White House Anti-Bundling Strategy Draws Fire The Bush administration’s strategy to combat contract bundling faces formidable obstacles from bureaucratic resistance and because of a lack of resources to carry out the plan, the chair of the Senate Small Business Committee and the General Accounting Office said. The strategy announced last fall gives new responsibilities to the Small Business Adminis- tration’s procurement center representatives and to agencies’ Offices of Small and Disadvantaged Business Utilization. Both are assigned to monitor acquisition planning and promote alternatives to bundling. But SBA has only 47 procurement center representatives to cover 255 major federal contracting offices. “Eighty percent of the (largest) federal contracting offices have no oversight,” said Sen. Olympia Snowe (R-ME), the committee chair. She held a hearing on bundling March 18. The procurement center representatives and OSDBUs “are critical to ensuring successful implementation of (the) bundling plan,” David Cooper, GAO’s director of acquisition and sourcing management, testified at the hearing. But he added, “We are concerned that the added responsibilities will further burden a staff that is already struggling to accomplish their mission.” SBA Administrator Hector Barreto told Snowe the agency will not ask for funds for additional PCRs. Instead, he emphasized the OSDBU’s responsibilities. “We really need to drill down more at the agency level, and that’s why the OSDBUs have an important role to play,” he said. “A very determined and vigilant focus and a continuous focus is going to be required.” GAO’s Cooper added, “The real test…is getting this message down to the contract officer and the program people who establish the requirements.” In prepared testimony, Cooper said, “We believe the plan, if successfully implemented – and that’s a big if – could be a positive step toward addressing longstanding concerns about opportunities for small businesses to compete for federal contracts.” The Office of Management and Budget directed agencies to submit their first reports on efforts to implement the plan by Jan. 31. Nearly two months later, 10 of the 22 largest departments and agencies have not yet filed reports, said Angela Styles, OMB’s administrator of federal procurement policy. Sen. Snowe said, “That’s bothersome, because that seems to be an indication that agencies are not taking this seriously.” But Styles said the delay is understandable since this is the first report and some agencies are not sure how to prepare it. A proposed rule and amendments to SBA regulations to implement the administration’s strategy are pending. They are open for public comment until April 1. The proposals would require written reviews and justifications of all bundled contracts above specific dollar amounts, including purchases through GSA Schedules and other multiple award contracts. (For the text of the proposals, go to http://www.arnet.gov/.) The proposed rule would require agencies to prepare a written justification for any bundled contract above $7 million for the Defense Department; $5 million for NASA, the Department of Energy and GSA; and $2 million for all other agencies. Snowe asked, “Isn’t this threshold high?” Styles said the thresholds were set based on research into each agency’s contracting practices and were meant to affect a large number of contracts without bogging the system down in excess paperwork. But Snowe said the average size of a small-business contract is just over $400,000, so that many of those could be bundled without reaching the thresholds for review. Two Democratic senators declared the administration strategy inadequate and announced they are introducing legislation to provide additional protections against bundling. Sen. John Kerry (D-MA), ranking minority member of the Small Business Committee, said he has re-introduced the Small Business Federal Contractors Safeguard Act, which would apply anti-bundling rules to new contracts as well as consolidations of existing ones. The bill never came up for a vote in the last Congress. Sen. Christopher Dodd (D-CT) said he will introduce legislation to prohibit an agency from bundling any contract if it fails to achieve the small business contracting goals set by Congress. The bill is a companion to the Small Business Contract Equity Act introduced in the last Congress by Rep. Nydia Velazquez (D-NY), ranking minority member of the House Small Business Committee. The legislation would also strengthen the Small Business Administration’s hand in stopping bundled contracts. It never came up for a vote. “We are moving backward, unfortunately, (on small business contracting) in this administration,” Dodd said at forum sponsored by the U.S. Hispanic Chamber of Commerce March 13. At that forum, Steve Denlinger, CEO of the Latin American Management Association, commended the president for his aggressive stance against bundling, but added, “Unless the president presses the heads of agencies vigorously, (the growth of bundled contracts) is going to continue into the indefinite future…What I don’t see is a strategy to turn bundling around.” Denlinger endorsed key elements of the Velazquez and Dodd bills, adding, “I think the president needs to say contract bundling needs to stop. It’s at 50% of federal contract dollars now. That is enough.” One year after President Bush declared his policy to fight bundling, Rep. Velazquez said, “The administration does not have one bundled contract that they can point to that they have stopped or broken up.”