[Federal Register Volume 67, Number 87 (Monday, May 6, 2002)]
[Notices]
[Pages 30403-30404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11139]


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OFFICE OF MANAGEMENT AND BUDGET


Competition in Contracting; Contract Bundling

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice of public meeting and request for comments.

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SUMMARY: The Office of Management and Budget (OMB) is reviewing federal 
agencies' use of competition in their contracting activities. Although 
``full and open'' competition remains the general rule when agencies 
acquire goods and services, a variety of legislative, regulatory, and 
policy initiatives, implemented primarily over the past decade, 
authorize competition on a significantly more restricted and informal 
basis. The purpose of this review, which has been called for by the 
White House, is to identify steps for ensuring that agency competition 
practices facilitate access to the full range of marketplace 
capabilities--especially those of small businesses--to consistently 
achieve good quality at lower cost to the taxpayer. This review will 
occur in conjunction with an initiative to address contract bundling 
(i.e., the consolidation of two or more requirements previously 
provided or performed under separate smaller contracts into a single 
contract that is likely to be unsuitable for award to a small 
business).
    OMB invites interested parties from both the public and private 
sector, and especially from small businesses, to provide comments on: 
The positive and negative effects of agency competition practices from 
the 1990s to the present, and the impact of contract bundling. 
Interested parties may offer oral and/or written comments at a public 
meeting to be held on June 14, 2002. Parties may also provide written 
comments directly to OMB's Office of Federal Procurement Policy (OFPP) 
by the date indicated below.

DATES: Public Meeting: A public meeting will be conducted at the 
address shown below on June 14, 2002, from 1 p.m. to 3 p.m. Eastern 
standard time. The time period may be extended based on the level of 
interest expressed. Parties wishing to make formal oral presentations 
at the public meeting must contact Ms. Barbara Diering of OFPP by June 
3, 2002. Due to time limitations, OFPP will notify individuals of their 
speaking status (time) prior to the meeting. Time allocations for oral 
presentations will depend on the number of individuals who desire to 
make presentations. Parties wishing to share written statements at the 
public meeting must submit such statements to OFPP by June 7, 2002.
    Statements: In lieu of, or in addition to, participating in the 
public meeting, interested parties may submit comments to OFPP at the 
address shown below on or before July 1, 2002.

ADDRESSES: Public Meeting: The public meeting will be held at the 
General Services Administration (GSA) auditorium, 18th and F Streets 
NW., Washington, DC 20405.
    Statements: Interested parties may send comments by electronic mail 
(e-mail) to [email protected]. While e-mail is preferred, parties 
may alternatively submit comments by facsimile (202) 395-5105. In 
either case, please cite ``Competition in contracting review'' as the 
subject. Since hard copy mail is not being accepted on a regular basis 
(due to security reasons), comments should not be submitted in this 
mode. Parties that cannot submit comments using either e-mail or 
facsimile should contact Ms. Diering.

FOR FURTHER INFORMATION CONTACT: For clarification of subject matter 
related to the review of competition practices: Mr. Mathew Blum, OFPP, 
(202) 395-4953.
    For clarification of subject matter related to contract bundling 
and small business issues: Mr. Michael Gerich, OFPP, (202) 395-6811.
    For public meeting information and submission of comments to OFPP: 
Ms. Barbara Diering, OFPP, (202) 395-3256.
    The TTY number for further information is: 1-800-877-8339.

SUPPLEMENTARY INFORMATION: In 1984, the Competition in Contracting Act 
(CICA), Public Law 98-369, sec. 2701, established ``full and open'' as 
the competition standard in federal contracting. CICA's enactment 
marked a culmination of concerns that competition had become the 
exception, rather than the rule, in acquiring goods and services. 
Despite these concerns, CICA's approach to competition has been 
criticized as unduly burdensome and complex. These concerns led to a 
series of legislative, regulatory, and policy reforms--the most 
significant of which occurred in the mid-1990s--to streamline and 
simplify competition and contracting processes. Many of these changes 
authorize competition on a relatively restrictive and informal basis. 
These changes include, among others:
     Authority to conduct limited competitions under multiple 
award task and delivery order contracts (MACs) or GSA's Multiple Award 
Schedules (MAS) program, where the source selection process for 
becoming a contract holder is open to all interested sources but 
competitions for orders are limited to pre-qualified contract holders; 
and
     Authority to seek competition ``to the maximum extent 
practicable'' using simplified source selection procedures for all 
actions under the simplified acquisition threshold (SAT), which is 
currently at $100,000, and, on a test basis, up to $5 million for 
commercial items.
    An increasing number of recent reports addressing streamlined 
acquisition processes and competition practices, including studies by 
the General Accounting Office and agency inspectors general, call into 
question whether agencies are taking advantage of the full range of 
marketplace capabilities in their use of competition. In addition, 
concerns have been voiced that other acquisition practices are also 
limiting opportunities for contractors, especially small businesses. In 
particular, there is ongoing concern that agencies are unnecessarily 
bundling

[[Page 30404]]

contracts and, in doing so, have created an environment that makes it 
difficult for small businesses to flourish.
    The President is committed to ensuring that agencies take full 
advantage of competition in contracting, especially the services of 
small business contractors. This commitment, like those in the 
President's Management Agenda generally, reflect the Administration's 
focus on strengthening the performance of government through results-
oriented initiatives--i.e., in this case, improving the return on 
taxpayer investments in contracting. To this end, OMB has been 
instructed both to review competition practices at agencies with 
significant procurement activities and to develop a strategy to address 
contract bundling.
    OMB has established two inter-agency working groups to carry out 
these efforts: one working group will address agency competition 
practices; the other will develop a strategy for unbundling contracts 
whenever practicable. OMB seeks public comment from all interested 
parties, and especially from small businesses, to inform these working 
groups. Comments are especially welcome on the following topics:
    1. Use of other than full and open competition. What are the 
positive and negative effects of authorities that allow competition on 
other than a full and open basis?
     Authorities to consider might include:
    (1) Micro-purchase authority (see Federal Acquisition Regulation 
(FAR) Subpart 13.2);
    (2) Authority to transact using the government-wide purchase card 
(see FAR 13.301);
    (3) Authority to seek competition to the ``maximum extent 
practicable'' and use of simplified source selection procedures for 
acquisitions under the SAT (see FAR part 13 generally) and up to $5 
million for the acquisition of commercial items (see FAR subpart 13.5);
    (4) Authority to conduct limited competitions through MACs (see FAR 
16.504 and 16.505) and the MAS program (see FAR subpart 8.4); and
    (5) Inter-agency contracting through government-wide acquisition 
contracts (i.e., task or delivery order contracts for information 
technology established for government-wide use and operated by 
executive agents designated by OMB), multi-agency contracts (i.e., task 
or delivery order contracts established for use by government agencies 
consistent with the Economy Act), or other contracts for multiple 
agency use.
     Effects to consider might include:
    (a) Opportunities to learn about and participate in planned 
acquisitions;
    (b) Ability of contractors to offer, or agencies to secure: (i) 
Fair and reasonable pricing, (ii) favorable terms and conditions, and 
(iii) timely delivery of good and services; and
    (c) Ability of contractors to make meaningful offers and agencies 
to make rationally-based decisions.
    2. Use of full and open competition. What are the effects, positive 
and negative, of changes made in the way full and open competition is 
pursued, such as under Part 15 of the FAR? (For effects to consider, 
see question no. 1.)
    3. Areas of impact. Have the authorities identified in question 
nos. 1 and 2 had an especially noticeable effect on any particular: (a) 
Dollar range, (b) contract type, or (c) product or service category?
    4. Barriers to small business participation. What barriers 
presently make it difficult for small businesses to participate in 
federal procurement, and what steps can be taken to remove barriers to 
participation, particularly in full and open competitions?
    5. Contract bundling. If you believe that agency contract bundling 
has direct effects on participation by small businesses in federal 
contracting, what steps can be taken to mitigate those effects?
    6. Application of electronic commerce techniques. How has 
electronic commerce affected contractor participation in government 
contracting in general, and small business participation in particular, 
and in what, if any, ways can its applications be improved to increase 
participation in government contracting?
    7. Studies and articles on competition and bundling. What, if any, 
recent studies or articles addressing competition or contract bundling 
in federal contracting should be considered by OMB's competition and 
bundling working groups?

Special Accommodations

    The public meeting is physically accessible to people with 
disabilities. Requests for sign language interpretation or other 
auxiliary aids should be directed to Ms. Diering (202-395-3254) at 
least 5 days prior to the meeting date.

Angela B. Styles,
Administrator.
[FR Doc. 02-11139 Filed 5-3-02; 8:45 am]
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