refers to the consolidation of two or more requirements for goods or services previously
provided or performed under separate smaller contracts into a solicitation for
a single contract that is likely to be unsuitable for award to a small
business because of its size or scope. Although bundling can potentially
reduce costs or improve performance for federal agencies, it can also
limit opportunities for small businesses to receive federal prime contracts.
For this reason, Congress amended the Small Business Act in 1997 to
require that procuring activities comply with certain procedures before
issuing a bundled solicitation. Specifically, the 1997 amendments require
that procuring activities (1) conduct market research to justify acquisition strategies
that could lead to bundled contracts, (2) provide advance notice of bundled
solicitations to the Small Business Administration (SBA) and incumbent
small business contractors, and (3) implement certain procurement
strategies when solicitations involve “substantial bundling.” These steps
are intended to ensure that any bundling is “necessary and justified.” Only “unnecessary
and unjustified” bundling is prohibited under the 1997 and subsequent
The 111th Congress further amended the Small Business Act in 2010 to address
concerns about bundling. Among other things, the Small Business Jobs Act
(P.L. 111-240) requires that (1) agencies include in each solicitation
above the “substantial bundling threshold” provisions inviting bids from
teams or joint ventures of small businesses; (2) SBA promulgate regulations establishing
a government-wide policy on contract bundling to be posted on each agency’s website;
(3) agencies publish listings of and rationales for bundled contracts on their
websites; and (4) SBA report periodically on the activities performed by
its procurement center representatives (PCRs) and commercial market
representatives (CMRs). PCRs and CMRs are SBA employees that work with
procuring activities and private firms, respectively, to promote contracting
with small businesses.
P.L. 111-240 also amended the Small Business Act to subject all federal
agencies to limitations upon the “consolidation” of contract requirements
similar to those that the National Defense Authorization Act for FY2004
imposed upon defense agencies. The definition of “consolidation” is much
like the definition of “bundling,” encompassing the use of a solicitation to
obtain offers for a single contract that satisfies two or more
requirements previously provided or performed under two or more separate
contracts that were lower in cost than the contract for which offers are solicited.
Specifically, P.L. 111-240 prohibits agencies from carrying out an acquisition
strategy that includes consolidation of contract requirements valued in
excess of $2 million unless the agency makes a written determination that
consolidation of the contract requirements is necessary and justified,
among other things. It is presently unclear whether or how the new provisions
on consolidation will be integrated with the existing provisions regarding
bundling, especially in the SBA regulations and the Federal Acquisition
Members of the 112th Congress have introduced several bills addressing contract
bundling, including legislation that would expand the definition of “bundling”
to include new requirements and construction, as well as strengthen the
authority of the Administrator of Small Business in working with
contracting agencies to restructure bundled procurements (e.g., H.R. 2424, H.R. 4081,
H.R. 4310, S. 1334). Other legislation would require reporting on bundled
procurements issued by particular agencies (e.g., H.R. 2000).
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny
Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American
Express, or Discover card number, expiration date, and name on the card.
Indicate whether you want e-mail or postal delivery. Phone orders are preferred
and receive priority processing.