[Congressional Record Volume 148, Number 56 (Tuesday, May 7, 2002)]
[Senate]
[Page S3956]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS:
  S. 2463. A bill to amend title 10, United States Code, to restrict 
bundling of Department of Defense contract requirements that 
unreasonably disadvantages small businesses, and for other purposes; to 
the Committee on Armed Services.
  Ms. COLLINS. Madam President, I am pleased to be introducing the 
Small Business Contracts Opportunity Act of 2002. This legislation 
would help expand opportunities for small businesses to bid on 
government contracts, thus allowing them to sell more products and 
services to Federal agencies. The bill would prohibit the consolidation 
of contract requirements in excess of $5 million absent a written 
determination that the benefits of consolidation substantially exceed 
the benefits of alternative contracting approaches that would involve a 
lesser degree of consolidation.
  The Small Business Reauthorization Act of 1997, P.L. 105-135, 
requires Federal agencies to conduct market research to assess the 
potential impact of ``bundled contracts,'' and to proceed with such 
contracts only if the benefits of bundling substantially exceed the 
benefits of proceeding with separate contracts. Unfortunately, the 
reality is that the Department of Defense, and other Federal agencies, 
have narrowly interpreted these provisions of the Small Business 
Reauthorization Act. The result is that too many Federal contracts are 
so large that they are out of reach for small businesses. Yet, small 
businesses could perform the work if the contract requirements were 
divided into separate contracts rather than consolidated.
  For the past several years, the evidence that contract bundling is 
hurting small businesses has been growing. For example, on November 16, 
``Eagle Eye'' publishing released its second study on bundling since 
1997, which found that the Defense Department is the biggest culprit of 
bundling, accounting for 82 percent of all bundled dollars. The study 
report goes on to say, that large businesses are the main beneficiaries 
of bundling, and highlights that large firms win 74 percent of all 
bundled dollars and 67 percent of all prime contract dollars. With the 
average bundling contract worth $8 million, it is no wonder small 
businesses receive only 9 percent of all bundled contract dollars. 
Eagle Eye found that the average bundled contract was 11 times larger 
than the average unbundled contract.
  Also, according to the Eagle Eye study, major DoD bureaus remain the 
largest proponents of bundling. Army's 1999 bundled total was up to 22 
percent since 1992 to $15.8 billion, while Navy increased only by 2 
percent, but still managed to bundle $22 billion worth of contracts. 
Air Force bundled $18.8 billion, but offered some good news because its 
total is down 24 percent since 1992.
  The legislation that I am proposing would require the Department of 
Defense to prove the cost benefit of consolidating a contract in excess 
of $5 million. Now is the time to enact this modest provision to ensure 
that our small businesses have the opportunities that they deserve to 
provide goods and services for the Department of Defense.
  I urge all Members of the Senate to join me in support of the 
Contract Consolidation Act of 2002.
                                 ______