work

The Proposed OFPP Policy Letter asked: “Should the policy letter set out a presumption, or a requirement, in favor of performance of ‘closely associated’ and/or critical functions by federal employees?” (123) In response to concerns, the Final OFPP Policy Letter decided not to create any kind of presumption regarding who should perform these functions. (124) This suggests that contractors can perform certain functions on their own.

There are several concerns with this practice. First, contractors may adversely influence government policy by changing agency objectives. (125) Second, if a contractor malperforms, it can severely damage the Government’s reputation. (126) Finally, contractors may be more interested in profit than in the public interest and, therefore, may not properly balance costs and benefits. (127) Therefore, the OFPP should revisit this policy and set out a requirement that closely associated and critical functions should be performed in conjunction with federal employees. (128) Until then, agencies should encourage this type of collaborative work. Agencies will be able to protect their missions and policies as long as contractors are not formulating government policy on their own. (129)

Fostering cooperation and requiring contractors to work with federal employees in the IC will minimize concerns about outsourcing critical functions. For example, at the National Counterterrorism Center, 1,700 federal employees work alongside 1,200 contractors. (130) A requirement that critical functions are performed in conjunction with federal employees will ensure that these two groups collaborate. (131)

The expansion of the IC after 9/11 “unintentionally encouraged the stretching of scarce analytic resources literally to the breaking point, the dispersal of valuable expertise, and an unprecedented reliance on the contracting community for analytic staffing, workforce management, and training.” (132) Requiring government employees to at least oversee critical functions will prevent the wholesale transfer of core functions to contractors while simultaneously taking advantage of the expertise of the private sector. (133) This will enable agencies to maintain their institutional memory and oversee contractors to ensure they are performing efficiently. (134)

C. The Final OFPP Policy Letter Guides Agencies to Increase Federal Employee Oversight of Government Contractors in Order to Decrease Contractor Policy Discretion When Performing Core Functions

The Proposed OFPP Policy Letter asked for feedback regarding “any additional guidance [that] might be provided to help agencies identify the extent to which a critical function may be performed by a contractor.” (135) Ultimately, the Final OFPP Policy Letter guides agencies to focus on limiting contractors’ policy discretion and increasing federal employee oversight over critical functions, (136) The Acquisition Advisory Panel admitted that the A-76 might be the best tool for “assur[ing] the agencies’ ability to perform their core functions.” (137) The Circular A-76 contains a helpful model for distinguishing discretionary functions from nondiscretionary ones. (138) This model incentivizes agencies not only to create detailed policy guidelines for contractors, but also to maintain consistent supervision over them. (139)

The Final OFPP Policy Letter may reduce the need of the IC to use “bridge” arrangements. Bridge agreements are temporary contracts that exist in the interim when an old contract has terminated and a new contract is being formulated. (140) Generally, these contracts should be avoided because they are an easy way to sidestep limits on what functions contractors perform and may grant contractors too much control. (141) By utilizing the new critical function standard, and allowing for contractors to perform additional core functions, agencies can use normal competition requirements rather than avoiding them through temporary agreements.

VI. IMPROVING TRANSPARENCY WILL BENEFIT IC AGENCIES BY PROTECTING INSTITUTIONAL MEMORY AND LOWERING COSTS

The critical function definition will help IC agencies improve transparency and prevent costs from ballooning out of control. (142) Primarily, the critical function definition enables agencies to determine what functions contractors are performing, thereby ensuring adequate government oversight of all core functions. (143) As demonstrated by the FAIR Act and the increased focus on outsourcing, Congress is engaged in an ongoing search for more information regarding the IC’s use of its budget. (144) There is growing concern that the desire to prevent future terrorist attacks has produced redundancy and overlap among agency activities, personnel, and objectives. (145)

While agencies claim that they need these contractors, some evidence suggests that most contractors are not retained to meet surge capacity needs. (146) IC agencies produce over 50,000 reports annually and there are accounts of extensive redundancy and overlap between agencies. (147) In order to evaluate this issue, agencies must know what functions their contractors are performing.

The IC’s $75 billion budget in 2010 suggests that Congress must investigate these expenditures and ensure that this money is spent efficiently. (148) According to the associate director of National Intelligence for Human Capital, only ten percent of contractors are being used because they are “more cost effective.” (149) The average cost of a government employee is $125,000 per year compared to $207,000 per year for a contractor. (150) While conytactors often possess specialized skills that the IC requires to perform its mission, (151) agencies should consider costs when choosing to outsource for reasons other than necessity. The critical function definition allows agencies to work more closely with contractors and make certain these expenditures are necessary.

Furthermore, agencies consistently encounter problems in counting contractors (152) The critical function definition offers a solution to this issue by shifting the focus of agencies away from contractor counting, to maintaining oversight and control over core functions. (153) The exact number of contractors working on a core agency function should not be relevant to an agency. Rather, an agency should solely consider whether it is losing institutional memory or allowing contractor control over agency policy. (154)

Finally, agencies can now protect their institutional memory by understanding the functions contractors are performing (155) The new critical function definition allows agencies to identify “function[s] whose importance to the agency’s mission and operation requires that … the agency has sufficient internal capability to effectively perform and maintain control of its mission and operations.” (156) For this to be most successful, agencies should encourage federal employees to work alongside contractors on core functions. (157)

VII. CONCLUSION

The intersection of intelligence and outsourcing has created a significant problem that must be addressed. The IC is vital to the protection of U.S. interests, but limits on outsourcing are necessary to protect the IC’s future. Through the Circular A-76 and the FAIR Act, Congress attempted to improve agencies’ ability to outsource, but neither succeeded.

The OFPP’s new critical function definition offers a chance for success. It enables agencies, particularly those within the IC, to move past the IGF fusion and refocus on performing their core missions effectively while safeguarding their institutional memory. Critical functions are flexible and will meet the demands of any agency while balancing the IC’s need for contractors with the Federal Government’s need for oversight and transparency. While the Government has promoted outsourcing through the FAIR Act, and the Obama administration has pushed for insourcing, the critical function balances both of these strategies and has the ability to greatly benefit the IC. (158) Now that the OFPP has finalized the policy letter, the burden shifts to the IC agencies to take advantage of this opportunity to reevaluate their contracting needs.

(1.) Dana Priest & William M. Arkin, National Security Inc., WASH. POST, July 20, 2010, at Al [hereinafter National Security Inc.].

(2.) For a detailed discussion of the events of September 11, 2001, see NAT’L COMM’N ON TERRORIST AtTACKS UPON THE U.S., THE 9/11 COMMISSION REPORT (2004), available at http://govinfolibrary.untedu/911/report/911Report.pdf.

(3.) See Tim SHORROCK, SPIES FOR HIRE: THE SECRET WORLD OF INTELLIGENCE OUTSOURCING 14 (2008) (” ‘Partnerships with [private sector] industry,’ NSA official Deborah Walker says, are now ‘vital to mission success.'”).

(4.) There are seventeen agencies that comprise the Intelligence Community (IC): Air Force Intelligence, Army Intelligence, Central Intelligence Agency, Coast Guard Intelligence, Defense Intelligence Agency, Department of Energy, Department of Homeland Security, Department of State, Department of the Treasury, Drug Enforcement Administration, Federal Bureau of Investigation, Marine Corps Intelligence, National Geospatial-Intelligence Agency, National Reconnaissance Office, National Security Agency, Navy Intelligence, and the Office of the Director of National Intelligence (ODNI). About the Intelligence Community, INTELLIGENCE.GOV, http://www.intelligence.gov/about-the-intelligence-community/ (last visited June 1, 2012).

(5.) See Dana Priest & William M. Arkin, A Hidden World, Growing Beyond Control, WASH. PosT, July 19, 2010, at Al [hereinafter A Hidden World]; Kimberly Dozier, Total U.S. Intelligence Bill Revealed for First Time, MSNBC (Oct. 28, 2010, 6:06 PM), http://www.msnbc.msn.com/id/39898511/ns/us_news-security/.

(6.) See U.S. GOVT ACCOUNTABILITY OFFICE, GAO-08-413T, INTELLIGENCE REFORM: GAO CAN ASSIST THE CONGRESS AND THE INTELLIGENCE COMMUNITY ON MANAGEMENT REFORM INITIATIVES 10 (2008) (“[A] major issue of growing concern … deals with the type of work that is being performed by contractors, the need to determine the appropriate mix of government and contractor employees to mission needs, and the adequacy of oversight and accountability of contractors.”).

(7.) National Security Inc., supra note 1, at A8.

(8.) See Greg Miller, Spy Agencies Outsourcing to Fill Key Jobs, L.A. TIMES, Sept. 17, 2006, at Al (quoting Ronald Sanders, a senior intelligence official, as he discusses the growth in contracting: ” wish I could tell you it’s by design,’ he said. ‘But I think it’s been by default.”).

(9.) See discussion infra Part II.

(10.) JOHN R. LUCKEY ET AL., CONG. RESEARCH SERV., R40641, INHERENTLY GOVERNMENTAL FUNCTIONS AND DEFENSE OPERATIONS: BACKGROUND, ISSUES, AND OPTIONS FOR CONGRESS 7-32 (2009) (examining the various definitions of inherently governmental functions and potential amendments to them).

(11.) Office of Fed. Procurement Policy, Work Reserved for Performance by Federal Government Employees, 75 Fed. Reg. 16,188 (proposed Mar. 31, 2010) [Proposed OFPP Policy Letter].

(12.) Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227 (Sept. 12, 2011) [Final OFPP Policy Letter].

(13.) Id. at 56,236. The proposed policy letter also proposed a consolidation across several statutes to create a singular definition for inherently governmental functions. Proposed OFPP Policy Letter, 75 Fed. Reg. at 16,188. However, this Note is focused primarily on the new critical function definition.

(14.) Final OFPP Policy Letter, 76 Fed. Reg. at 56,236.

(15.) See Commission Examines Wartime Contracting and Inherently Governmental Functions, OMB WATCH (July 13, 2010), http://www.ombwatch.org/node/11130. During a Commission on Wartime Contracting in Iraq and Afghanistan hearing, Commission member Kent Ervin criticized Dr. Al Burman’s praise of the new critical function definition by questioning how it will advance the current debate or help in deciding what functions to outsource. Id.

(16.) See generally ACQUISITION ADVISORY PANEL (AAP), REPORT OF THE ACQUISITION ADVISORY PANEL TO THE OFFICE OF FEDERAL PROCUREMENT POLICY AND THE UNITED STATES CONGRESS 399 (Jan. 2007), available at https://www.acquisition.gov/comp/aap/24102_GSA.pdf [hereinafter Acquisition Advisory Panel Report] (noting that agencies that have contracted out significant portions of their “mission-critical functions” have dealt with consequences including “loss of institutional memory”).

(17.) See A Hidden World, supra note 5, at Al, A8.

(18.) See Final OFPP Policy Letter, 76 Fed. Reg. at 56,229.

(19.) See generally Steven L. Schooner, Desiderata: Objectives for a System of Government Contract Law, 2 PUB. PROCUREMENT L. REv. 103, 103 (2002) (discussing transparency and best value as goals of the federal procurement system).

(20.) See id.

(21.) See About the Intelligence Community, supra note 4.

(22.) See, e.g., National Security Inc., supra note 1, at A10.

(23.) See U.S. GEN. ACCOUNTING OFFICE, GAO/GGD-92-11, GOVERNMENT CONTRACTORS: ARE SERVICE CONTRACTORS PERFORMING INHERENTLY GOVERNMENTAL FUNCTIONS? 2 (1991).

(24.) LUCKEY ET AL., supra note 10, at 2.

(25.) Id. at 5.

(26.) Id.

(27.) The Circular A-76 was revised in 1979, 1983, 1991, 1999, and 2003. LUCKEY ET AL., supra note 10, at 5 n.26.

(28.) OFFICE OF MGMT. & BUDGET, EXEC. OFFICE OF THE PRESIDENT, CIRCULAR No. A-76 REVISED, PERFORMANCE OF COMMERCIAL ACTIVITIES A-2 (May 29, 2003), available at http://www.whitehouse.gov/omb/circulars_a076_a76_incl_tech_correction/ [hereinafter REVISED A-76].

(29.) Id.

(30.) LUCKE.Y ET AL., supra note 10, at 5.

(31.) See L. ELAINE HACHIN, CONG. RESEARCH SERV., RL30124, THE FEDERAL ACIWRMS INVENTORY REFORM ACT AND CIRCULAR A-76, at 4-5 (2007).

(32.) See Major Kevin P. Stiens & Lt. Col. (Ret.) Susan L. Turley, Uncontracting: The Move Back to Performing In-House, 65 A.F. L. REV. 145, 160-63 (2010).

(33.) See GOVERNMENT CONTRACTORS: ARE SERVICE CONTRACTORS PERFORMING INHERENTLY GOVERNMENTAL FUNCTIONS?, supra note 23, at 47 (noting that in 1993 GAO “expressed concerns that DoD may be inappropriately contracting with private sector firms for the administradon of governmental functions”).

(34.) See generally ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 398 (noting the multiple attempts to clarify the definition of an IGF).

(35.) See id. at 399.

(36.) See FAR 2.101 (defining inherently governmental function as “a function that is so intimately related to the public interest as to mandate performance by Government employees”).

(37.) FAR 7.503(c).

(38.) FAR 7.503(d).

(39.) FAR 7.502 (“The requirements of this subpart apply to all contracts for service.”) (emphasis added).

(40.) Federal Activities Inventory Reform Act of 1998, Pub. L. No. 105-270, 112 Stat. 2382 (codified at 31 U.S.C. [section] 501 (2006)); see HALCHIN, supra note 31, at 12-14.

(41.) 31 U.S.C. [section] 501 note, [section] (5)(2)(A) (2006).

(42.) HALCHIN, supra note 31, at 5 (describing the revisions to the A-76).

(43.) 31 U.S.C. [section] 501 note, [section] (5)(2)(B)-(C).

(44.) Id. [section] 501 note, [section] (2)(a). These lists must be made available to the public. Id. [section] 501(c)(1) (Supp. IV 2010).

(45.) LUCKEY ET AL., supra note 10, at 8.

(46.) See 31 U.S.C. [section] 501(e)(2)(c) (requiring each agency to compile its own list of IGFs among its employees).

(47.) As recently as January 2011, the Government Accountability Office (GAO) has stated that the Army, covered by the FAIR Act, has 2,300 contractors performing IGFs and over 45,000 contractors carrying out activities closely associated with IGFs. U.S. GOV’T ACCOUNTABILITY OFFICE, GA0-11-192, DEFENSE ACQUISITIONS: FURTHER ACTION NEEDED TO BETTER IMPLEMENT REQUIREMENTS FOR CONDUCTING INVENTORY OF SERVICE CONTRACT ACTIVITIES 19 (2011).

(48.) See ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 398.

(49.) National Security Inc., supra note 1, at Al (quoting Ronald Sanders, former Chief of Human Capital for the Office of the Director of National Intelligence).

(50.) See GREGORY F. TREVERTON, INTELLIGENCE FOR AN AGE OF TERROR 2 (2009).

(51.) See id. at 15.

(52.) Id. at 3.

(53.) See id. (describing the need for intelligence “across a variety of time horizons”) (emphasis added).

(54.) Maj. Nidal Malik Hasan, an Army psychiatrist, killed twelve soldiers and one civilian while wounding thirty others during a shooting at Fort Hood, Texas, on November 5, 2009. Robert D. McFadden, Gunman Is Seized, N.Y. TIMES, Nov. 6, 2009, at Al.

(55.) An al-Qaeda operative attempted to blow up an airplane flying from Amsterdam, The Netherlands, to Detroit, Michigan, as it neared Detroit using explosives that he had hidden in his underwear. The explosives lit and caused a fire but not an explosion, at which time several passengers detained him and put out the fire. Nick Bunkley, Would-Be Plane Bomber Is Sentenced to Life in Prison, N.Y. TimEs, Feb. 17, 2012, at A3.

(56.) Two bombs concealed in packages were mailed from Yemen to the United States but were intercepted in Great Britain and Dubai before reaching the United States. Times Topics: Cargo Bomb Plot (2010), N.Y. TIMES (Nov. 2, 2010), http://topics.nytimes.com/top/reference/timestopics/subjects/c/cargo_bomb_plot_2010/index.html?sep=lspot&sq=yemen%2Obomb%20plot&st=cse.

(57.) A Hidden World, supra note 5, at A7.

(58.) National Security Inc., supra note 1, at A9.

(59.) A Hidden World, supra note 5, at Al.

(60.) Id.

(61.) Dozier, supra note 5.

(62.) SHORROCK, supra note 3, at 18. For a more voluminous recounting of the scope of the budget increases in the IC, see id. at 18-20.

(63.) For a more in-depth view of the intersection of these two issues, see TREVERTON, supra note 50, ch. 2, “The Changed Target.”

(64.) Id. at 12.

(65.) The National Security Agency (NSA) intercepts and collects 1.7 billion e-mails, phone calls, and other communications every day. A Hidden World, supra note 5, at A7 (emphasis added).

(66.) See Miller, supra note 8, at Al.

(67.) See Dana Priest & William M. Arkin, Monitoring America, WASH. POST, Dec. 20, 2010, at Al.

(68.) For a discussion of the need to share information between the IC and local law enforcement, see AFCEA INTELLIGENCE COMM., THE NEED TO SHARE: THE U.S. INTELLIGENCE COMMUNITY AND LAW ENFORCEMENT (2007).

(69.) National Security Inc., supra note 1, at Al.

(70.) See Robert Brodsky, Wartime Contracting Commission Details Years of Waste, GOV’T EXEC., Feb. 24, 2011, http://www.govexec.com/story_page.cfm?articleid=47183&sid=61 (citing a report published by the Commission on Wartime Contracting stating that “for many years the [government has abdicated its contracting responsibilities–too often using contractors as the default mechanism”).

(71.) U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-07-990, DEPARTMENT OF HOMELAND SECURITY: IMPROVED ASSESSMENT AND OVERSIGHT NEEDED TO MANAGE RISK OF CONTRACTING FOR SELECTED SERVICES 14 (2007).

(72.) RICHARD POSNER, UNCERTAIN SHIELD: THE U.S. INTELLIGENCE SYSTEM IN THE THROES OF REFORM 152-53 (2006).

(73.) See National Security Inc., supra note 1, at A8.

(74.) Id. (claiming that contractors offer double what the Government can pay to an experienced officer, and noting that signing bonuses, like BMWs and $15,000, were offered by Raytheon to software developers with top-secret clearances).

(75.) Examples of these skills include language translation, knowledge of political and military capabilities of state and nonstate actors, and cutting-edge technologies. POSNER, supra note 72, at 152-53, 163.

(76.) See id. at 163.

(77.) A 2008 ODNI study found that contractors made up twenty-nine percent of the intelligence agency workforce but accounted for forty-nine percent of intelligence agencies’ budgets. National Security Inc., supra note 1, at A9.

(78.) At the National Counterterrorism Center in McLean, Virginia, there are a reported 1,700 government workers alongside 1,200 contractors. A Hidden World, supra note 5, at A6.

(79.) See ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 419 (referring to policies that “prohibit federal employees [from] working side-by-side with contract employees” as “inefficiencies”). The AAP also states that “[a]gencies would obviously prefer to avoid such inefficiencies, which cost them time and money.” Id.

(80.) See Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,236 (Sept. 12, 2011) [Final OFPP Policy Letter].

(81.) See ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 391-94, 398-400.

(82.) Id. at 393 (Finding 3).

(83.) See id. at 394 (Finding 4a).

(84.) Id. at 393 (Finding 2).

(85.) Id. at 394 (Finding 5).

(86.) See discussion supra Part II.

(87.) ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 393 (Recommendation 1).

(88.) Id. (Recommendation 2).

(89.) Id. at 394 (Recommendation 3). Personal services contracts (PSCs) are also the subject of current reforms that may impact the IC. For more information, see id. at 400-04.

(90.) See Office of Fed. Procurement Policy, Work Reserved for Performance by Federal Government Employees, 75 Fed. Reg. 16, 188, 16, 191 (proposed Mar. 31, 2010) [Proposed OFPP Policy Letter].

(91.) See Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,236 (Sept. 12, 2011) [Final OFPP Policy Letter].

(92.) U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-07-45SP, COMPTROLLER GENERAL’S FORUM: FEDERAL ACQUISITION CHALLENGES AND OPPORTUNITIES IN THE 21ST CENTURY 8, 10 (2006). The report notes that often in corporations “high levels of management” establish a policy at the outset instead of having separate departments making their own decisions. See id. at 10.

(93.) See Final OFPP Policy Letter, 76 Fed. Reg. at 56,236. The 2010 Proposed OFPP Policy Letter defined a critical function as “a function whose importance to the agency’s mission and operation requires that at least a portion of the function must be reserved to federal employees in order to ensure the agency has sufficient internal capability to effectively perform and maintain control of its mission and operations.” Proposed OFPP Policy Letter, 75 Fed. Reg. at 16,189.

(94.) See Final OFPP Policy Letter, 76 Fed. Reg. at 56,236.

(95.) Id.

(96.) See supra Part III.0 for a discussion of the increasing role of contractors in the IC community.

(97.) See, e.g., COMPTROLLER GENERAL’S FORUM, supra note 92, at 8 (stating that the Government should focus on “determining the right mix of government-performed and contractor-performed work …”).

(98.) See id. at 8.

(99.) ACQUISITION ADVISORY PANEL. REPORT, supra note 16, at 420.

(100.) Are Private Security Contractors Performing Inherently Governmental Functions? Hearing Before Comm’n on Wartime Contracting 7 (2010) (statement by Allen Burman, Former Administrator of the Office of Fed. Procurement Policy).

(101.) See Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,238 (Sept. 12, 2011) [Final OFPP Policy Letter].

(102.) Id. The policy letter highlights several factors that the agency should consider: (1) the “agency’s mission,” (2) the “complexity of the function and need for specialized skill,” (3) the “current strength of the agency’s in-house expertise,” (4) the “current size and capability of the agency’s acquisition workforce,” and (5) the “effect of contractor default on mission performance.” Id.

(103.) See Matthew Weigelt, Senate Has Insourcing Provision in Spending Bill, FED. COMPUTER WK. (Dec. 16, 2010), http://fcw.com/articles/2010/12/16/senate-insourcing-provision-2011-omnibus-appropriations-bill.aspx.

(104.) Id.

(105.) ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 399.

(106.) These questions were chosen based on their relevance to the critical function definition and government actions most commonly performed by intelligence agencies. For the full list of questions, see Office of Fed. Procurement Policy, Work Reserved for Performance by Federal Government Employees, 75 Fed. Reg. 16,188, 16,192-93 (proposed Mar. 31, 2010) [Proposed OFPP Policy Letter].

(107.) Id.

(108.) Id.

(109.) See FAR 7.502 (“The requirements of this subpart apply to all contracts for service.”).

(110.) Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,228-36 (Sept. 12, 2011) [Final OFPP Policy Letter].

(111.) ACQUISITION ADVISORY PANEL. REPORT, supra note 16, at 399.

(112.) See generally id. at 392 (noting that “as the federal workforce shrinks, there is a need to ensure that agencies have sufficient in-house expertise and experience to perform critical functions, make critical decisions, and manage the performance of their contractors”).

(113.) Id.

(114.) Dana Priest & William M. Arkin, The Secrets Next Door, WASH. Post, July 21, 2010, at Al (discussing the “Fort Meade cluster,” where the NSA exists alongside 250 corporations “with a presence” in the cluster).

(115.) SHORROCK, supra note 3, at 18.

(116.) ACQUISITION ADVISORY PANEL. REPORT, supra note 16, at 421 (“[T]here is no good reason to prohibit the federal employee in charge from giving directions or assignments directly to contractor personnel so they can work as a true team.”).

(117.) See discussion supra Part I for the history of inherently governmental functions. A related but separate section of the policy letter adopts the FAIR Act definition of IGFs as the singular definition for IGFs across the Federal Government. Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,228 (Sept. 12, 2011) [Final OFPP Policy Letter].

(118.) See id.

(119.) FAR 7.503(a)(8).

(120.) See A Hidden World, supra note 5.

(121.) See supra Part III.

(122.) See ACQUISITION ADVISORY PANEL. REPORT, supra note 16, at 399.

(123.) Office of Fed. Procurement Policy, Work Reserved for Performance by Federal Government Employees, 75 Fed. Reg. 16,188, 16,192 (proposed Mar. 31, 2010) [Proposed OFPP Policy I defter].

(124.) See Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,233 (Sept. 12, 2011) [Final OFPP Policy Letter].

(125.) DEPARTMENT OF HOMELAND SECURITY: IMPROVED ASSESSMENT AND OVERSIGHT NEEDED, supra note 71, at 3.

(126.) Memorandum from OMB Watch to Office of Mgmt. & Budget, Office of Fed. Procurement Policy, Comments on Notice of Proposed OFPP Policy Letter, Work Reserved for Performance by Federal Government Employees (June 1, 2010) (on file with author).

(127.) ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 399.

(128.) Contra Final OFPP Policy Letter, 76 Fed. Reg. at 56,233 (noting that such presumptions regarding the performance of particular functions are “inappropriate”).

(129.) See id. at 56,240 (specifically listing control over agency policy as an inherently governmental function).

(130.) A Hidden World, supra note 5, at A6.

(131.) See ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 419 (criticizing policies that prevent contractors and employees from working side-by-side).

(132.) Walter Pincus, Lawmakers Want More Data on Contracting Out Intelligence, WASH. POST, May 7, 2006, at A7.

(133.) See discussion infra Part III.C.

(134.) See ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 399.

(135.) Office of Fed. Procurement Policy, Work Reserved for Performance by Federal Government Employees, 75 Fed. Reg. 16,188, 16,192 (proposed Mar. 31, 2010) [Proposed OFPP Policy Letter].

(136.) Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,236-38 (Sept. 12, 2011) [Final OFPP Policy Letter].

(137.) ACQUISITION ADVISORY PANEL REPORT, supra note 16, at 420.

(138.) See REVISED A-76, supra note 28, at A-2. Rather, the use of discretion shall be deemed inherently governmental if it commits the [G]overnment to a course of action when two or more alternative courses of action exist and decision making is not already limited or guided by existing policies, procedures, directions, orders, and other guidance that (1) identify specified ranges of acceptable decisions or conduct and (2) subject the discretionary authority to final approval or regular oversight by agency officials. Id.

(139.) See Id.

(140.) See What Is a Bridge Contract?, DEFENSE ACQUISITION UNIV., https://dap.dau.milhap/pages/qdetails.aspx?cgiSubjectAreaID=35&cgiQuestionID=25907 (last visited June 1, 2012).

(141.) DEPARTMENT OF HOMELAND SECURITY: IMPROVED ASSESSMENT AND OVERSIGHT NEEDED, supra note 71, at 17. For example, the report discusses an instance where the Coast Guard Office of Procurement Operations entered into a temporary “bridge” arrangement for budget, policy, and intelligence services that was subsequently modified twenty times and extended an additional eighteen months beyond the original end date. Id.

(142.) Transparency here means not only the openness of the contracting process, but also for agencies and Congress to understand the costs and benefits of IC analysis. For a more in-depth discussion of transparency in the context of government procurement, see Schooner, supra note 19, at 105.

(143.) See Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,236-37 (Sept. 12, 2011) [Final OFPP Policy Letter] (allowing contractors to perform critical functions but stating that agencies must “retain sufficient management oversight over how contractors are used to support government operations …”).

(144.) See LUCKEY ET AL., supra note 10; Pincus, supra note 132, at A7 (discussing House Intelligence Committee requirement of enhanced reporting requirements on the Counterintelligence Field Activity (CIFA), the Pentagon’s newest and fastest-growing intelligence agency).

(145.) For example, as of the summer of 2010, there were fifty-one government organizations or military units following terrorist funds around the globe and 50,000 intelligence reports produced annually. A Hidden World, supra note 5, at A6. However, Adm. Dennis C. Blair has stated, “much of what appears to be redundancy is, in fact, providing tailored intelligence for many different customers.” Id.

(146.) See id. at A7. About five percent of contractors have been hired due to surge capacity requirements. Conference Call with Dr. Ronald Sanders, Assoc. Dir. of Nat’l Intelligence for Human Capital, Results of the Fiscal Year 2007 U.S. Intelligence Community Inventory of Core Contracting Personnel 4 (Aug. 27, 2008), available at http://cryptome.org/dni082708.pdf [hereinafter Conference Call].

(147.) A Hidden World, supra note 5, at Al.

(148.) See id. at A7.

(149.) Conference Call, supra note 146, at 4.

(150.) Id. at 8.

(151.) See discussion supra Part III.

(152.) See Counting Contractors: Where Are They and What Are They Doing? Hearing Before Comm’n on Wartime Contracting 2 (2009) (statement by Mike Thibault, Co-chair of the Comm’n on Wartime Contracting) (“We observed that there is no single source for a clear, complete, and accurate picture of contractor numbers.”).

(153.) See, e.g., LAURA DICKINSON, OUTSOURCING WAR AND PEACE 58 (2011) (noting the lack of supervision and oversight of contractors in Iraq and Afghanistan).

(154.) See Office of Fed. Procurement Policy, Publication of the Office of Federal Procurement Policy (OFPP) Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, 76 Fed. Reg. 56,227, 56,240 (Sept. 12, 2011) [Final OFPP Policy Letter] (specifically listing control over agency policy as an inherently governmental function).

(155.) See id. at 57,236.

(156.) Office of Fed. Procurement Policy, Work Reserved for Performance by Federal Government Employees, 75 Fed. Reg. 16,188, 16,191 (proposed Mar. 31, 2010) [Proposed OFPP Policy Letter].

(157.) Final OFPP Policy Letter, 76 Fed. Reg. at 56,236 (stating that federal employees should take “special care to retain sufficient management oversight over how contractors are used … and ensure that Federal employees have the technical skills and expertise needed to maintain control of the agency mission and operations”).

(158.) See Interview with Steven Schooner, Nash and Cibinic Professor of Government Contracts Law, The George Washington University Law School, in Washington, D.C. (Mar. 28, 2011).

Evan Sills (evan.sills@gmail.com), a 2012 graduate of The George Washington University Law School, has served for the past year on the Public Contract Law Journal student editorial board. He wishes to thank Professors Joshua Schwartz and Steven Schooner for their guidance as well as Judge Jeri Somas and Danielle Kidd for their insights and suggestions throughout the creation of this Note.

Sills, Evan

Source Citation   (MLA 7th Edition)

Sills, Evan. “Mission ‘critical function’: improving outsourcing decisions within the Intelligence Community.” Public Contract Law Journal Summer 2012: 1007+

 

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