Bundling Strategy "Is Not Working," Industry Execs Say Two years after the Bush administration issued new rules to control contract bundling, those rules are being widely ignored, according to representatives of both large and small contractors. “This process is not working for small business,” declared Isiah Harris, president of Ameritac Inc. and of the Northern California 8(a) Association. The regulations require SBA to review all bundled contracts above certain dollar amounts to determine whether the bundling is justified. But SBA’s inspector general reported in July that the agency had reviewed only 13% of contracts that were identified as bundled over the past four years. SBA said it lacks resources to monitor all agencies’ activities. (SAA, 8/5) Harris said he believes the regulations are adequate, but agencies are not abiding by them. He spoke on a panel at the Contract Services Association’s fall meeting in Washington Oct. 13. While SBA’s oversight is lacking, the agency has been fairly aggressive in supporting protests over bundled contracts, said Washington lawyer Wayne Keup, but the Government Accountability Office, which decides the protests, has been lenient: “GAO is not very demanding of the agencies when it comes to their justification of bundling.” He said some agencies take “a seat-of-the-pants approach” to estimating cost savings and justifying bundles. David Miller, CEO of EMI Services, a small engineering firm in Idaho Falls, ID, said agencies seem confused by the rules and are “interpreting [them] in several different ways.” SBA’s IG found that the agency had not published a best practices guide nor an operating plan for carrying out President Bush’s anti-bundling strategy. The agency had not created a database of bundled contracts, as required by law. “As a result, SBA did not know the extent that bundling may be negatively impacting small business participation in government contracting,” the IG said. The president announced in 2002 that his administration would break up contracts that were unnecessarily bundled. The 2003 regulations were the result of his order. The regulations require agencies to provide written justifications for bundled contracts valued at more than $7 million for the Defense Department; $5 million for NASA and the Energy Department; and $2 million for all other agencies. SBA is tasked to review the justifications. Bundled contracts may be justified for reasons of cost savings and efficiency, but some agencies are bundling work so that they have to deal with only one prime contractor, said Tom Lampley, vice president of IAP World Services, a large prime that has support contracts at several military bases. “Just reducing the number of contractors is not an acceptable justification,” he added. He said some military contracting officers are recognizing that they have gone too far in bundling unrelated services into a single contract and are now unbundling some of the requirements. “We’re seeing it happen in a big way,” he declared. Lampley said he is not opposed to bundling, but each contract needs to be examined individually: “Some of them make sense. Some of them don’t.” Miller, of EMI Services, warned fellow contractors that bundling is inevitable and advised them to form partnerships with large primes. But he said they should make sure that their partners give them a share of the work that will strengthen their past-performance ratings. “I’m not interested in just mowing the grass,” he said.