[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4081 Reported in House (RH)]

                                                 Union Calendar No. 528
112th CONGRESS
  2d Session
                                H. R. 4081

                          [Report No. 112-725]

 To amend the Small Business Act to consolidate and revise provisions 
         relating to contract bundling, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 17, 2012

   Mr. Graves of Missouri (for himself and Mr. West) introduced the 
 following bill; which was referred to the Committee on Small Business

                           December 21, 2012

 Additional sponsors: Mr. Chabot, Mr. Mulvaney, Mr. Walsh of Illinois, 
 Mr. Hanna, Mr. Schilling, Ms. Herrera Beutler, Mrs. Ellmers, and Mr. 
                                 McKeon

                           December 21, 2012

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
    [For text of introduced bill, see copy of bill as introduced on 
                           February 17, 2012]


_______________________________________________________________________

                                 A BILL


 
 To amend the Small Business Act to consolidate and revise provisions 
         relating to contract bundling, and for other purposes.


 


    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Contractor Opportunity Protection 
Act of 2012''.

SEC. 2. CONSOLIDATION OF PROVISIONS RELATING TO CONTRACT BUNDLING.

    Section 44 of the Small Business Act (15 U.S.C. 657q) is amended to 
read as follows:

``SEC. 44. CONTRACT BUNDLING.

    ``(a) Definitions.--In this Act:
            ``(1) Bundled contract.--The term `bundled contract'--
                    ``(A) means a contract that is entered into to meet 
                procurement requirements that are combined in a 
                bundling of contract requirements, without regard to 
                whether a study of the effects of the solicitation on 
                Federal officers or employees has been made; and
                    ``(B) does not include--
                            ``(i) a contract with an aggregate dollar 
                        value below the dollar threshold; or
                            ``(ii) a single award contract for the 
                        acquisition of a weapons system acquired 
                        through a major defense acquisition.
            ``(2) Bundling methodology.--The term `bundling 
        methodology' means--
                    ``(A) a solicitation to obtain offers for a single 
                contract or a multiple award contract;
                    ``(B) a solicitation of offers for the issuance of 
                a task or a delivery order under an existing single or 
                multiple award contract; or
                    ``(C) the creation of any new procurement 
                requirements that permits a combination of contract 
                requirements, including any combination of contract 
                requirements or order requirements.
            ``(3) Bundling of contract requirements.--The term 
        `bundling of contract requirements', with respect to the 
        contract requirements of a Federal agency--
                    ``(A) means the use of any bundling methodology to 
                satisfy 2 or more procurement requirements for new or 
                existing goods or services provided to or performed for 
                the Federal agency, including any construction 
                services, that is likely to be unsuitable for award to 
                a small-business concern due to--
                            ``(i) the diversity, size, or specialized 
                        nature of the elements of the performance 
                        specified;
                            ``(ii) the aggregate dollar value of the 
                        anticipated award;
                            ``(iii) the geographical dispersion of the 
                        contract performance sites; or
                            ``(iv) any combination of the factors 
                        described in clauses (i), (ii), and (iii); and
                    ``(B) does not include the use of a bundling 
                methodology for an anticipated award with an aggregate 
                dollar value below the dollar threshold.
            ``(4) Chief acquisition officer.--The term `Chief 
        Acquisition Officer' means the employee of a Federal agency 
        designated as the Chief Acquisition Officer for the Federal 
        agency under section 16(a) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 1702(a)).
            ``(5) Contract.--The term `contract' includes, for purposes 
        of this section, any task order made pursuant to an indefinite 
        quantity, indefinite delivery contract.
            ``(6) Contract bundling.--The term `contract bundling' 
        means the process by which a bundled contract is created.
            ``(7) Dollar threshold.--The term `dollar threshold' 
        means--
                    ``(A) in the case of a contract for construction, 
                $5,000,000; and
                    ``(B) in any other case, $2,000,000.
            ``(8) Major defense acquisition program.--The term `major 
        defense acquisition program' has the meaning given in section 
        2430(a) of title 10, United States Code.
            ``(9) Previously bundled contract.--The term `previously 
        bundled contract' means a contract that is the successor to a 
        contract that required a bundling analysis, contract for which 
        any of the successor contract were designated as a consolidated 
        contract or bundled contract in the Federal procurement 
        database, or a contract for which the Administrator designated 
        the prior contract as a bundled contract.
            ``(10) Procurement activity.--The term `procurement 
        activity' means the Federal agency or office thereof acquiring 
        goods or services.
            ``(11) Procurement requirement.--The term `procurement 
        requirement' means a determination by an agency that a 
        specified good or service is needed to satisfy the mission of 
        the agency.
            ``(12) Senior procurement executive.--The term `senior 
        procurement executive' means an official designated under 
        section 16(c) of the Office of Federal Procurement Policy Act 
        (41 U.S.C. 1702(c)) as the senior procurement executive for a 
        Federal agency.
    ``(b) Policy.--The head of each Federal agency shall ensure that 
the decisions made by the Federal agency regarding contract bundling 
are made with a view to providing small business concerns with the 
maximum practicable opportunities to participate as prime contractors 
and subcontractors in the procurements of the Federal agency.
    ``(c) Contract Bundling.--
            ``(1) Proposed procurements.--Paragraphs (2) through (4) 
        shall apply to to a proposed procurement if the proposed 
        procurement--
                    ``(A) would adversely affect one or more small 
                business concerns, including the potential loss of an 
                existing contract;
                    ``(B) includes, in its statement of work, goods or 
                services--
                            ``(i)(I) currently being performed by a 
                        small business; and
                            ``(II) if the proposed procurement is in a 
                        quantity or estimated dollar value the 
                        magnitude of which renders small business prime 
                        contract participation unlikely; or
                            ``(ii)(I) that are of a type that the 
                        Administrator through market research can 
                        demonstrate that two or more small businesses 
                        are capable of performing; and
                            ``(II) if the proposed procurement would be 
                        combined with other requirements for goods and 
                        services;
                    ``(C) is for construction and--
                            ``(i) seeks to package or combine discrete 
                        construction projects; or
                            ``(ii) the value of the goods or services 
                        subject to the contract exceeds the dollar 
                        threshold; or
                    ``(D) is determined by the Administrator to have a 
                solicitation that involves an unnecessary or 
                unjustified bundling of contract requirements.
            ``(2) Responsibility of the procurement activity.--At least 
        45 days prior to the issuance of a solicitation, the 
        Procurement Activity shall notify and provide a copy of the 
        proposed procurement to the procurement center representative 
        assigned to the Procurement Activity. The 45-day notification 
        process under this paragraph shall occur concurrently with 
        other processing steps required prior to issuance of the 
        solicitation. The notice shall include a statement setting 
        forth the proposed procurement strategy required by subsection 
        (e), and--
                    ``(A) explaining why the proposed acquisition 
                cannot be further divided into reasonably small lots or 
                discrete tasks in order to permit offers by small 
                business concerns;
                    ``(B) listing, if applicable, the incumbent 
                contractors disaggregated by and including names, 
                addresses, and whether or not the contractor is a small 
                business concern;
                    ``(C) describing the industries that might be 
                interested in bidding on the contract requirements;
                    ``(D) delineating the number of small business 
                concerns listed in the industry categories that could 
                be excluded from future bidding if the contract is a 
                bundled contract, including any small business bidders 
                that had bid on previous procurement requirements that 
                are included in the bundling of contract requirements;
                    ``(E) delineating the number of existing small 
                business concerns whose contracts will cease if the 
                contract bundling proceeds;
                    ``(F) explaining why the delivery schedules cannot 
                be established on a realistic basis that will encourage 
                small business participation to the extent consistent 
                with the actual requirements of the Government;
                    ``(G) explaining why the proposed acquisition 
                cannot be offered so as to make small business 
                participation likely;
                    ``(H) explaining why construction cannot be 
                procured as separate discrete projects; and
                    ``(I) explaining why the agency has determined that 
                the bundled contract is necessary and justified.
            ``(3) Publication of notice statement.--Concurrently, the 
        statement required in paragraph (2) shall be published in the 
        Federal contracting opportunities database.
            ``(4) Recompetition of a previously bundled contract.--If 
        the proposed procurement is a previously bundled contract, that 
        is to be recompeted as a bundled contract, the Administrator 
        shall determine, with the assistance of the agency proposing 
        the procurement--
                    ``(A) the amount of savings and benefits (in 
                accordance with subsection (d)) achieved under the 
                bundling of contract requirements;
                    ``(B) whether such savings and benefits will 
                continue to be realized if the contract remains 
                bundled, and whether such savings and benefits would be 
                greater if the procurement requirements were divided 
                into separate solicitations suitable for award to small 
                business concerns;
                    ``(C) the dollar value of subcontracts awarded to 
                small business concerns under the bundled contract, 
                disaggregated by North American Industrial 
                Classification System Code;
                    ``(D) the percentage of subcontract dollars awarded 
                to small businesses under the bundled contract, 
                disaggregated by North American Industrial 
                Classification System Code; and
                    ``(E) the dollar amount and percentage of prime 
                contract dollars awarded to small businesses in the 
                primary North American Industrial Classification System 
                Code for that bundled contract during each of the two 
                fiscal years preceding the award of the bundled 
                contract and during each fiscal year of the performance 
                of the bundled contract.
            ``(5) Failure to provide notice.--
                    ``(A) No notification received.--If no notification 
                of the proposed procurement or accompanying statement 
                is received, but the Administrator determines that the 
                proposed procurement is a proposed procurement 
                described in paragraph (1), then the Administrator 
                shall require that such a statement of work be 
                completed by the Procurement Activity and sent to the 
                procurement center representative and postpone the 
                solicitation process for at least 10 days but not more 
                than 45 days to allow the Administrator to review the 
                statement and make recommendations as described in this 
                section before the procurement process is continued.
                    ``(B) No work continued.--If the Administrator 
                requires a Procurement Activity to provide a statement 
                of work pursuant to subparagraph (A), the Procurement 
                Activity shall not be permitted to continue with the 
                procurement until such time as the Procurement Activity 
                complies with the requirements of subparagraph (A).
            ``(6) Responsibility of the procurement center 
        representative.--Within 15 days after receipt of the proposed 
        procurement and accompanying statement, if the procurement 
        center representative believes that the procurement as proposed 
        will render small business prime contract participation 
        unlikely, the representative shall recommend to the Procurement 
        Activity alternative procurement methods which would increase 
        small business prime contracting opportunities.
            ``(7) Disagreement between the administrator and the 
        procurement activity.--
                    ``(A) In general.--The Administrator may take 
                action under this paragraph to further the interests of 
                small businesses if--
                            ``(i) a small business concern would be 
                        adversely affected, directly or indirectly, by 
                        the proposed procurement, and that small 
                        business concern or a trade association 
                        representing such small business concern so 
                        requests; or
                            ``(ii) if the Administrator determines that 
                        a small business concern would be adversely 
                        affected, directly or indirectly, by the 
                        proposed procurement.
                    ``(B) Appeal to agency head.--First, the proposed 
                procurement shall be submitted for determination to the 
                head of the contracting agency by the Administrator.
                    ``(C) Failure to agree.--Whenever the Administrator 
                and the head of the contracting agency fail to agree--
                            ``(i) the Administrator, within ten days 
                        after such decision, may file an appeal with 
                        the appropriate agency board of contract 
                        appeals;
                            ``(ii) the board shall provide the 
                        Administrator and the head of the contracting 
                        agency the opportunity to provide their views 
                        on the disputed contract, except that no oral 
                        testimony or oral argument shall be permitted;
                            ``(iii) the board shall permit interested 
                        bidders to intervene; and
                            ``(iv) the board shall render its decision, 
                        which shall be final agency action for purposes 
                        of chapter 7 of title 5, United States Code, 
                        within 30 days after the appeal has been filed.
                    ``(D) Appeal by affected small business concern to 
                gao.--If the Administrator takes no action pursuant to 
                subparagraph (C), a small business concern that would 
                be adversely affected, directly or indirectly, by the 
                procurement as proposed, or a trade association that 
                includes such a small business concern as a member, may 
                file a protest with the Government Accountability 
                Office. If the protest is filed by a trade association, 
                the trade association shall not be required to identify 
                a specific member in connection with the protest.
    ``(d) Market Research.--
            ``(1) In general.--Before proceeding with an acquisition 
        strategy that could lead to bundled contracts, the head of an 
        agency shall conduct market research to determine whether 
        bundling of the requirements is necessary and justified.
            ``(2) Factors.--For purposes of subsection (c)(1), a 
        bundled contract is necessary and justified if the bundling of 
        contract requirements will result in substantial measurable 
        benefits in excess of those benefits resulting from a 
        procurement of the contract requirements that does not involve 
        contract bundling.
            ``(3) Benefits.--For the purposes of bundling of contract 
        requirements, benefits described in paragraph (2) may include 
        the following:
                    ``(A) Cost savings.
                    ``(B) Quality improvements.
                    ``(C) Reduction in acquisition cycle times.
                    ``(D) Better terms and conditions.
                    ``(E) Any other benefits.
            ``(4) Reduction of costs not determinative.--For purposes 
        of this subsection:
                    ``(A) Cost savings shall not include any reduction 
                in the use of military interdepartmental purchase 
                requests or any similar transfer funds among Federal 
                agencies for the use of a contract issued by another 
                Federal agency.
                    ``(B) The reduction of administrative or personnel 
                costs alone shall not be a justification for bundling 
                of contract requirements unless the cost savings are 
                expected to be substantial in relation to the dollar 
                value of the procurement requirements to be bundled.
            ``(5) Limitation on acquisition strategy.--The head of a 
        Federal agency may not carry out an acquisition strategy that 
        includes bundled contracts valued in excess of the dollar 
        threshold, unless the senior procurement executive or, if 
        applicable, Chief Acquisition Officer, for the Federal agency, 
        certifies to the head of the Federal agency that steps will be 
        taken to include small business concerns in the acquisition 
        strategy prior to the implementation of such acquisition 
        strategy.
    ``(e) Strategy Specifications.--If the head of a contracting agency 
determines that an acquisition plan or proposed procurement strategy 
will result in a bundled contract, the proposed acquisition plan or 
procurement strategy shall--
            ``(1) identify specifically the benefits anticipated to be 
        derived from the bundling of contract requirements;
            ``(2) set forth an assessment of the specific impediments 
        to participation by small business concerns as prime 
        contractors that result from the contract bundling and specify 
        actions designed to maximize small business participation as 
        subcontractors (including suppliers) at various tiers under the 
        contract or contracts that are awarded to meet the 
        requirements; and
            ``(3) include a specific determination that the anticipated 
        measurable benefits of the proposed bundled contract justify 
        its use.
    ``(f) Contract Teaming.--In the case of a solicitation of offers 
for a bundled contract that is issued by the head of an agency, a 
small-business concern may submit an offer that provides for use of a 
particular team of subcontractors for the performance of the contract. 
The head of the agency shall evaluate the offer in the same manner as 
other offers, with due consideration to the capabilities of all of the 
proposed subcontractors. If a small business concern teams under this 
paragraph, it shall not affect its status as a small business concern 
for any other purpose.
    ``(g) Database, Analysis, and Annual Report Regarding Contract 
Bundling.--
            ``(1) Database.--Not later than 180 days after the date of 
        the enactment of this subsection, the Administrator shall 
        develop and shall thereafter maintain a database containing 
        data and information regarding--
                    ``(A) each bundled contract awarded by a Federal 
                agency; and
                    ``(B) each small business concern that has been 
                displaced as a prime contractor as a result of the 
                award of such a contract.
            ``(2) Analysis.--For each bundled contract that is to be 
        recompeted, the Administrator shall determine--
                    ``(A) the amount of savings and benefits realized, 
                in comparison with the savings and benefits anticipated 
                by the analysis required under subsection (d) prior to 
                the contract award; and
                    ``(B) whether such savings and benefits will 
                continue to be realized if the contract remains 
                bundled, and whether such savings and benefits would be 
                greater if the procurement requirements were divided 
                into separate solicitations suitable for award to small 
                business concerns.
            ``(3) Annual report on contract bundling.--
                    ``(A) In general.--Not later than 1 year after the 
                date of the enactment of this paragraph, and annually 
                in March thereafter, the Administrator shall transmit a 
                report on contract bundling to the Committee on Small 
                Business of the House of Representatives and the 
                Committee on Small Business and Entrepreneurship of the 
                Senate.
                    ``(B) Contents.--Each report transmitted under 
                subparagraph (A) shall include--
                            ``(i) data on the number, arranged by 
                        industrial classification, of small business 
                        concerns displaced as prime contractors as a 
                        result of the award of bundled contracts by 
                        Federal agencies; and
                            ``(ii) a description of the activities with 
                        respect to previously bundled contracts of each 
                        Federal agency during the preceding year, 
                        including--
                                    ``(I) data on the number and total 
                                dollar amount of all contract 
                                requirements that were bundled; and
                                    ``(II) with respect to each bundled 
                                contract, data or information on--
                                            ``(aa) the justification 
                                        for the bundling of contract 
                                        requirements;
                                            ``(bb) the cost savings 
                                        realized by bundling the 
                                        contract requirements over the 
                                        life of the contract;
                                            ``(cc) the extent to which 
                                        maintaining the bundled status 
                                        of contract requirements is 
                                        projected to result in 
                                        continued cost savings;
                                            ``(dd) the extent to which 
                                        the bundling of contract 
                                        requirements complied with the 
                                        contracting agency's small 
                                        business subcontracting plan, 
                                        including the total dollar 
                                        value awarded to small business 
                                        concerns as subcontractors and 
                                        the total dollar value 
                                        previously awarded to small 
                                        business concerns as prime 
                                        contractors; and
                                            ``(ee) the impact of the 
                                        bundling of contract 
                                        requirements on small business 
                                        concerns unable to compete as 
                                        prime contractors for the 
                                        consolidated requirements and 
                                        on the industries of such small 
                                        business concerns, including a 
                                        description of any changes to 
                                        the proportion of any such 
                                        industry that is composed of 
                                        small business concerns.
    ``(h) Bundling Accountability Measures.--
            ``(1) Teaming requirements.--Each Federal agency shall 
        include in each solicitation for any multiple award contract 
        above the dollar threshold a provision soliciting bids from any 
        responsible source, including responsible small business 
        concerns and teams or joint ventures of small business 
        concerns.
            ``(2) Policies on reduction of contract bundling.--
                    ``(A) In general.--Not later than 270 days after 
                the date of enactment of this subparagraph, the Federal 
                Acquisition Regulatory Council, established under 
                section 25(a) of the Office of Federal Procurement 
                Policy Act (41 U.S.C. 1302(a)), shall amend the Federal 
                Acquisition Regulation issued under section 25 of such 
                Act to--
                            ``(i) establish a Government-wide policy 
                        regarding contract bundling;
                            ``(ii) establish a Government-wide policy 
                        on the solicitation of contractor teams and 
                        joint ventures; and
                            ``(iii) require that the policies 
                        established under clauses (i) and (ii) be 
                        published on the website of each Federal 
                        agency.
                    ``(B) Rationale for contract bundling.--Not later 
                than 30 days after the date on which the head of a 
                Federal agency submits the report required under 
                section 15(h), the head of the Federal agency shall 
                publish on the website of the Federal agency a list and 
                rationale for any bundled contract for which the 
                Federal agency solicited bids or that was awarded by 
                the Federal agency.''.

SEC. 3. REPEAL OF REDUNDANT PROVISIONS.

    (a) Certain Provisions Regarding Contract Bundling Repealed.--
            (1) Section 15(a) of the Small Business Act (15 U.S.C. 
        644(a)), is amended by striking ``If a proposed procurement 
        includes'' and all that follows through ``the matter shall be 
        submitted for determination to the Secretary or the head of the 
        appropriate department or agency by the Administrator.''.
            (2) All references in law to such sentences as they were in 
        effect on the date that is one day prior to the effective date 
        of this Act shall be deemed to be references to section 44(d), 
        as added by this Act.
    (b) Certain Provisions Regarding Market Research Repealed.--
            (1) Paragraphs (2) through (4) of section 15(e) of the 
        Small Business Act (15 U.S.C. 644(e)) are repealed.
            (2) All references in law to such paragraphs, as in effect 
        on the date that is one day prior to the effective date of this 
        Act, shall be deemed to be references to subsections (d) 
        through (f), respectively, of section 44 of the Small Business 
        Act, as added by this section.
    (c) Certain Provisions Regarding Contract Bundling Database 
Repealed.--
            (1) Paragraph (1) of section 15(p) of the Small Business 
        Act (15 U.S.C. 644(p)) is repealed.
            (2) Paragraphs (2) through (4) of section 15(p) of the 
        Small Business Act (15 U.S.C 644(p)) are repealed. All 
        references in law to such paragraphs, as in effect on the date 
        that is one day prior to the effective date of this Act, shall 
        be deemed to be references to paragraphs (1) through (3), 
        respectively, of section 44(h) of the Small Business Act, as 
        added by this Act.
    (d) Certain Provisions Regarding Bundling Accountability Measures 
Repealed.--
            (1) Paragraphs (1) and (2) of section 15(q) of the Small 
        Business Act (15 U.S.C 644(q)) are repealed.
            (2) All references in law to such paragraphs, as in effect 
        on the date that is one day prior to the effective date of this 
        Act, shall be deemed to be references to paragraphs (1) and 
        (2), respectively, of section 44(i) of the Small Business Act, 
        as added by this Act.
    (e) Certain Provisions Regarding.--Subsection (o) of section 3 of 
the Small Business Act (15 U.S.C.) is repealed.

SEC. 4. TECHNICAL AMENDMENTS.

    Section 15 of the Small Business Act (15 U.S.C. 644) is amended--
            (1) in the heading of subsection (p), to read as follows: 
        ``Access to Data.--''; and
            (2) in the heading of subsection (q), to read as follows: 
        ``Reports Related to Procurement Center Representatives.--''.
                                                 Union Calendar No. 528

112th CONGRESS

  2d Session

                               H. R. 4081

                          [Report No. 112-725]

_______________________________________________________________________

                                 A BILL

 To amend the Small Business Act to consolidate and revise provisions 
         relating to contract bundling, and for other purposes.

_______________________________________________________________________

                           December 21, 2012

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed