Federal agencies sometimes can achieve savings by consolidating requirements from separate, smaller contracts into fewer, larger contracts. However, consolidation may negatively impact small businesses. Generally, when consolidation makes a contract unsuitable for small businesses, the contract is considered bundled, which is a subset of consolidation. Agencies must justify their actions for both consolidated and bundled requirements.
In a new report issued by the U.S. General Accountability Office (GAO), it’s noted that the Department of Defense (DoD) and the General Services Administration (GSA) — which accounted for more than 80 percent of the consolidated contracts reported by all federal agencies in fiscal years 2011 and 2012 — do not know the full extent to which they are awarding consolidated contracts. This is the result of contracts being misreported in the federal procurement data system (FPDS).
GAO reviewed 157 contracts — more than half of all DOD and GSA contracts that were reported as consolidated — and found that 34 percent of the DoD contracts and all of the GSA contracts in fact were not consolidated. GAO also identified four DoD contracts with consolidated requirements that were not reported as such.
GAO’s study found that DoD generally justified contracts with consolidated requirements in accordance with existing regulations, but DOD and GSA have not yet implemented 2010 changes in the law. Eighty-two percent of the 100 DoD contracts confirmed as consolidated followed existing regulations pertaining to conducting market research, identifying alternatives, and justifying decisions. Most of the contracts that did not comply were justified, but the determinations were not made by an official at a level senior enough to meet defense regulation requirements.
The study also found that the Small Business Administration (SBA) does not collect complete information on bundled contracts and has not reported to Congressional committees as required by federal law.
To read the full GAO report, please visit: http://www.gao.gov/products/GAO-14-36
