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OMB Circular No. A-76 provides guidance on the Government’s performance of commercial activities. It is intended to prevent the Government from competing with its own citizens. Briefly, OMB Circular No. A-76 establishes three overall policies:
- Achieve economy and enhance productivity.
- Retain governmental functions in-house.
- Rely on the commercial sector.
OMB Circular No. A-76 does not apply to "inherently governmental functions." These are functions "so intimately related to the public interest as to mandate performance by Government employees." These functions normally require either the exercise of discretion in applying Government authority or the use of value judgments in making decisions for the Government.
- Direction and management of the Armed Services or intelligence activities.
- Direction of Federal employees.
- Regulation of natural resources.
- Regulation of industry and commerce.
- Direction of monetary transactions and entitlements.
These functions may not be contracted out.