This report analyzes an "inherently governmental function" is one that, as a matter of law and policy, must be performed by federal government employees and cannot be contracted out because it is "intimately related to the public interest." Concerned that the existence of multiple and/or inconsistent definitions of "inherently governmental functions" might be partly responsible for the alleged contracting out of inherently governmental functions by the Department of Defense (DOD) and other agencies, the 110th Congress enacted legislation (P.L. 110-417) requiring the Office of Management and Budget (OMB) to develop a "single consistent definition" of "inherently governmental functions."

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