Federal agencies face a complicated set of decisions in finding the right mix of gov¿t. and contractor personnel to conduct their missions. But, agencies face challenges with increased reliance on contractors to perform core agency missions. A March 2009 Presidential memo tasked the Office of Mgmt. and Budget (OMB) to take several actions in response to this concern. This statement discusses: (1) civilian agencies' development and implementation of guidelines to consider whether contracted functions should be brought in-house -- a process known as insourcing; (2) OMB's proposed policy on work reserved for fed. employees; (3) challenges agencies face in managing the federal workforce; and (4) key tools available for insourcing. Illustrations.