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:

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.