Small Businesses Cheer Anti-bundling Legislation

Small Businesses Cheer Anti-bundling Legislation

By Shannon Henry

Rep. Albert Wynn, D-Md., has introduced a bill to amend the Small Business Act to make it harder for federal agencies to create omnibus contracts.
A formal protest has been filed by the small business community against federal government contract bundling.

Rep. Albert Wynn, D-Md., has introduced a bill to amend the Small Business Act to make it harder for federal agencies to create omnibus contracts. Wynn said such contracts limit the number of businesses that have a shot at competing for the work.

"The trend toward bundling represents a threat to small and minority businesses," said Wynn in an interview. "It represents a barrier to market entry."

Wynn's bill, called the Small Business Preservation Act of 1997, was introduced Jan. 7.

Specifically, the Small Business Preservation Act of 1997 (HR 373) would force federal agencies to avoid bundling contracts in cases where small businesses would be shut out, and encourage small businesses as both prime contractors and subcontractors.

Whenever bundling is proposed, the bill calls for the agency to identify the benefits of consolidation; assess the problems small companies would have competing for the omnibus contract; and suggest small businesses team together to be able to go after the contract.

These combination contracts are a main reason so many small and 8(a) designated companies are shut out of the procurement process, Wynn said.

In 1995, the federal government spent more than $202 billion on government-related services, according to the representative's office. However, eight large prime contractors got a larger chunk of that business than all small businesses put together, the office reported.

The issue of contract bundling is currently the single biggest challenge to the 8(a) community, said Fernando Galaviz, vice chairman of the National Federation of 8(a) Companies, Arlington, Va.

"A few companies are sitting pretty well," said Galaviz. "If you're not in that group, you're out of luck."

Galaviz said the companies he represents wholeheartedly support Wynn's proposal.

Contract bundling is currently the single biggest challenge to the 8(a) community, said Fernando Galaviz of the National Federation of 8(a) Companies.
The Small Business Administration has also thrown its weight behind Wynn's bill. "Contract bundling, the consolidation of multiple contract requirements into a single contract solicitation, places many contracts beyond the reach of small firms," wrote Jere Glover, chief counsel for advocacy at the SBA in a Jan. 9 letter to Wynn. "The practice appears [to] be growing in federal procurement and is being justified under the guise of contract simplicity and process efficiency. Advocacy and small businesses are concerned that the consolidation of government purchasing will limit competition and encourage monopoly prices and profits," Glover continued.

The SBA particularly commended Wynn in coming up with a definition of contract bundling, something that had previously been conspicuously missing.

Wynn's definition of contract bundling is: "The practice of consolidating two or more procurement requirements of a type that were previously solicited and awarded as separate small contracts into a single contract solicitation likely to be unsuitable for award to a small business concern."

The large companies that win the bundled contracts are obviously not supporting Wynn, but he said so far there has not been an official statement filed against the bill. Procurement officers, too, may say that it is more efficient to prepare one contract rather than many, Wynn said. Wynn is now trying to round up Republican support for his proposal. "There is bipartisan interest in the bill," he said. "We've got a good chance."

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