Increase in contract bundling hurts small businesses, SBA says

The number and size of bundled contracts issued by federal agencies has reached a 10-year high, to the detriment of small business, according to a new report issued Oct. 2 by the Office of Advocacy of the U.S. Small Business Administration.

The SBA commissioned study was conducted by Eagle Eye Publishing, Fairfax, Va., found that contract bundling increased by 19 percent between fiscal 1992 and 2001. Of the 1.24 million contracts let during that time period, 8.6 percent were bundled contracts.

Contract bundling occurs when an agency consolidates two or more contracts into a single contract when they are renewed.

Small businesses received only 16.7 percent of bundled federal contract dollars in fiscal 2001, and 20 percent of all federal prime contract dollars, according to the study.

The study also found that for every increase of 100 bundled contracts, there is a decrease of 60 contracts for small businesses. The Department of Defense is the agency that most frequently bundles contracts.

"A linchpin of President Bush's small business plan is to ensure that small businesses have full and open competition for government contracts," said Thomas Sullivan, chief counsel for advocacy. "This report shows that the long-term rise in contract bundling by federal agencies has inhibited the ability of small and new contractors to bid for, and win, federal contracts."

For more information about the study, visit the Office of Advocacy Web site at http://www.sba.gov/advo.

The Office of Advocacy of SBA is an independent voice for small business within the federal government. Appointed by the president and confirmed by the U.S. Senate, the chief counsel for advocacy directs the office.