Public Law Limitations on Privatization of Government Functions

Abstract

This article asks whether privatization has become so successful as to challenge inherent limits on private control of public functions. It reviews the history of the public-private distinction and explores constitutional limits on the exercise of public power in private hands, including important new scholarship on the nondelegation and exclusive delegation doctrines. The connection of due process to delegation is emphasized, especially procedural controls as accountability mechanisms for overseeing privatized activities. At the statutory level, the largely overlooked potential of the Subdelegation Act to limit as well as sanction delegations to public officials is elaborated. The current OMB A-76 process is addressed in detail. Holding public/private competitions over outsourced government functions is reviewed and its process deficiencies are highlighted. Under current interpretations, the basic question of what inherent government functions agencies cannot privatize is lost in the overall mandate to engage in competitive sourcing. Enhanced procedures for administrative review of this process, including a greater role for the Government Accountability Office (GAO), are recommended. Indeed, the article suggests that the A-76 process encapsulates the public-private debate in such a comprehensive way that the administrative law community can help reshape or rebalance that debate by reforming the process itself.