[House Report 112-725]
[From the U.S. Government Publishing Office]


112th Congress }                                             {   Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                             {  112-725

======================================================================



 
             CONTRACTOR OPPORTUNITY PROTECTION ACT OF 2012

                                _______
                                

 December 21, 2012.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Graves of Missouri, from the Committee on Small Business, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 4081]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 4081) to amend the Small Business Act to consolidate 
and revise provisions relating to contract bundling, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
   I. Amendment.......................................................1
  II. Purpose of the Bill and Summary.................................7
 III. Need for Legislation............................................7
  IV. Hearings........................................................9
   V. Committee Consideration.........................................9
  VI. Section-by-Section Analysis of H.R. 4081.......................18
 VII. Unfunded Mandates..............................................21
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditur21
  IX. Oversight Findings.............................................21
   X. Statement of Constitutional Authority..........................22
  XI. Congressional Accountability Act...............................22
 XII. Federal Advisory Committee Act Statement.......................22
XIII. Statement of No Earmarks.......................................22
 XIV. Performance Goals and Objectives...............................22
  XV. Changes in Existing Law Made by the Bill, as Reported..........22

                              I. Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

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.--''.

                      II. Purpose and Bill Summary

    The purpose of H.R. 4081, the ``Contractor Opportunity 
Protection Act of 2012,'' is to amend the Small Business Act 
(the Act)\1\ to collect all provisions concerning contract 
bundling currently in the Act and transfer them to a revised 
Section 44. In addition to making this significant clarifying 
change, the bill strengthens the requirements that agencies 
must demonstrate before they are entitled to bundle or 
consolidate contracts that would have, absent such bundling or 
consolidation, been able to be performed by small businesses.
---------------------------------------------------------------------------
    \1\Originally, title II of the Act of July 30, 1953, c. 282, 67 
Stat. 232, was designated as the Small Business Act of 1953. A plethora 
of amendments in subsequent Congresses led to a rewrite in 1958. Pub. 
L. No. 85-536, Sec. 1, 72m Stat, 384 (1958). The Act is codified at 15 
U.S.C. Sec. Sec. 631-657q.
---------------------------------------------------------------------------

                       III. Need for Legislation

    The Committee has a long history of oversight with respect 
to contract bundling. Throughout several Congresses, the 
Committee has held a number of hearings on contract bundling, 
submitted letters objecting to various procurement strategies 
that bundle contracts, and met with procurements official to 
express concerns at contracting strategies which led to bundled 
contracts.
    Section 3(o)(2) of the Act defines the bundling of contract 
requirements as:

          consolidating 2 or more procurement requirements for 
        goods or services previously provided or performed 
        under separate smaller contracts into a solicitation of 
        offers for a single contract that is likely to be 
        unsuitable for award to a small-business concern due 
        to--
          (A) the diversity, size, or specialized nature of the 
        elements of the performance specified;
          (B) the aggregate dollar value of the anticipated 
        award;
          (C) the geographical dispersion of the contract 
        performance sites; or
          (D) any combination of the factors described in 
        subparagraphs (A), (B), and (C).

15 U.S.C. Sec. 632(o)(2).
    However, since the Act proceeds to define ``separate 
smaller contract'' as ``a contract that has been performed by 
one or more small business concerns or was suitable for award 
to one or more small business concerns,'' some agencies have 
interpreted it as not applying to new construction, since new 
construction, by definition, has not previously been performed 
by small businesses.\2\
---------------------------------------------------------------------------
    \2\Id. at Sec.  632(o)(3).
---------------------------------------------------------------------------
    The Act requires each federal department and agency to: (1) 
structure contracting requirements to facilitate competition by 
and among small business concerns, taking all reasonable steps 
to eliminate obstacles to their participation; and (2) avoid 
unnecessary and unjustified bundling of contract requirements 
that may preclude small business participation in procurements 
as prime contractors. However, agencies do not apply these 
requirements consistently to new construction work. Likewise, 
the Federal Acquisition Regulation (FAR) provisions intended to 
protect small businesses from unjustified bundling may not be 
included when the contracting officer (CO) is evaluating the 
requirement.\3\ In some cases, the Act recognizes that contract 
bundling may be more efficient, save money or be necessary in 
order to support specific technical, quality, or design 
requirements and must be permitted.\4\ Even the President 
acknowledges that bundled procurements limit competition and do 
not allow small businesses to compete for government business, 
so their effect must be mitigated.\5\ Balancing the benefits of 
bundling against its disadvantages may be complex, but it needs 
to be addressed to ensure small businesses have a fair 
opportunity to compete.
---------------------------------------------------------------------------
    \3\These include: (1) conducting market research to determine 
whether bundling is needed and justified; (2) justifying the 
determinations in acquisition strategy documentation that identifies 
measurably substantial benefits that meet the statutory and regulatory 
requirements; and (3) conferring with SBA representatives on their 
acquisition strategies. 48 C.F.R. Sec. Sec.  7.103-105, 8.404, 
15.304(c), 16.505(a), and 19.4.
    \4\15 U.S.C. Sec.  644(a).
    \5\National Economic Council, The Small Business Agenda: Growing 
America's Small Businesses to Win the Future 19 (2011) available at 
http://www.sba.gov/sites/default/files/
Small%20Business%20Agenda%20NEC.pdf.
---------------------------------------------------------------------------
    As currently drafted, the Act uses both the terms 
``contract consolidation'' and ``contract bundling'', as well 
as placing items relevant to these processes scattered 
throughout the Act. This makes understanding this complex topic 
more difficult as locating relevant portions is extremely 
challenging for both small businesses and contracting officers. 
In addition, the use of the words consolidation and bundling 
adds an unnecessary degree of obfuscation that simply is 
unnecessary.
    Given that, this legislation consolidates and revises the 
Act to place items related to bundling and consolidation in one 
section of the Act. It also removes the term ``consolidation'' 
to ensure that there is not confusion between the two terms. 
Additionally, due to the negative effects bundling can have on 
small firms, this legislation aims to provide a stronger 
process to appeal unjustified bundling through clarification of 
the statutory limits on bundling, the creation of a third party 
arbiter, and by increasing transparency in the contracting 
process.

                              IV. Hearings

    Issues related to contract bundling were addressed at 
multiple hearings held to consider federal government 
contracting at both the full and subcommittee levels. One 
hearing, conducted by the Subcommittee on Contracting and 
Workforce entitled ``Construction Contracting: Barriers to 
Small Business Participation'' on February 9, 2012, focused 
specifically on contract bundling and consolidation in federal 
procurement for construction services.

                       V. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on March 22, 2012, and ordered H.R. 4081 
reported, as amended, to the House by a voice vote at 10:32 
a.m. During the markup, one amendment was offered as a complete 
substitute and adopted in lieu of H.R. 4081. Disposition of the 
amendment is addressed below.
    Amendment Number One filed by Mr. Graves (R-MO) offered an 
amendment in the form of a substitute. Amendment Number One was 
adopted by a voice vote at 10:32 a.m.

                         Amendment to H.R. 4081


                   Offered by Mr. Graves of Missouri


  Strike all that follows after the enacting clause and insert 
the following:

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 appropriate 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.--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.''. All 
references in law to such sentences as they were in effect on 
the date that is 1 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.--
Paragraphs (2) through (4) of section 15(e) of the Small 
Business Act (15 U.S.C. 644(e)) 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 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.--Paragraphs (1) and (2) of section 15(q) of 
the Small Business Act (15 U.S.C 644(q)) 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) 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 subsection heading of subsection (p), to 
        read as follows: ``Access to Data.''; and
          (2) in the subsection heading of subsection (p), to 
        read as follows: ``Reports Related to Procurement 
        Center Representatives.''.

SEC. 5. EXPANSION OF AGENCY'S RESPONSIBILITY.

  Section 44(b) of the Small Business Act (15 U.S.C. 657q(b)) 
is amended by striking ``appropriate'' and inserting ``the 
maximum practicable''.

              VI. Section-by-Section Analysis of H.R. 4081


          SECTION-BY-SECTION ANALYSIS OF H.R. 4081 AS AMENDED

Section 1--Short title

    This section provides that the bill may be cited as the 
``Contractor Opportunity Protection Act of 2012.''

Section 2--Consolidation of provisions relating to contract bundling

            Subsection (a)--Definitions
    This subsection amends section 44 of the Act to consolidate 
and revise definitions related to contract consolidation and 
contract bundling into one section of the Act. Specifically, 
the bill removes all definitions related to consolidation and 
replaces them with revised definitions of contract bundling to 
promote accurate understanding of what contracts should and 
should not be included.
    Paragraph (1) defines ``bundled contract.'' The revised 
definitions exclude contracts related below specified dollar 
thresholds and contracts for major defense acquisition 
programs. Contracts resulting from studies conducted pursuant 
to Office of Management and Budget Circular A-76 are included.
    Paragraph (2) defines ``bundling methodology'' or the 
process by which bundling occurs. This clarifies that bundling 
may occur on: (1) single award contracts and multiple award 
contracts; (2) contracts and task orders; and (3) when a new 
requirement is included in a solicitation. Previously, bundling 
was only considered to occur on previously awarded requirements 
contracts and only at the contract level, so this definitional 
change will more accurately capture the process.
    Paragraph (3) defines ``bundling of contract requirements'' 
as a procurement that uses a bundling methodology if the 
resultant procurement is unsuitable for award to small 
businesses. It may be unsuitable due to the value of the 
contract, the number of discrete requirements being combined, 
the complexity of discrete requirements, the geographic 
dispersal of the requirements, or any combination thereof.
    Paragraph (4) defines ``Chief Acquisition Officer'' by 
assigning it the definition at 41 U.S.C. Sec. 1702(a). Chief 
Acquisition Officers (CAOs) are responsible for the acquisition 
programs of their respective agencies.
    Paragraph (5) defines the term ``contract.'' This clarifies 
that for purposes of contracting bundling, a task order issued 
on an indefinite delivery, indefinite quantity contract shall 
itself be considered a contract.
    Paragraph (6) defines ``contract bundling.'' Contract 
bundling is the process by which a bundled contract is created.
    Paragraph (7) defines the term ``dollar threshold'' used in 
paragraph (1). The dollar thresholds specified are $5 million 
for construction contracts or $2 million for other contracts.
    Paragraph (8) defines ``major defense acquisition 
program,'' which is used in paragraph (1). The definition is 
taken from 10 U.S.C. Sec. 2430(a).
    Paragraph (9) defines a ``previously bundled contract.'' A 
previously bundled contract may be the successor to a contract 
that required bundling analysis, or for which any of the 
successor contracts were designated as a consolidated contract 
or bundled contract in the Federal Procurement Data System. 
This definition will ensure that as the understanding of 
bundling evolves, prior data is not lost.
    Paragraph (10) defines ``procurement activity.'' A 
procurement activity is an agency or subdivision thereof that 
is acquiring goods or services.
    Paragraph (11) defines ``procurement requirement.'' 
Procurement requirements are what are being bundled. Therefore, 
H.R. 4081 defines procurement requirements as a determination 
by an agency that it needs a good or service. It is expected 
that this determination will lead to the eventual purchase of 
the good or service.
    Paragraph (12) defines ``Senior Procurement Executive,'' by 
assigning it the definition at 41 U.S.C. Sec. 1702(c). At 
agencies without CAOs, Senior Procurement Executives (SPEs) are 
responsible for the acquisition programs of the agency. At 
agencies with CAOs, the CAO is either the SPE or supervises the 
SPE.
            Subsection (b)--I
    This subsection amends section 44 of the Act to require 
that the head of each Federal agency ensure that decisions made 
by the Federal agency requiring contract bundling are made with 
a view to providing small business concerns with appropriate 
opportunities. This furthers the goal of the Act to provide 
small business concerns with the maximum practicable 
opportunity to participate in federal contracting.
            Subsection (c)--Contract bundling
    Subsection (c) of the bill amends section 44 of the Act by: 
(1) clarifying when the process needed to bundle contracts 
apply; (2) modifies the procedures used to consider bundled 
contracts; and (3) establishes more robust dispute resolution 
mechanisms concerning bundled contracts. Specifically, this 
subsection provides that at least 45 days prior to issuing a 
solicitation, a procurement center representative (PCR) be 
notified and provided a copy of the proposed procurement. 
Previously, the PCR only received 30 days notice. Additionally, 
this subsection delineates what content must be provided in a 
statement accompanying the notice and that the notice statement 
be published in the Federal contracting opportunities database. 
This public notice requirement is new, and will allow more 
small businesses the chance to be heard on the affects of 
proposed bundling. This subsection retains the requirement 
that, within 15 days of receiving the proposed procurement 
notice, a PCR believing that small businesses will not be able 
to compete as prime contractors shall recommend alternative 
procurement methods to increase small business prime 
contracting opportunities. Further, this section outlines the 
steps which must be completed in order to recompete a 
previously bundled contract. The SBA Administrator retains the 
ability to challenge a bundled contract if the Administrator 
believes a small firm would be adversely affected and appeal to 
the head of the agency, but a new process is added: if the 
Administrator and head of the agency disagree as to the effect 
a bundled contract would have on small firms, the Administrator 
may now appeal within 10 days to the appropriate Agency's board 
of contract appeals and receive a decision within 30 days of 
filing the appeal. Finally, this subsection allows small 
business concerns, or a trade association that include such a 
small business concern as a member, to file a protest with the 
Government Accountability Office (GAO) if the SBA Administrator 
fails to take action regarding a bundled contract. While small 
businesses have the ability to file GAO protests under the 
current law, they are rarely considered interested parties. 
This will make their appeal rights more fruitful, and allow GAO 
and the Boards of Contract Appeals to begin developing 
substantive case law regarding justified contract bundling.
            Subsection (d)--Market research
    This subsection requires that prior to proceeding to an 
acquisition strategy that could lead to a bundled contract the 
head of an agency shall conduct market research to determine 
whether such bundling is necessary and justified. The 
provisions of the subsection, for the most part, restate 
existing statutory requirements. However, subsection (d) adds a 
new limitation on acquisition strategy that prohibits bundled 
contracts in excess of the dollar thresholds unless a senior 
procurement executive or the federal agency's CAO certifies to 
the head of the federal agency that steps will be taken to 
include small business concerns.
            Subsection (e)--Strategy specifications
    This subsection continues to allow the head of the 
contracting agency to identify specifically the benefits 
anticipated from the bundled contract and set forth an 
assessment of the specific impediments to participation by 
small business concerns as prime contractors and include a 
specific determination of measurable benefits that could 
justify the proposed bundled contract. This recodification is 
not intended to modify existing practices.
            Subsection (f)--Contract teaming
    This subsection continues to allow small businesses to 
submit an offer that uses a particular team of subcontractors 
for the performance of the contract. This recodification is not 
intended to modify existing practices.
            Subsection (g)--Database, analysis, and annual report 
                    regarding contract bundling
    This subsection continues to require the use of database to 
record information regarding bundled contracts. For analysis, 
this subsection adds requirements that the amount of savings 
and benefits realized be compared with the savings and benefits 
anticipated by the analysis required prior to the contract 
award. Additionally, this subsection would now report the 
annual report on contract bundling to be submitted to the House 
Small Business Committee and Senate Small Business and 
Entrepreneurship Committees.
            Subsection (h)--Bundling accountability measures
    This subsection continues to allow teaming or joint 
ventures by small business concerns for multiple award 
contracts above the dollar threshold. Additionally, this 
subsection continues to enforce policies promoting the 
reduction of contract bundling. This recodification is not 
intended to modify existing practices or accountability 
measures.

Section 3--Repeal of redundant provisions

    This section repeals provisions related to contract 
bundling throughout the Small Business Act which, in light of 
changes made in this bill, would be redundant or duplicative.

Section 4--Technical amendments

    This section amends section 15 of the Small Business Act to 
make technical corrections.

Section 5--Expansion of agency's responsibility

    This section amends section 44(b) of the Small Business Act 
to strike ``appropriate'' and insert ``to the maximum 
practicable.'' This will make section 44 consistent with the 
rest of the Act. More importantly, it does not allow agencies 
to usurp Congress's role by determining that an amount less 
than the maximum practicable utilization of small businesses is 
appropriate.

                         VII. Unfunded Mandates

    H.R. 4081 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act, Pub. 
L. No. 104-4, and would impose no costs on state, local or 
tribal governments.

 VIII. New Budget Authority, Entitlement Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House, the Committee provides the following opinion and 
estimate with respect to new budget authority, entitlement 
authority and tax expenditures.
    The Committee has not received an estimate of new budget 
authority contained in the cost estimate prepared by the 
Director of the Congressional Budget Office pursuant to 
Sec. 402 of the Congressional Budget Act of 1974. The Committee 
recognizes that the clarification of bundling in the Small 
Business Act will require additional work be performed by 
contracting officers. However, there is no way to estimate what 
those costs might be because agencies have generally failed to 
comply with extant requirements to analyze bundles. Had 
agencies been complying with the Act, it is likely that the 
cost incurred to comply with this legislation would be minimal.

                         IX. Oversight Findings

    In accordance with clause 2(b)(1) of rule X of the Rules of 
the House, the oversight findings and recommendations of the 
Committee on Small Business with respect to the subject matter 
contained in H.R. 4081 are incorporated into the descriptive 
portions of this report.

                X. Statement of Constitutional Authority

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Art. I, Sec. 8, cls. 1, 3, and 18 and Art. 
IV, Sec. 3, cl. 2 of the Constitution of the United States.

                  XI. Congressional Accountability Act

    H.R. 4081 does not relate to the terms and conditions of 
employment or access to public services or accommodations 
within the meaning of Sec. 102(b)(3) of Pub. L. No. 104-1.

             XII. Federal Advisory Committee Act Statement

    H.R. 4081 does not establish or authorize the establishment 
of any new advisory committees as that term is defined in the 
Federal Advisory Committee Act, 5 U.S.C. App. 2.

                     XIII. Statement of No Earmarks

    Pursuant to clause 9 of rule XXI, H.R. 4081 does not 
contain any congressional earmarks, limited tax benefits or 
limited tariff benefits as defined in subsections (d), (e) or 
(f) of clause 9 of rule XXI of the Rules of the House.

                 XIV. Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House, the Committee establishes the following performance-
related goals and objectives for this legislation:

          H.R. 4081 includes provisions to amend the Small 
        Business Act to consolidate and revise provisions 
        related to contract bundling to enhance transparency in 
        contract bundling and increase federal procurement 
        opportunities for small business concerns.

       XV. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                           SMALL BUSINESS ACT




           *       *       *       *       *       *       *
  Sec. 3. (a) * * *

           *       *       *       *       *       *       *

  [(o) Definitions of Bundling of Contract Requirements and 
Related Terms.--In this Act:
          [(1) Bundled contract.--The term ``bundled contract'' 
        means a contract that is entered into to meet 
        requirements that are consolidated in a bundling of 
        contract requirements.
          [(2) Bundling of contract requirements.--The term 
        ``bundling of contract requirements'' means 
        consolidating 2 or more procurement requirements for 
        goods or services previously provided or performed 
        under separate smaller contracts into a solicitation of 
        offers for a single contract that is likely to be 
        unsuitable for award to a small-business concern due 
        to--
                  [(A) the diversity, size, or specialized 
                nature of the elements of the performance 
                specified;
                  [(B) the aggregate dollar value of the 
                anticipated award;
                  [(C) the geographical dispersion of the 
                contract performance sites; or
                  [(D) any combination of the factors described 
                in subparagraphs (A), (B), and (C).
          [(3) Separate smaller contract.--The term ``separate 
        smaller contract'', with respect to a bundling of 
        contract requirements, means a contract that has been 
        performed by 1 or more small business concerns or was 
        suitable for award to 1 or more small business 
        concerns.]

           *       *       *       *       *       *       *

  Sec. 15. (a) To effectuate the purposes of this Act, small-
business concerns within the meaning of this Act shall receive 
any award or contract or any part thereof, and be awarded any 
contract for the sale of Government property, as to which it is 
determined by the Administration and the contracting 
procurement or disposal agency (1) to be in the interest of 
maintaining or mobilizing the Nation's full productive 
capacity, (2) to be in the interest of war or national defense 
programs, (3) to be in the interest of assuring that a fair 
proportion of the total purchases and contracts for property 
and services for the Government in each industry category are 
placed with small-business concerns, or (4) to be in the 
interest of assuring that a fair proportion of the total sales 
of Government property be made to small-business concerns; but 
nothing contained in this Act shall be construed to change any 
preferences or priorities established by law with respect to 
the sale of electrical power or other property by the 
Government or any agency thereof. These determinations may be 
made for individual awards or contracts or for classes of 
awards or contracts. [If a proposed procurement includes in its 
statement of work goods or services currently being performed 
by a small business, and if the proposed procurement is in a 
quantity or estimated dollar value the magnitude of which 
renders small business prime contract participation unlikely, 
or if a proposed procurement for construction seeks to package 
or consolidate discrete construction projects, or the 
solicitation involves an unnecessary or unjustified bundling of 
contract requirements, as determined by the Administration, the 
Procurement Activity shall provide a copy of the proposed 
procurement to the Procurement Activity's Small Business 
Procurement Center Representative at least 30 days prior to the 
solicitation's issuance along with a statement explaining (1) 
why the proposed acquisition cannot be divided into reasonably 
small lots (not less than economic production runs) to permit 
offers on quantities less than the total requirement, (2) why 
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, (3) 
why the proposed acquisition cannot be offered so as to make 
small business participation likely, (4) why construction 
cannot be procured as separate discrete projects, or (5) why 
the agency has determined that the bundled contract (as defined 
in section 3(o)) is necessary and justified. The thirty-day 
notification process shall occur concurrently with other 
processing steps required prior to issuance of the 
solicitation. 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. Whenever the 
Administration and the contracting procurement agency fail to 
agree, the matter shall be submitted for determination to the 
Secretary or the head of the appropriate department or agency 
by the Administrator.] For purposes of clause (3) of the first 
sentence of this subsection, an industry category is a discrete 
group of similar goods and services. Such groups shall be 
determined by the Administration in accordance with the 
definition of a ``United States industry'' under the North 
American Industry Classification System, as established by the 
Office of Management and Budget, except that the Administration 
shall limit such an industry category to a greater extent than 
provided under such classification codes if the Administration 
receives evidence indicating that further segmentation for 
purposes of this paragraph is warranted due to special capital 
equipment needs or special labor or geographic requirements or 
to recognize a new industry. A market for goods or services may 
not be segmented under the preceding sentence due to geographic 
requirements unless the Government typically designates the 
area where work for contracts for such goods or services is to 
be performed and Government purchases comprise the major 
portion of the entire domestic market for such goods or 
services and, due to the fixed location of facilities, high 
mobilization costs, or similar economic factors, it is 
unreasonable to expect competition from business concerns 
located outside of the general areas where such concerns are 
located. A contract may not be awarded under this subsection if 
the award of the contract would result in a cost to the 
awarding agency which exceeds a fair market price.

           *       *       *       *       *       *       *

  (e) Procurement Strategies; Contract Bundling.--
          (1) * * *
          [(2) Market research.--
                  [(A) In general.--Before proceeding with an 
                acquisition strategy that could lead to a 
                contract containing consolidated procurement 
                requirements, the head of an agency shall 
                conduct market research to determine whether 
                consolidation of the requirements is necessary 
                and justified.
                  [(B) Factors.--For purposes of subparagraph 
                (A), consolidation of the requirements may be 
                determined as being necessary and justified if, 
                as compared to the benefits that would be 
                derived from contracting to meet those 
                requirements if not consolidated, the Federal 
                Government would derive from the consolidation 
                measurably substantial benefits, including any 
                combination of benefits that, in combination, 
                are measurably substantial. Benefits described 
                in the preceding sentence may include the 
                following:
                          [(i) Cost savings.
                          [(ii) Quality improvements.
                          [(iii) Reduction in acquisition cycle 
                        times.
                          [(iv) Better terms and conditions.
                          [(v) Any other benefits.
                  [(C) Reduction of costs not determinative.--
                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 consolidated.
          [(3) Strategy specifications.--If the head of a 
        contracting agency determines that a proposed 
        procurement strategy for a procurement involves a 
        substantial bundling of contract requirements, the 
        proposed procurement strategy shall--
                  [(A) identify specifically the benefits 
                anticipated to be derived from the bundling of 
                contract requirements;
                  [(B) set forth an assessment of the specific 
                impediments to participation by small business 
                concerns as prime contractors that result from 
                the bundling of contract requirements 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
                  [(C) include a specific determination that 
                the anticipated benefits of the proposed 
                bundled contract justify its use.
          [(4) 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.]

           *       *       *       *       *       *       *

  (p) [Database, Analysis, and Annual Report With Respect to 
Bundled Contracts] Access to Data.--
          [(1) Bundled contract defined.--In this subsection, 
        the term ``bundled contract'' has the meaning given 
        such term in section 3(o)(1).
          [(2) Database.--
                  [(A) In general.--Not later than 180 days 
                after the date of the enactment of this 
                subsection, the Administrator of the Small 
                Business Administration shall develop and shall 
                thereafter maintain a database containing data 
                and information regarding--
                          [(i) each bundled contract awarded by 
                        a Federal agency; and
                          [(ii) each small business concern 
                        that has been displaced as a prime 
                        contractor as a result of the award of 
                        such a contract.
          [(3) Analysis.--For each bundled contract that is to 
        be recompeted as a bundled contract, the Administrator 
        shall determine--
                  [(A) the amount of savings and benefits (in 
                accordance with subsection (e)) achieved under 
                the bundling of contract requirements; 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.
          [(4) 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 
                Administration shall transmit a report on 
                contract bundling to the Committees on Small 
                Business of the House of Representatives and 
                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.]

           *       *       *       *       *       *       *

  (q) [Bundling Accountability Measures] Reports Related to 
Procurement Center Representatives.--
          [(1) Teaming requirements.--Each Federal agency shall 
        include in each solicitation for any multiple award 
        contract above the substantial bundling threshold of 
        the Federal agency 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 1 year after 
                the date of enactment of this subsection, the 
                Federal Acquisition Regulatory Council 
                established under section 25(a) of the Office 
                of Federal Procurement Policy Act (41 U.S.C. 
                4219(a)) shall amend the Federal Acquisition 
                Regulation issued under section 25 of such Act 
                to--
                          [(i) establish a Government-wide 
                        policy regarding contract bundling, 
                        including regarding the solicitation of 
                        teaming and joint ventures under 
                        paragraph (1); and
                          [(ii) require that the policy 
                        established under clause (i) 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 data 
                certifications to the Administrator for Federal 
                Procurement Policy, 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. 44. CONSOLIDATION OF CONTRACT REQUIREMENTS.

  [(a) Definitions.--In this section--
          [(1) 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. 414(a));
          [(2) the term ``consolidation of contract 
        requirements'', with respect to contract requirements 
        of a Federal agency, means a use of a solicitation to 
        obtain offers for a single contract or a multiple award 
        contract to satisfy 2 or more requirements of the 
        Federal agency for goods or services that have been 
        provided to or performed for the Federal agency under 2 
        or more separate contracts lower in cost than the total 
        cost of the contract for which the offers are 
        solicited; and
          [(3) 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. 
        414(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 
consolidation of contract requirements of the Federal agency 
are made with a view to providing small business concerns with 
appropriate opportunities to participate as prime contractors 
and subcontractors in the procurements of the Federal agency.
  [(c) Limitation on Use of Acquisition Strategies Involving 
Consolidation.--
          [(1) In general.--Subject to paragraph (4), the head 
        of a Federal agency may not carry out an acquisition 
        strategy that includes a consolidation of contract 
        requirements of the Federal agency with a total value 
        of more than $2,000,000, unless the senior procurement 
        executive or Chief Acquisition Officer for the Federal 
        agency, before carrying out the acquisition strategy--
                  [(A) conducts market research;
                  [(B) identifies any alternative contracting 
                approaches that would involve a lesser degree 
                of consolidation of contract requirements;
                  [(C) makes a written determination that the 
                consolidation of contract requirements is 
                necessary and justified;
                  [(D) identifies any negative impact by the 
                acquisition strategy on contracting with small 
                business concerns; and
                  [(E) certifies to the head of the Federal 
                agency that steps will be taken to include 
                small business concerns in the acquisition 
                strategy.
          [(2) Determination that consolidation is necessary 
        and justified.--
                  [(A) In general.--A senior procurement 
                executive or Chief Acquisition Officer may 
                determine that an acquisition strategy 
                involving a consolidation of contract 
                requirements is necessary and justified for the 
                purposes of paragraph (1)(C) if the benefits of 
                the acquisition strategy substantially exceed 
                the benefits of each of the possible 
                alternative contracting approaches identified 
                under paragraph (1)(B).
                  [(B) Savings in administrative or personnel 
                costs.--For purposes of subparagraph (A), 
                savings in administrative or personnel costs 
                alone do not constitute a sufficient 
                justification for a consolidation of contract 
                requirements in a procurement unless the 
                expected total amount of the cost savings, as 
                determined by the senior procurement executive 
                or Chief Acquisition Officer, is expected to be 
                substantial in relation to the total cost of 
                the procurement.
          [(3) Benefits to be considered.--The benefits 
        considered for the purposes of paragraphs (1) and (2) 
        may include cost and, regardless of whether 
        quantifiable in dollar amounts--
                  [(A) quality;
                  [(B) acquisition cycle;
                  [(C) terms and conditions; and
                  [(D) any other benefit.
          [(4) Department of defense.--
                  [(A) In general.--The Department of Defense 
                and each military department shall comply with 
                this section until after the date described in 
                subparagraph (C).
                  [(B) Rule.--After the date described in 
                subparagraph (C), contracting by the Department 
                of Defense or a military department shall be 
                conducted in accordance with section 2382 of 
                title 10, United States Code.
                  [(C) Date.--The date described in this 
                subparagraph is the date on which the 
                Administrator determines the Department of 
                Defense or a military department is in 
                compliance with the Government-wide contracting 
                goals under section 15.]

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.

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