SBA Seeks Comments on Contract Bundling

The Small Business Administration is seeking public comment over the next two months on regulations designed to limit bundling of federal contracts. Bundling is a cost-saving trend that freezes small entrepreneurs out of the competition.

According to the Small Business Reauthorization Act of 1997, federal agencies can only bundle contracts to achieve “measurably substantial benefits” in cost, shorter acquisition cycles or better terms and conditions. Until now, that term had not been defined.

The proposed regulations would define “measurably substantial benefits” as a 10% savings for bundled contracts of $75 million or less and of 5% for consolidated contracts of more than $75 million.

However, they also would allow the top procurement official within each federal agency to approve bundled contracts that don’t meet those requirements if the contract consolidation is deemed “critical to the success of the agency’s mission.”

Small businesses are encouraged to team up to bid for big jobs. The proposed regulations also would ensure that those small business teams would be able to maintain their status as “small.”

The SBA’s government contracting Web site, at https://www.sba.gov/gcmed/regulatory.htm, features a link to the regulations, which were issued on Oct. 25. Any public comment received within 60 days of that date will be reviewed by the agency.

The agency has been chided for delaying implementation of the anti-bundling regulations, passed into law two years ago.

On Thursday, the House Committee on Small Business will hold a full committee hearing on contract bundling, focusing on Defense Department bundling policies. The hearing--the second this year to explore the impact of bundling on small business--will include testimony from small-business owners who say they have been adversely affected by recent large-scale bundles by the Defense Department.