Factors that take into account the prospective contractor's proposed subcontracting plan and past performance in subcontracting with small businesses Multiple-award contract whose value exceeds the substantial bundling threshold see Table 2. Provision soliciting bids from "any responsible source," including "responsible small business concerns and teams or joint ventures of small business concerns". Source: Congressional Research Service, based on 15 U. In addition, while not required to incorporate such terms expressly in their solicitations, procuring activities are required to accept offers that provide for the use of the team of subcontractors proposed by the offeror in response to a solicitation for a bundled contract.
Other obligations involve reporting regarding bundling policies or practices. Specifically, agency OSDBUs and OSPBs are to produce annual reports for the agency head and the SBA Administrator assessing the extent to which small businesses received their "fair share" of federal procurement dollars; the adequacy of agencies' bundling documentation; and the adequacy of actions taken to mitigate the effects of necessary and justified bundling on small businesses.
The Small Business Act's restrictions on the consolidation of requirements by procuring activities are akin to the Act's restrictions on bundling, although of more recent origin. See Chronology. As defined under the Act, "consolidation" is a broader term than "bundling.
Also, as is the case with bundling, "[t]he Small Business Act does not preclude agencies from consolidating requirements. Only procurements that are encompassed within the Small Business Act's definition of "consolidation" are subject to its restrictions on the consolidation of requirements. This definition provides that. Consolidation of contract requirements, consolidated contract, or consolidated requirement means a solicitation for a single contract or a Multiple Award Contract to:.
This definition is broader than the definition of "bundling" in two notable ways. First, it encompasses requirements that were previously provided or performed by other than small businesses, and not just those previously provided or performed by small businesses or suitable for award to small businesses. The definition of "consolidation" has this reach because it applies to requirements previously provided or performed under "two or more separate contracts," and "separate contract" is defined to mean "a contract or order Certain requirements do, however, fall outside the definition of "consolidation.
When the incorporation of multiple requirements into a single solicitation could result in consolidation under the previous definition, procuring activities are required to take certain steps before proceeding with the acquisition. Table 4. Comparison of Agencies' Obligations as to Bundling and Consolidation. As Table 4 illustrates, the requirement that procuring activities identify "any negative impact" that the acquisition strategy could have on contracting with small businesses is unique to consolidation—and has been the subject of the only litigation, to date, regarding the Small Business Act's limitations on consolidation.
Neither the Act nor the SBA regulations implementing the Act provide any guidance regarding how a procuring activity is to go about identifying an acquisition strategy's impact on small businesses, or assessing whether such impact is "negative. Another matter of interest is the impact of potential reduction in sales for small businesses not chosen as an OS3 CLIN [contract line item number] provider.
GSA has considered this potential negative impact on small businesses but has determined the benefits to be gained through OS3 CLINs will outweigh this negative impact. According to the SBA, this statement—consisting of only "two sentences"—was not the "thoughtful and meaningful" analysis that Congress intended as a precursor to consolidation.
GAO, however, took a different view. Unlike the SBA, which had focused upon the legislative history of the restrictions on consolidation and what it viewed as the congressional intent, GAO focused on the text of the Small Business Act. See also 13 C.
Compare 48 C. The definition of "consolidation" given in the Small Business Act does not incorporate the provisions regarding the monetary value of the requirements included in the SBA regulations i. See 15 U. See generally Dep't of Defense, Gen. See, e. A "procuring activity" is any component of an executive agency with significant acquisition functions that is designated as such by the head of the agency.
Both this term and the more general term "agency" are used in this report in referring to components of the federal government that are buying goods or services. However, "procuring activity" is specifically used to distinguish obligations arising at lower levels within an agency from higher-level agency obligations.
For example, requirements could be consolidated without being bundled if they involve construction projects performed at two or more sites. Construction requirements have generally been seen as new requirements and, as such, not encompassed within the definition of "bundling. CICA generally requires that solicitations contain restrictive provisions and conditions only to the extent "necessary to satisfy the needs of the executive agency.
When separate requirements are combined into one solicitation, competition can be restricted because firms that can furnish only a portion of the requirements are excluded. For this reason, the Government Accountability Office GAO and other bid protest forums require procuring activities to have a "reasonable basis" for any bundling. Provisions of the National Defense Authorization Act for FY once similarly limited "combination" of certain requirements for depot-level maintenance and repair, but were repealed in See P.
Cohen, No. C SC, U. Aircraft Co. For example, unlike CICA's restrictions, the Small Business Act's bundling provisions have no application to arguments by large businesses that discrete portions of consolidated procurements should be broken out for competition.
The Small Business Act requires that agencies demonstrate "measurably substantial benefits" in order to justify a bundled procurement. In contrast, CICA permits solicitations to contain restrictive provisions and conditions only to the extent necessary to satisfy the needs of the agency. Section 15 also requires that agencies set and meet agency-specific goals for the percentage of contract and subcontract dollars awarded to these categories of small businesses.
A "multiple award contract" is a single contract that is awarded to multiple vendors, rather than to a single vendor. Each vendor awarded the contract is generally eligible to be awarded any task or delivery orders issued under the contract. In contrast, vendors not awarded the contract are generally ineligible for such orders. GAO issued a report on this topic in November Tyler Construction Group v. United States, F. See also Phoenix Scientific Corp.
The Small Business Act also defines "separate smaller contract" as a "contract that has been performed by one or more small business concerns or was suitable for award to 1 or more small business concerns," as previously noted. See supra note 1. Regulations promulgated under the authority of this act further define what a "single contract" means for purposes of the definition of "separate smaller contract.
Combining new requirements could, however, potentially constitute consolidation in violation of CICA. See supra notes 9 - 10 and accompanying text. Procuring activities have sometimes asserted that requirements for construction are, per se , new requirements, or that adding a new requirement to requirements previously performed means there is no bundling.
Group , 83 Fed. However, no judicial or administrative tribunal appears to have validated these proposed constructions of "bundling. Similarly, in Nautical Engineering , GAO found that any bundling was justified because the government would receive measurably substantial benefits from the bundled solicitation. At least one procuring activity has also asserted that a procurement is not bundled if at least one small business could perform the requirements, on the theory that the definition of "bundling" includes only solicitations that are "unsuitable for award to a small business," and a solicitation is not unsuitable for award to a small business if one small business could perform it.
See Nautical Eng'g, Inc. GAO did not reach the merits of this argument, but other GAO decisions raise questions about its likelihood of success. When used in a geographic sense in the context of procurement, "United States" generally means the 50 states and the District of Columbia, although its meaning can vary somewhat for purposes of affirmative action requirements, the Service Contract Act, and other provisions of procurement law.
Also, in assessing whether cost savings would be achieved, the contracting officer is required to consider the costs that have been charged or could be charged by small businesses for the same or similar work. See 48 C. We agree. See also Tyler Constr.
Electrodynamics, Inc. Decisions in protests with the procurement agency—which is one of the three forums for bid protests—are not published. Also, decisions are not published by GAO—another of the protest forums—in cases where the agency opts to take corrective action prior to the issuance of a decision on the merits. Note also that timeliness, standing, and other issues may affect a protester's ability to maintain a challenge to allegedly bundled requirements.
See infra notes 66 - 68 and accompanying text. The proposed amendments to the FAR regarding bundling and consolidation would define "small business teaming arrangement" to mean: " A "partial set-aside" involves the reservation of certain requirements under the contract for a competition in which only small businesses may participate.
Neither the act nor its implementing regulations define "significant bundling. OSDBUs and OSBPs are also responsible for "coordinating" on acquisition planning and strategy development, including bundling determinations, at the agency level. Other information to be provided includes 1 a written statement explaining why the procuring activity believes any bundled or consolidated requirements are necessary and justified, among other things; 2 all required clearances for the bundled, substantially bundled, or consolidated requirement; and 3 a written statement explaining why the acquisition cannot be structured in certain ways to facilitate small business participation, in cases where the description of the proposed requirements makes small business participation likely, or if a proposed procurement for construction seeks to package or consolidate discrete construction projects.
See 13 C. Procuring activities generally have wide latitude in implementing procurement strategies that mitigate the effects of substantial bundling, and protests alleging that agencies could better mitigate these effects by taking specific steps are generally denied.
The protester in B. Aircraft argued, in part, that the agency failed to comply with the FAR because the subcontracting goal for the bundled contract was lower than the agency's overall goal and the agency could have had a large company provide logistics support while procuring parts from small businesses in order to promote more small business participation. Executive Order requires that the heads of agencies "carefully review" and "give due consideration" to the SBA's views.
However, it does not require the agency to comply with OMB's recommendations or advice. This suspension could last up to 61 days. The contracting officer has 5 days in which to reject the recommendations of the PCR. The PCR has 2 days to appeal that rejection to the head of the procuring activity. The head of the procuring activity has 7 days to respond. The SBA then has 15 days to make a written appeal to the secretary or agency head, who has 30 days to respond.
The disputed acquisition generally does not proceed during this period. However, procuring activities may proceed with the disputed acquisition if the contracting officer determines that proceeding to contract award and performance is "in the public interest. They are also encouraged, but not required, to inform any incumbent small business of how to contact the "appropriate [SBA] representative.
These three are generally the only bid protest forums. See 31 U. However, specific issues relating to the award of federal contracts are protested to other agencies, rather than the bid protest forums. At the time, GAO had jurisdiction over protests involving task and delivery orders only when the protest alleged that the order effectively modified the underlying contract.
The SBA regulations note that PCRs are to "recommend" that procuring activities incorporate these provisions in their solicitations. However, agencies are not required to do so. Note also that if a small business teams under 15 U. This provision is significant because affiliations between businesses, or relationships allowing one party control or the power of control over another, generally count in size determinations, with the SBA considering "the receipts, employees, or other measure of size of the concern whose size is at issue and all of its domestic and foreign affiliates, regardless of whether the affiliates are organized for profit.
Businesses can thus be determined to be other than small because of their involvement in joint ventures, subcontracting arrangements, or franchise or license agreements, among other things, provided that their personnel numbers or income, plus those of their affiliate s , are over the pertinent size threshold. See also U. Please help us improve our site! No thank you. LII U. Code Notes prev next. B to satisfy requirements of the Federal agency for construction projects to be performed at 2 or more discrete sites; and.
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 ensures that steps will be taken to include small business concerns in the acquisition strategy. 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.
C Notice Not later than 7 days after making a determination that an acquisition strategy involving a consolidation of contract requirements is necessary and justified under subparagraph A , the senior procurement executive or Chief Acquisition Officer shall publish a notice on a public website that such determination has been made. B acquisition cycle;. C terms and conditions; and.
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Contract consolidation is. (a) Consolidation may provide substantial benefits to the Government. · (1) Market research has been conducted; · (2) Any alternative contracting approaches that. Soliciting a single contract (including MACs) to satisfy two or more requirements for supplies or services valued in excess of $2M that have.