Insourcing Functions Performed by Federal Contractors: An Overview of the Legal Issues [May 5, 2011] [open pdf - 237KB]
"Recent Congresses and the Obama Administration have taken numerous actions to promote 'insourcing,' or the use of government personnel to perform functions that contractors previously performed on behalf of federal agencies. Among other things, the 109th through the 111th Congresses enacted several statutes requiring the development of policies and guidelines to ensure that agencies 'consider' using government employees to perform functions previously performed by contractors, as well as any new functions. These statutes also require that 'special consideration' be given to using government personnel to perform certain functions, including those functions (1) performed by government employees in the recent past, (2) closely associated with the performance of inherently governmental functions, (3) performed pursuant to a contract awarded on a non-competitive basis, or (4) performed poorly by a contractor because of excessive costs or inferior quality. The Obama Administration has similarly promoted insourcing. Among other things, on July 29, 2009, the Office of Management and Budget directed federal agencies to conduct a pilot human capital analysis of one program where the agency has concerns about its reliance on contractors, as a prelude to potentially insourcing functions performed by contractors. [...] The 112th Congress is considering legislation that could constrain insourcing initiatives by requiring agencies to conduct a public-private competition and determine that provision of goods or services by federal employees provides 'best value' prior to insourcing (H.R. 1474, S. 785)."
CRS Report for Congress, R41810