House Small Business Subcommittee on Contracting and Workforce, under the chairmanship of Rep. Richard Hanna (R-NY), today held a hearing on how contract bundling and consolidation negatively affects small businesses that wish to compete in the federal marketplace. Testimony revealed that the Obama administration has ignored the law on bundling, causing small businesses to lose out on billions in contracts.
“The evidence is clear that the Executive Branch is not following the law on contract bundling,” said Chairman Hanna. “Because the federal government spends half a trillion dollars on contracted goods and services, we owe it to hardworking taxpayers to make sure their money is used wisely and efficiently. But unfortunately, taxpayers are harmed when small businesses are unable to fairly compete for work simply because the government unnecessarily combined multiple tasks. That is because we know overall costs are driven down when small businesses are able to compete and bid. The Administration needs to do much better in following the law on bundling, and I look forward to working with Chairman Graves on legislative reforms to ensure that small businesses are able to compete on more contracts – which means more jobs for small business workers and savings for taxpayers.”
Small businesses are hesitant to even bid on work when contracts are lumped into one unnecessarily large contract rather than offered as several separate jobs. In many cases, the government is not even conducting the required analysis or submitting the required data so we can assess the harm unjustified bundling inflicts on small companies.
Earlier this year, Hanna introduced a bill to bring more efficiency and cost-savings to the construction contracting process. The Commonsense Construction Contracting Act of 2013 (CCCA) is bipartisan legislation to change the way the federal government chooses construction services, ensuring a more thorough bidding process, which benefits the taxpayer and government.
Materials from the hearing are available on the Committee’s website HERE.
Juanita Beauford, President of the Association of Procurent Technical Assistance Centers in Newark, DE said, “Many of our members – procurement counselors across the country - report frustration and concern among their small business clients about dwindling bid opportunities as agencies increasingly rely upon larger acquisition mechanisms such as Strategic Sourcing, Government-wide Acquisition Contracts (GWACs), Multi-Agency Contracts (MACs), Omnibus “Single Solution” contracts, and multiple year Indefinite Delivery Indefinite Quantity (IDIQ) contracts in addition to more traditional bundling and consolidation.”
Robert A. Burton, Senior Partner at Venable in Washington, DC said, “…over the past sixteen years, Congress has attempted to shield small businesses from the negative effects of agencies’ increased usage of bundling and consolidation. Though the regulations are robust on paper, their implementation has been stymied by various forces including a lack of accurate data, agency compliance and meaningful recourse. In other words, the regulations governing bundling and consolidation simply have no teeth. Accordingly, I would recommend that Congress strongly consider implementing an enforcement mechanism to ensure agency compliance with bundling and consolidation regulations (e.g. centralizing accountability for written justifications and reporting with the senior procurement executive in each agency).”
Gloria Larkin, President of TargetGov in Baltimore, MD said, “In our view, bundling and consolidation continues to hamper small businesses in the federal marketplace. We believe that contracts that can be serviced by small businesses should not be subject to any form of consolidation. It is our recommendation the following actions be taken to minimize unnecessary and unjustified consolidation: 1) improve the collection of statutorily required data from agencies to measure the impact of bundling and consolidation on small businesses; 2) complete the regulatory actions required in the National Defense Authorization Act for FY2013 and the Small Business Jobs Act of 2010; and 3) increase outreach to small business vendors regarding the consolidation and bundling processes.”