Administration's plan calls for greater accountability, enforcement of subcontracting goals

The Bush administration Oct. 30 released its plan for unbundling large federal contracts, calling for increased accountability of high-level agency officials in eliminating unnecessary contract bundling and mitigating the effects of necessary bundling on small businesses. The new plan is part of the administration¡¦s strategy to give small businesses more opportunities to win federal work.

Contract bundling is the practice of consolidating procurements for goods or services in a single contract. In particular, information technology contracts, services contracts, GSA schedules contracts and governmentwide acquisition contracts are increasingly being bundled, said Angela Styles, administrator of the Office of Federal Procurement Policy in the Office of Management and Budget.

Contracts are bundled for various reasons: to speed the buying process, to simplify the buying process and to enable efficient procurement with fewer acquisition staff. However, the diversity, size or specialized nature of the tasks required, the total value of the anticipated award and the geographical dispersion of performance sites with bundled contracts can limit small-business opportunities, according to the administration¡¦s plan.

Between fiscal years 1992 and 2001, federal agencies reported 1.24 million prime contracts worth $1.89 trillion. Of those contracts, 8.6 percent were bundled, accounting for $840.3 billion, or 44.5 percent of prime contract dollars over that period. Small firms won 13 percent of the bundled prime contract dollars, according to a report prepared for the Small Business Administration by Eagle Eye Publishers Inc. of Fairfax, Va.

Increasing opportunities for small businesses will result in greater competition, in lower costs and more creativity, Styles said.

The administration¡¦s plan calls for:

* Accountability of senior agency management for improving contracting opportunities for small businesses. The Office of Management and Budget will require quarterly reports on agency efforts to address contract bundling issues, Styles said.

* Timely and accurate reporting of contract bundling information, monitored by the President¡¦s Management Council, which is made up of deputy secretaries and administrators from 26 major executive branch departments and agencies.

* Contract bundling reviews for task and delivery orders under multiple-award contract vehicles. These contracts and orders placed under them currently escape reviews of contract bundling, according to the administration. Regulatory changes are required to enact this change.

* Agency contract bundling reviews of proposed acquisitions above agency-specific dollar thresholds, set between $2 million and $7 million. Regulatory changes will be required.

* Strengthening compliance with subcontracting plans where bundling is justified. Requiring agencies to use contractor compliance with subcontracting plans as an evaluation factor for future contract awards. Regulatory changes will be required.

* Facilitating the development of small business teams and joint ventures that can compete for bundled or consolidated contracts. The SBA will determine if regulatory changes are necessary.

The proposed regulatory changes will be prepared by Jan. 31, 2003, according to the administration¡¦s plan.

The administration¡¦s intent is not to slow the process or eliminate procurement efficiencies gained in the past 10 years, but the strategy will ¡§put a bit of sand¡¨ in the wheels of the procurement process, Styles said.

"We need to make sure there are enough resources" to enable procurement officers to handle contracts with a greater number of companies, she said.

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