[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR7.503]

[Page 117-119]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 7_ACQUISITION PLANNING--Table of Contents
 
              Subpart 7.5_Inherently Governmental Functions
 
Sec.  7.503  Policy.

    (a) Contracts shall not be used for the performance of inherently 
governmental functions.
    (b) Agency decisions which determine whether a function is or is not 
an inherently governmental function may be reviewed and modified by 
appropriate Office of Management and Budget officials.
    (c) The following is a list of examples of functions considered to 
be inherently governmental functions or which shall be treated as such. 
This list is not all inclusive:
    (1) The direct conduct of criminal investigations.
    (2) The control of prosecutions and performance of adjudicatory 
functions other than those relating to arbitration or other methods of 
alternative dispute resolution.
    (3) The command of military forces, especially the leadership of 
military personnel who are members of the combat, combat support, or 
combat service support role.
    (4) The conduct of foreign relations and the determination of 
foreign policy.
    (5) The determination of agency policy, such as determining the 
content and application of regulations, among other things.
    (6) The determination of Federal program priorities for budget 
requests.
    (7) The direction and control of Federal employees.
    (8) The direction and control of intelligence and counter-
intelligence operations.
    (9) The selection or non-selection of individuals for Federal 
Government employment, including the interviewing of individuals for 
employment.
    (10) The approval of position descriptions and performance standards 
for Federal employees.
    (11) The determination of what Government property is to be disposed 
of and on what terms (although an agency

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may give contractors authority to dispose of property at prices within 
specified ranges and subject to other reasonable conditions deemed 
appropriate by the agency).
    (12) In Federal procurement activities with respect to prime 
contracts--
    (i) Determining what supplies or services are to be acquired by the 
Government (although an agency may give contractors authority to acquire 
supplies at prices within specified ranges and subject to other 
reasonable conditions deemed appropriate by the agency);
    (ii) Participating as a voting member on any source selection 
boards;
    (iii) Approving any contractual documents, to include documents 
defining requirements, incentive plans, and evaluation criteria;
    (iv) Awarding contracts;
    (v) Administering contracts (including ordering changes in contract 
performance or contract quantities, taking action based on evaluations 
of contractor performance, and accepting or rejecting contractor 
products or services);
    (vi) Terminating contracts;
    (vii) Determining whether contract costs are reasonable, allocable, 
and allowable; and
    (viii) Participating as a voting member on performance evaluation 
boards.
    (13) The approval of agency responses to Freedom of Information Act 
requests (other than routine responses that, because of statute, 
regulation, or agency policy, do not require the exercise of judgment in 
determining whether documents are to be released or withheld), and the 
approval of agency responses to the administrative appeals of denials of 
Freedom of Information Act requests.
    (14) The conduct of Administrative hearings to determine the 
eligibility of any person for a security clearance, or involving actions 
that affect matters of personal reputation or eligibility to participate 
in Government programs.
    (15) The approval of Federal licensing actions and inspections.
    (16) The determination of budget policy, guidance, and strategy.
    (17) The collection, control, and disbursement of fees, royalties, 
duties, fines, taxes, and other public funds, unless authorized by 
statute, such as 31 U.S.C. 952 (relating to private collection 
contractors) and 31 U.S.C. 3718 (relating to private attorney collection 
services), but not including--
    (i) Collection of fees, fines, penalties, costs, or other charges 
from visitors to or patrons of mess halls, post or base exchange 
concessions, national parks, and similar entities or activities, or from 
other persons, where the amount to be collected is easily calculated or 
predetermined and the funds collected can be easily controlled using 
standard case management techniques; and
    (ii) Routine voucher and invoice examination.
    (18) The control of the treasury accounts.
    (19) The administration of public trusts.
    (20) The drafting of Congressional testimony, responses to 
Congressional correspondence, or agency responses to audit reports from 
the Inspector General, the General Accounting Office, or other Federal 
audit entity.
    (d) The following is a list of examples of functions generally not 
considered to be inherently governmental functions. However, certain 
services and actions that are not considered to be inherently 
governmental functions may approach being in that category because of 
the nature of the function, the manner in which the contractor performs 
the contract, or the manner in which the Government administers 
contractor performance. This list is not all inclusive:
    (1) Services that involve or relate to budget preparation, including 
workload modeling, fact finding, efficiency studies, and should-cost 
analyses, etc.
    (2) Services that involve or relate to reorganization and planning 
activities.
    (3) Services that involve or relate to analysis, feasibility 
studies, and strategy options to be used by agency personnel in 
developing policy.
    (4) Services that involve or relate to the development of 
regulations.
    (5) Services that involve or relate to the evaluation of another 
contractor's performance.
    (6) Services in support of acquisition planning.
    (7) Contractors providing assistance in contract management (such as

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where the contractor might influence official evaluations of other 
contractors).
    (8) Contractors providing technical evaluation of contract 
proposals.
    (9) Contractors providing assistance in the development of 
statements of work.
    (10) Contractors providing support in preparing responses to Freedom 
of Information Act requests.
    (11) Contractors working in any situation that permits or might 
permit them to gain access to confidential business information and/or 
any other sensitive information (other than situations covered by the 
National Industrial Security Program described in 4.402(b)).
    (12) Contractors providing information regarding agency policies or 
regulations, such as attending conferences on behalf of an agency, 
conducting community relations campaigns, or conducting agency training 
courses.
    (13) Contractors participating in any situation where it might be 
assumed that they are agency employees or representatives.
    (14) Contractors participating as technical advisors to a source 
selection board or participating as voting or nonvoting members of a 
source evaluation board.
    (15) Contractors serving as arbitrators or providing alternative 
methods of dispute resolution.
    (16) Contractors constructing buildings or structures intended to be 
secure from electronic eavesdropping or other penetration by foreign 
governments.
    (17) Contractors providing inspection services.
    (18) Contractors providing legal advice and interpretations of 
regulations and statutes to Government officials.
    (19) Contractors providing special non-law enforcement, security 
activities that do not directly involve criminal investigations, such as 
prisoner detention or transport and non-military national security 
details.
    (e) Agency implementation shall include procedures requiring the 
agency head or designated requirements official to provide the 
contracting officer, concurrent with transmittal of the statement of 
work (or any modification thereof), a written determination that none of 
the functions to be performed are inherently governmental. This 
assessment should place emphasis on the degree to which conditions and 
facts restrict the discretionary authority, decision-making 
responsibility, or accountability of Government officials using 
contractor services or work products. Disagreements regarding the 
determination will be resolved in accordance with agency procedures 
before issuance of a solicitation.

[61 FR 2628, Jan. 26, 1996, as amended at 62 FR 40236, July 25, 1997]