Denett: Bundling recommendations likely by May

Recommendations for dealing with bundled contracts should be available by May, Paul Denett, administrator at the Office of Federal Procurement Policy, said today.

Testifying before the House Small Business Committee, Denett said he and his office have sought input from agencies and industry on the issue as OFPP considers the best policy actions regarding bundled contracts, which can hinder small businesses from getting federal contracts.

An agency bundles contracts by tying together several contracts into a larger, overarching one that is competed once instead of individually competing the smaller contracts. Bundling has become increasingly popular since the agencies’ acquisition workforce size has shrunk and their spending has climbed sharply, officials say.

Rep. Nydia Velázquez (D-N.Y.), the committee’s chairwoman, said Denett and OFPP have stalled on setting the policy on unbundling contracts, which is a critical issue that restricts small firms from competing for government business.

“You’re still dragging your feet,” even though President Bush said in 2003 that agencies need to unbundle contracts, Velázquez said.

The Services Acquisition Reform Act Panel, which reviewed a wide range of procurement issues, released a report in 2007 in which it gave OFPP 60 of 89  recommendations. One of those recommendations dealt with bundled contracts.

Velázquez said OFPP has instituted 40 of those recommendations but was disappointed that the bundling issue has been pushed aside.

Denett said OFPP has 12 staff members to handle the work, and there are a lot of recommendations to work on. The unbundling issue also needed more consideration than some of other recommendations, he said.

At the hearing, Velázquez’s committee also raised concerns on how agencies are relying on new approaches to buy goods and services, such as reverse auctions,  General Services Administration’s Schedules contracts and the e-Travel initiative.

“Taken together, these new processes are creating roadblocks for small firms as they try to navigate the federal procurement system,” she said. “If left unchanged, this could lead to a marketplace without the contributions of small businesses.”

Jim Williams, GSA’s commissioner of the Federal Acquisition Service, said many small businesses have schedules contracts. Overall, the schedules contracts generate close to $36 billion in orders annually. Meanwhile, more than 17,000 schedule contract-holders are small businesses.

Nevertheless, he said, a contract gives a business owner license to compete in the federal marketplace but doesn’t guarantee awards.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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