Under the 2009 omnibus-spending bill, non-defense federal agencies are required to devise and implement guidelines for in-sourcing new and contracted-out functions, but GAO has said they are not meeting that mandate.
Agencies have obligated $100 billion a year over the past five years through contracts and in March President Obama issued a memo questioning whether agencies have become too dependent on contactors to carry out core and essential “inherently governmental” functions.
OMB in July issued guidance for managing a multi-sector workforce with an initial framework built on strategic human-capital planning, one that requires agencies to conduct a multi-sector human-capital analysis pilot, and provides criteria on how agencies can use in-sourcing.
The in-sourcing criteria explain what actions agencies are to take to ensure that they consider the use of federal employees. For example, OMB says agencies generally should conduct cost analyses as part of the in-sourcing process.
OMB currently does not plan to formally approve agency in-sourcing guidelines. According to GAO-10-58R, that’s being left to agencies for the most part.
OMB does however recognize that its in-sourcing criteria are likely to be the first step of a longer-term process. Some officials told GAO that they are waiting on additional direction from OMB, particularly as it relates to the definition of inherently governmental functions and when it is appropriate to outsource.
The report also said agencies have identified a number of challenges relating to in-sourcing such as the complexity of the issue within the broader context of managing the multi-sector workforce, the time and level of effort involved in coordinating relevant agency functions, and continued uncertainty about the meaning of key terms, such as "consideration" and "special consideration."
