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bundling | Georgia Tech Procurement Assistance Center

Georgia Tech Procurement Assistance Center

Proposed contract bundling changes aim to increase small business contracting

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As required by the Small Business Jobs Act of 2010, on June 3, 2015, the FAR Council introduced a proposed change to the FAR contract bundling requirements. 80 Fed. Reg. 31,561-01. The proposed rule aims to improve small business participation in federal contracting by clarifying existing FAR regulations that discourage agency utilization of contracting bundling. The proposed rule would require increased reporting, parses the definitions of “bundling” and “consolidating” of contracts, and requires agencies to publicly justify their decisions to bundle requirements or consolidate contract vehicles. This definitional distinction between bundling of requirements and consolidation of contracts is intended to discourage agencies from combining unrelated requirements or contracts into a single award.

Under the proposed rule, agencies that bundle contracts or requirements in excess of $2 million will face greater notification and reporting requirements. If an agency wants to bundle two existing contracts, it must first notify small businesses at least 30 days beforehand of its intent to bundle its contracts. Agencies will also be required to provide public notice of the agency’s bundling policy and a list of and rationale for any bundled requirements for which the agency solicited offers or issued an award. If adopted, the proposal’s enhanced notification requirements may afford small business contractors an opportunity to protest an agency’s improperly bundled contracts.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/415754/Government+Contracts+Procurement+PPP/Proposed+Contract+Bundling+Changes+Aim+To+Increase+Small+Business+Contracting

Strategic sourcing’s subtle effects on small business

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Do federal strategic sourcing initiatives put price ahead of good business relationships — and hurt both small businesses and the agencies seeking their services in the process?

“The strategic sourcing that Wal-Mart does builds long-term relationships with suppliers,” said Emily Murphy, senior counsel of the House Committee on Small Business. The federal government’s brand of strategic sourcing, however, has become “more about leveraging buying and limiting the number of companies that might be able to compete.”

Keep reading this article at: http://fcw.com/articles/2014/07/23/strategic-sourcing-and-business.aspx

House bill would raise small business goals and require bundling justifications

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The defense policy bill that cleared the House May 22 is controversial for multiple reasons, most stemming from its rejection of many of the Obama administration’s cost-cutting proposals in troop compensation, military bases and weapons systems.

But deep inside the 700-plus page National Defense Authorization Act are also provisions to open more federal contracting opportunities to small businesses, and some of these measures are troubling to major contractors.

“The contracting amendments offered to the NDAA are common-sense reforms that will provide opportunities for small companies trying to break into the federal marketplace,” said Rep. Sam Graves, R-Mo., chairman of the House Small Business Committee. “These amendments address many of the barriers created due to the federal procurement system’s bureaucracy and inefficiency.”

The Graves-sought provisions include one to increase the government-wide small business prime contracting goal from 23 percent of contracting dollars to 25 percent and establish a 40 percent subcontracting goal. Another would require that the administration publish contract bundling and consolidation justifications before issuing requests for proposals for awards under the General Services Administration-run Federal Strategic Sourcing Initiative.

keep reading this article at: http://www.govexec.com/management/2014/05/house-defense-bill-would-raise-small-business-contracting-goals/85249/

It’ll cost $1 million to get better data on bundled federal contracts

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A bill that would require agencies to do a better job of reporting when they combine what could be smaller contracts into a single solicitation would cost about $1 million over five years, according to the Congressional Budget Office (CBO).

The 2014 Contracting Data and Bundling Accountability Act aims to improve how agencies report their consolidated and bundled contracts. Agencies consolidate contracts by including multiple requirements in a single solicitation, and if the resulting contract becomes unsuitable for small businesses to bid on — because it’s too large or diverse, for instance  — it’s considered a bundled contract. Agencies are supposed to identify and then justify the move when they’ve either consolidated or bundled a contract.

CBO said it believed agency data on consolidated and bundled contracts is already available, but the analysis conceded that the Small Business Administration would require better software to retrieve that data from the Federal Procurement Data System. The software upgrade would cost about $1 million between 2014 and 2019, CBO said.

Small business advocates argue that the real problem is federal procurement officials are not properly reporting their consolidated contracts.

Keep reading this article at: http://www.nextgov.com/cio-briefing/2014/04/cost-better-data-bundled-federal-contracts/83164 

House small business committee tries again to increase small business contracting goals

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Agencies have not met the governmentwide goal of awarding at least 23 percent of all prime contracts to small businesses since 2006.

Despite that, Rep. Sam Graves (R-Mo.), chairman of the Small Business Committee, believes it’s time to raise the goal.

Graves introduced legislation last Wednesday (Feb. 26, 2014) to increase the percentage of contracts that are mandated to go to small firms to 25 percent, which equates to about $10 billion more a year for these companies.

The Greater Opportunities for Small Business Act of 2014 would create a goal for agencies to ensure 40 percent of all subcontract awards go to small businesses, increasing from 35.9 percent. The bill also would require that only prime contract awards can count toward the prime contract goal.

Graves introduced the Contracting Data and Bundling Accountability Act of 2014 last week.

This bill will try to bring more data and transparency to how agencies bundle contracts.

Keep reading this article at: http://www.federalnewsradio.com/65/3570622/Rep-Graves-tries-again-to-increase-small-business-contracting-goals 

GAO says agencies need to comply with Congressional requirements for bundled contracts

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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

Is strategic sourcing helping small business?

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Is the Federal Strategic Sourcing Initiative working for small business? Some in Congress and in the contracting community are worried that it’s not.

The concern raised by industry representatives, and by Rep. Richard Hanna (R-N.Y.) at a June 13 hearing of the Contracting and Workforce Subcommittee of the House Small Business Committee, is that the use of strategic sourcing vehicles are making it difficult for small businesses to compete to provide the government with goods and services.

As the single largest purchaser in the world, the U.S. government can alter market sectors when it makes buying decisions. If participation in a few huge, government-wide contracts is limited to relative handful of companies, a possible unintended consequence could be the erosion of competition in certain sectors. And that, in turn, could affect the value the government gets from these contracts by curtailing competition in certain areas over the long term.

Keep reading this article at: http://fcw.com/articles/2013/06/13/strategic-sourcing-small-business.aspx

House defense bill’s contracting provision irks White House

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In threatening a veto of the Defense authorization bill the House passed on Friday, the White House mentioned a host of budgetary reasons, but it also cited a little noticed provision on agency contracting to small businesses.

The fiscal 2013 National Defense Authorization Act faces an uncertain future in the Senate mostly because of its controversial provisions to restore cuts in weapons programs already accepted by the Pentagon.

But a package of eight contracting reform bills long sought by the House Small Business Committee also was included in the larger bill, which passed by a substantial majority, 299-120.

Keep reading this article at http://www.govexec.com//contracting/2012/05/house-defense-bills-contracting-provision-irks-white-house/55845/?oref=govexec_today_nl.

SBA considering mandating set-asides on multiple award contracts

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The federal government finally could reach its goal of awarding 23 percent of all contract dollars to small businesses by allowing, and possibly mandating, agencies to set aside orders against the General Services Administration’s Multiple Awards Schedule and other indefinite delivery-indefinite quantity contracts, according to a senior Small Business Administration official.

Currently, agencies are not required to, and they often are discouraged from setting aside small businesses task and delivery orders that are placed against multiple award contracts. But the Small Business Jobs Act, signed by President Obama in September 2010 instructs SBA and the Office of Federal Procurement Policy to develop guidance that would reverse that policy.

To further its policy deliberations, SBA met with hundreds of small business owners on Wednesday in Manhattan as part of its Small Business Jobs Act tour. The event, one of 13 scheduled in locations across the country in March and April, is designed to provide the public with information about the provisions in the legislation, including 19 focused on contracting.

Arguably the most important, and potentially difficult to implement, provision would dramatically alter how agencies use the GSA schedules and IDIQ contract vehicles, which now represent 28 percent of the federal procurement marketplace. In 1990, IDIQs represented just 14 percent of the total contracting dollars spent by agencies.

SBA and OFPP have held five outreach events in recent months seeking feedback from the public on the best way to implement this provision. The crux of the issue, according to Joe Jordan, associate administrator for government contracting and business development at SBA, is whether to mandate small business set-asides on multiple award and IDIQ contracts, or to allow agencies the discretion to use them.

“We need to get the ‘shall’ versus ‘may’ language right,” he said.

SBA’s decision could make the difference in whether the government finally meets its small business contracting goals. In fiscal 2009, small businesses won 21.9 percent of all small business contract dollars, amounting to $96.8 billion. To meet its 23 percent goal, agencies would have to spend roughly $5 billion more on small businesses, Jordan said.

Mandating small business set-asides could push agencies over that threshold. About $40 billion in contracts was awarded last year off GSA’s Multiple Awards Schedule, and another $150 billion was spent governmentwide through IDIQ contracts.

But the Obama administration also is weighing whether a mandate would discourage agencies from using these contracts, particularly the GSA Schedules. One possible solution, Jordan said, is developing a hybrid solution in which agencies could be required to set aside task-and-delivery orders if they do not meet their small business goals. The agencies that are meeting those goals then would be allowed, but not forced, to use the set-asides.

“The question is how to make this happen without taking away from the speed and efficiency” he said.

The jobs act also establishes a mentor-protégé program to assist small businesses owned by women, service-disabled veterans and those operating in Historically Underutilized Business Zones in competing for contract opportunities. The initiative would be modeled after the 8(a) mentor-protégé program and also take into account the staffing and resources SBA has devoted for these programs, Jordan said.

But these new joint ventures bring possible perils, including opening the door for mammoth contractors, such as Lockheed Martin Corp. and Boeing Co., to begin winning a high percentage of contracts that are intended for small businesses.

“How do we balance that?” Jordan asked. “These can’t be pass-throughs. We can’t let companies play that way.”

SBA expects to submit a proposed rule creating the mentor-protégé programs by the end of May.

Other job act contracting provisions include:

  • Requiring OFPP to establish a governmentwide policy for contract bundling — a process in which several small contracts are consolidated and awarded to one firm, often out of the reach of small businesses. (Before bundling a contract, procurement officials would be required to conduct market research and to have a senior acquisition official sign off on the decision. The rationale for bundling then would be publicly disclosed, either on a federal database, or on the agency’s website. )
  • Establishing a pilot program for collaboration and joint ventures involving small business contractors. (Under the five-year program, $5 million in federal grants will be awarded to nonprofit groups that would then collaborate with small business teams seeking to compete collaboratively for larger procurement contracts. Thus far, 80 to 90 grant proposals have been received, and SBA expects to choose from 10 to 20. Proposals must be received by April 11.)
  • Mandating small businesses to recertify their size status annually. The law also establishes a governmentwide policy for prosecuting companies that fraudulently disclose themselves to be a small business. (The policy would allow an agency to keep the product or services the fraudulent company provided and still sue the business for the entire sum the agency paid through the contract.)
  • Requiring SBA to re-examine its size standards in each of its business categories every five years.

 — by Robert Brodsky – GovExec.com –  March 30, 2011

Defense mandates disclosure of contract bundling

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Defense Department procurement officials who combine a number of small contracts to create one larger deal now must disclose their actions on a public website, according to an interim rule published in the Federal Register on Tuesday.

The practice, known as contract bundling, has long been a top concern of small businesses owners, who argue larger acquisitions will be out of their financial reach. And, while the change to the Defense Acquisition Regulations System does not prohibit contract bundling, it will shine a light on an often-secretive process and possibly provide a window of opportunity for creative and quick-thinking small businesses.

At least 30 days before issuing a solicitation, Defense contracting officers now will be required to publish a notice on FedBizOpps, a federal website that advertises potential contracting opportunities, of their intent to bundle the requirement. If the department has determined that “measurably substantial benefits are expected to be derived as a result of bundling,” it must describe those potential savings.

The rule, which went into place immediately and applies only when the contract is funded entirely by the Pentagon, implements a provision in the 2010 National Defense Authorization Act.

The Federal Acquisition Regulation previously required agencies simply to notify the affected incumbent contractor of their intentions to bundle a requirement. The contractor, generally a small business, would then have the opportunity to engage the government and possibly retain some unbundled business.

But, by mandating broader notification of all contract bundling, a wider swath of the small business community could have the opportunity “to compete for more work of which the firms might otherwise have been unaware,” the notice said.

In a separate rule issued on Tuesday in the Federal Register, the Pentagon now will require its contracting officers to notify congressional defense or intelligence committees within 30 days of issuing sole-source task or delivery orders in excess of $100 million.

The head of the Defense component, meanwhile, must determine in writing that sole-source procurements meet one of four criteria:

  • The task or delivery orders expected under the contract are so integrally related that only one source can reasonably perform the work;
  • The contract provides only for firm-fixed-price task or delivery orders;
  • Only one source is qualified and capable of performing the work at a reasonable price to the government;
  • The contract is necessary because of exceptional circumstances.

The department is accepting public comments on both rules through Sept. 13.

— By Robert Brodsky – GovExec.com – July 14, 2010

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