Objection raised to bundling change

"A Strategy for Increasing Federal Contracting Opportunities for Small Business"

The Coalition for Government Procurement today called for the withdrawal of a proposed rule intended to direct more federal dollars to small business by limiting the practice of contract bundling.

The controversial proposed change to the Federal Acquisition Regulation (FAR) would force agencies to split large contracts into several smaller ones in many cases. "Bundled" contracts are often beyond the reach of small businesses' bidding capabilities, but when split into multiple components, small companies have a shot at some of the pieces.

However, the coalition argued in a written statement that "now is not the time for new acquisition rules that will hamper the government's ability to meet its critical homeland security or national defense needs." Bundled contracts are generally faster to award because they require the agency to go through the contracting process only once.

The coalition, an industry group, offered several other objections:

* The bundling rule is based on the premise that small businesses don't get a fair share of federal dollars. "We believe this assessment is fundamentally flawed and is based on the federal government's inability to accurately capture the true amount of business that flows to small firms," the coalition statement said.

* The rule establishes multiple cost thresholds that automatically trigger a bundling review of a contract — $7 million for the Defense Department, $5 million for NASA, the General Services Administration and the Energy Department, and $2 million for all other agencies. The coalition argues that basing the decision on dollar amounts "encourages government contracting officers to make acquisition decisions solely on price." The officers will tend to favor bids that come in below the review threshold, the coalition argued.

* An agency's small business advocate, the official in charge of determining whether a contract is bundled, lacks the "skills to the make the types of determinations the proposed rule asks of them," the statement reads.

* The rule would lead to an increase in protests from vendors who feel unfairly excluded from contracts, and therefore could delay the procurement process, according to the coalition.

The proposed changes to the FAR and the Small Business Administration's rules were published in the Federal Register Jan. 31.