Governments often outsource such services as medical care and prisons. The hiring of private parties to perform traditionally governmental functions creates implications for assessing liability. Can governments contract tort liability away to private parties? For example, when a public health clinic employs a private doctor to provide services, the issue is whether the doctor is a public employee with immunity protection/tort claims act liability, or only a private physician with normal malpractice liability. This distinction is crucial to an injured plaintiff and any possible defendants.

In a constitutional-rights context, the general rule is that for any Bivens claim the defendant must be determined to be a government employee and not merely an independent contractor. This is because the Constitution protects rights from the government, not from private entities. Therefore, the issue becomes whether constitutional rights remain when the government hires private entities to perform governmental services.