[House Report 112-725]
[From the U.S. Government Publishing Office]
112th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 112-725
======================================================================
CONTRACTOR OPPORTUNITY PROTECTION ACT OF 2012
_______
December 21, 2012.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Graves of Missouri, from the Committee on Small Business, submitted
the following
R E P O R T
[To accompany H.R. 4081]
The Committee on Small Business, to whom was referred the
bill (H.R. 4081) to amend the Small Business Act to consolidate
and revise provisions relating to contract bundling, and for
other purposes, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
CONTENTS
Page
I. Amendment.......................................................1
II. Purpose of the Bill and Summary.................................7
III. Need for Legislation............................................7
IV. Hearings........................................................9
V. Committee Consideration.........................................9
VI. Section-by-Section Analysis of H.R. 4081.......................18
VII. Unfunded Mandates..............................................21
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditur21
IX. Oversight Findings.............................................21
X. Statement of Constitutional Authority..........................22
XI. Congressional Accountability Act...............................22
XII. Federal Advisory Committee Act Statement.......................22
XIII. Statement of No Earmarks.......................................22
XIV. Performance Goals and Objectives...............................22
XV. Changes in Existing Law Made by the Bill, as Reported..........22
I. Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Contractor Opportunity Protection Act
of 2012''.
SEC. 2. CONSOLIDATION OF PROVISIONS RELATING TO CONTRACT BUNDLING.
Section 44 of the Small Business Act (15 U.S.C. 657q) is amended to
read as follows:
``SEC. 44. CONTRACT BUNDLING.
``(a) Definitions.--In this Act:
``(1) Bundled contract.--The term `bundled contract'--
``(A) means a contract that is entered into to meet
procurement requirements that are combined in a
bundling of contract requirements, without regard to
whether a study of the effects of the solicitation on
Federal officers or employees has been made; and
``(B) does not include--
``(i) a contract with an aggregate dollar
value below the dollar threshold; or
``(ii) a single award contract for the
acquisition of a weapons system acquired
through a major defense acquisition.
``(2) Bundling methodology.--The term `bundling methodology'
means--
``(A) a solicitation to obtain offers for a single
contract or a multiple award contract;
``(B) a solicitation of offers for the issuance of a
task or a delivery order under an existing single or
multiple award contract; or
``(C) the creation of any new procurement
requirements that permits a combination of contract
requirements, including any combination of contract
requirements or order requirements.
``(3) Bundling of contract requirements.--The term `bundling
of contract requirements', with respect to the contract
requirements of a Federal agency--
``(A) means the use of any bundling methodology to
satisfy 2 or more procurement requirements for new or
existing goods or services provided to or performed for
the Federal agency, including any construction
services, that is likely to be unsuitable for award to
a small-business concern due to--
``(i) the diversity, size, or specialized
nature of the elements of the performance
specified;
``(ii) the aggregate dollar value of the
anticipated award;
``(iii) the geographical dispersion of the
contract performance sites; or
``(iv) any combination of the factors
described in clauses (i), (ii), and (iii); and
``(B) does not include the use of a bundling
methodology for an anticipated award with an aggregate
dollar value below the dollar threshold.
``(4) Chief acquisition officer.--The term `Chief Acquisition
Officer' means the employee of a Federal agency designated as
the Chief Acquisition Officer for the Federal agency under
section 16(a) of the Office of Federal Procurement Policy Act
(41 U.S.C. 1702(a)).
``(5) Contract.--The term `contract' includes, for purposes
of this section, any task order made pursuant to an indefinite
quantity, indefinite delivery contract.
``(6) Contract bundling.--The term `contract bundling' means
the process by which a bundled contract is created.
``(7) Dollar threshold.--The term `dollar threshold' means--
``(A) in the case of a contract for construction,
$5,000,000; and
``(B) in any other case, $2,000,000.
``(8) Major defense acquisition program.--The term `major
defense acquisition program' has the meaning given in section
2430(a) of title 10, United States Code.
``(9) Previously bundled contract.--The term `previously
bundled contract' means a contract that is the successor to a
contract that required a bundling analysis, contract for which
any of the successor contract were designated as a consolidated
contract or bundled contract in the Federal procurement
database, or a contract for which the Administrator designated
the prior contract as a bundled contract.
``(10) Procurement activity.--The term `procurement activity'
means the Federal agency or office thereof acquiring goods or
services.
``(11) Procurement requirement.--The term `procurement
requirement' means a determination by an agency that a
specified good or service is needed to satisfy the mission of
the agency.
``(12) Senior procurement executive.--The term `senior
procurement executive' means an official designated under
section 16(c) of the Office of Federal Procurement Policy Act
(41 U.S.C. 1702(c)) as the senior procurement executive for a
Federal agency.
``(b) Policy.--The head of each Federal agency shall ensure that the
decisions made by the Federal agency regarding contract bundling are
made with a view to providing small business concerns with the maximum
practicable opportunities to participate as prime contractors and
subcontractors in the procurements of the Federal agency.
``(c) Contract Bundling.--
``(1) Proposed procurements.--Paragraphs (2) through (4)
shall apply to to a proposed procurement if the proposed
procurement--
``(A) would adversely affect one or more small
business concerns, including the potential loss of an
existing contract;
``(B) includes, in its statement of work, goods or
services--
``(i)(I) currently being performed by a small
business; and
``(II) if the proposed procurement is in a
quantity or estimated dollar value the
magnitude of which renders small business prime
contract participation unlikely; or
``(ii)(I) that are of a type that the
Administrator through market research can
demonstrate that two or more small businesses
are capable of performing; and
``(II) if the proposed procurement would be
combined with other requirements for goods and
services;
``(C) is for construction and--
``(i) seeks to package or combine discrete
construction projects; or
``(ii) the value of the goods or services
subject to the contract exceeds the dollar
threshold; or
``(D) is determined by the Administrator to have a
solicitation that involves an unnecessary or
unjustified bundling of contract requirements.
``(2) Responsibility of the procurement activity.--At least
45 days prior to the issuance of a solicitation, the
Procurement Activity shall notify and provide a copy of the
proposed procurement to the procurement center representative
assigned to the Procurement Activity. The 45-day notification
process under this paragraph shall occur concurrently with
other processing steps required prior to issuance of the
solicitation. The notice shall include a statement setting
forth the proposed procurement strategy required by subsection
(e), and--
``(A) explaining why the proposed acquisition cannot
be further divided into reasonably small lots or
discrete tasks in order to permit offers by small
business concerns;
``(B) listing, if applicable, the incumbent
contractors disaggregated by and including names,
addresses, and whether or not the contractor is a small
business concern;
``(C) describing the industries that might be
interested in bidding on the contract requirements;
``(D) delineating the number of small business
concerns listed in the industry categories that could
be excluded from future bidding if the contract is a
bundled contract, including any small business bidders
that had bid on previous procurement requirements that
are included in the bundling of contract requirements;
``(E) delineating the number of existing small
business concerns whose contracts will cease if the
contract bundling proceeds;
``(F) explaining why the delivery schedules cannot be
established on a realistic basis that will encourage
small business participation to the extent consistent
with the actual requirements of the Government;
``(G) explaining why the proposed acquisition cannot
be offered so as to make small business participation
likely;
``(H) explaining why construction cannot be procured
as separate discrete projects; and
``(I) explaining why the agency has determined that
the bundled contract is necessary and justified.
``(3) Publication of notice statement.--Concurrently, the
statement required in paragraph (2) shall be published in the
Federal contracting opportunities database.
``(4) Recompetition of a previously bundled contract.--If the
proposed procurement is a previously bundled contract, that is
to be recompeted as a bundled contract, the Administrator shall
determine, with the assistance of the agency proposing the
procurement--
``(A) the amount of savings and benefits (in
accordance with subsection (d)) achieved under the
bundling of contract requirements;
``(B) whether such savings and benefits will continue
to be realized if the contract remains bundled, and
whether such savings and benefits would be greater if
the procurement requirements were divided into separate
solicitations suitable for award to small business
concerns;
``(C) the dollar value of subcontracts awarded to
small business concerns under the bundled contract,
disaggregated by North American Industrial
Classification System Code;
``(D) the percentage of subcontract dollars awarded
to small businesses under the bundled contract,
disaggregated by North American Industrial
Classification System Code; and
``(E) the dollar amount and percentage of prime
contract dollars awarded to small businesses in the
primary North American Industrial Classification System
Code for that bundled contract during each of the two
fiscal years preceding the award of the bundled
contract and during each fiscal year of the performance
of the bundled contract.
``(5) Failure to provide notice.--
``(A) No notification received.--If no notification
of the proposed procurement or accompanying statement
is received, but the Administrator determines that the
proposed procurement is a proposed procurement
described in paragraph (1), then the Administrator
shall require that such a statement of work be
completed by the Procurement Activity and sent to the
procurement center representative and postpone the
solicitation process for at least 10 days but not more
than 45 days to allow the Administrator to review the
statement and make recommendations as described in this
section before the procurement process is continued.
``(B) No work continued.--If the Administrator
requires a Procurement Activity to provide a statement
of work pursuant to subparagraph (A), the Procurement
Activity shall not be permitted to continue with the
procurement until such time as the Procurement Activity
complies with the requirements of subparagraph (A).
``(6) Responsibility of the procurement center
representative.--Within 15 days after receipt of the proposed
procurement and accompanying statement, if the procurement
center representative believes that the procurement as proposed
will render small business prime contract participation
unlikely, the representative shall recommend to the Procurement
Activity alternative procurement methods which would increase
small business prime contracting opportunities.
``(7) Disagreement between the administrator and the
procurement activity.--
``(A) In general.--The Administrator may take action
under this paragraph to further the interests of small
businesses if--
``(i) a small business concern would be
adversely affected, directly or indirectly, by
the proposed procurement, and that small
business concern or a trade association
representing such small business concern so
requests; or
``(ii) if the Administrator determines that a
small business concern would be adversely
affected, directly or indirectly, by the
proposed procurement.
``(B) Appeal to agency head.--First, the proposed
procurement shall be submitted for determination to the
head of the contracting agency by the Administrator.
``(C) Failure to agree.--Whenever the Administrator
and the head of the contracting agency fail to agree--
``(i) the Administrator, within ten days
after such decision, may file an appeal with
the appropriate agency board of contract
appeals;
``(ii) the board shall provide the
Administrator and the head of the contracting
agency the opportunity to provide their views
on the disputed contract, except that no oral
testimony or oral argument shall be permitted;
``(iii) the board shall permit interested
bidders to intervene; and
``(iv) the board shall render its decision,
which shall be final agency action for purposes
of chapter 7 of title 5, United States Code,
within 30 days after the appeal has been filed.
``(D) Appeal by affected small business concern to
gao.--If the Administrator takes no action pursuant to
subparagraph (C), a small business concern that would
be adversely affected, directly or indirectly, by the
procurement as proposed, or a trade association that
includes such a small business concern as a member, may
file a protest with the Government Accountability
Office. If the protest is filed by a trade association,
the trade association shall not be required to identify
a specific member in connection with the protest.
``(d) Market Research.--
``(1) In general.--Before proceeding with an acquisition
strategy that could lead to bundled contracts, the head of an
agency shall conduct market research to determine whether
bundling of the requirements is necessary and justified.
``(2) Factors.--For purposes of subsection (c)(1), a bundled
contract is necessary and justified if the bundling of contract
requirements will result in substantial measurable benefits in
excess of those benefits resulting from a procurement of the
contract requirements that does not involve contract bundling.
``(3) Benefits.--For the purposes of bundling of contract
requirements, benefits described in paragraph (2) may include
the following:
``(A) Cost savings.
``(B) Quality improvements.
``(C) Reduction in acquisition cycle times.
``(D) Better terms and conditions.
``(E) Any other benefits.
``(4) Reduction of costs not determinative.--For purposes of
this subsection:
``(A) Cost savings shall not include any reduction in
the use of military interdepartmental purchase requests
or any similar transfer funds among Federal agencies
for the use of a contract issued by another Federal
agency.
``(B) The reduction of administrative or personnel
costs alone shall not be a justification for bundling
of contract requirements unless the cost savings are
expected to be substantial in relation to the dollar
value of the procurement requirements to be bundled.
``(5) Limitation on acquisition strategy.--The head of a
Federal agency may not carry out an acquisition strategy that
includes bundled contracts valued in excess of the dollar
threshold, unless the senior procurement executive or, if
applicable, Chief Acquisition Officer, for the Federal agency,
certifies to the head of the Federal agency that steps will be
taken to include small business concerns in the acquisition
strategy prior to the implementation of such acquisition
strategy.
``(e) Strategy Specifications.--If the head of a contracting agency
determines that an acquisition plan or proposed procurement strategy
will result in a bundled contract, the proposed acquisition plan or
procurement strategy shall--
``(1) identify specifically the benefits anticipated to be
derived from the bundling of contract requirements;
``(2) set forth an assessment of the specific impediments to
participation by small business concerns as prime contractors
that result from the contract bundling and specify actions
designed to maximize small business participation as
subcontractors (including suppliers) at various tiers under the
contract or contracts that are awarded to meet the
requirements; and
``(3) include a specific determination that the anticipated
measurable benefits of the proposed bundled contract justify
its use.
``(f) Contract Teaming.--In the case of a solicitation of offers for
a bundled contract that is issued by the head of an agency, a small-
business concern may submit an offer that provides for use of a
particular team of subcontractors for the performance of the contract.
The head of the agency shall evaluate the offer in the same manner as
other offers, with due consideration to the capabilities of all of the
proposed subcontractors. If a small business concern teams under this
paragraph, it shall not affect its status as a small business concern
for any other purpose.
``(g) Database, Analysis, and Annual Report Regarding Contract
Bundling.--
``(1) Database.--Not later than 180 days after the date of
the enactment of this subsection, the Administrator shall
develop and shall thereafter maintain a database containing
data and information regarding--
``(A) each bundled contract awarded by a Federal
agency; and
``(B) each small business concern that has been
displaced as a prime contractor as a result of the
award of such a contract.
``(2) Analysis.--For each bundled contract that is to be
recompeted, the Administrator shall determine--
``(A) the amount of savings and benefits realized, in
comparison with the savings and benefits anticipated by
the analysis required under subsection (d) prior to the
contract award; and
``(B) whether such savings and benefits will continue
to be realized if the contract remains bundled, and
whether such savings and benefits would be greater if
the procurement requirements were divided into separate
solicitations suitable for award to small business
concerns.
``(3) Annual report on contract bundling.--
``(A) In general.--Not later than 1 year after the
date of the enactment of this paragraph, and annually
in March thereafter, the Administrator shall transmit a
report on contract bundling to the Committee on Small
Business of the House of Representatives and the
Committee on Small Business and Entrepreneurship of the
Senate.
``(B) Contents.--Each report transmitted under
subparagraph (A) shall include--
``(i) data on the number, arranged by
industrial classification, of small business
concerns displaced as prime contractors as a
result of the award of bundled contracts by
Federal agencies; and
``(ii) a description of the activities with
respect to previously bundled contracts of each
Federal agency during the preceding year,
including--
``(I) data on the number and total
dollar amount of all contract
requirements that were bundled; and
``(II) with respect to each bundled
contract, data or information on--
``(aa) the justification for
the bundling of contract
requirements;
``(bb) the cost savings
realized by bundling the
contract requirements over the
life of the contract;
``(cc) the extent to which
maintaining the bundled status
of contract requirements is
projected to result in
continued cost savings;
``(dd) the extent to which
the bundling of contract
requirements complied with the
contracting agency's small
business subcontracting plan,
including the total dollar
value awarded to small business
concerns as subcontractors and
the total dollar value
previously awarded to small
business concerns as prime
contractors; and
``(ee) the impact of the
bundling of contract
requirements on small business
concerns unable to compete as
prime contractors for the
consolidated requirements and
on the industries of such small
business concerns, including a
description of any changes to
the proportion of any such
industry that is composed of
small business concerns.
``(h) Bundling Accountability Measures.--
``(1) Teaming requirements.--Each Federal agency shall
include in each solicitation for any multiple award contract
above the dollar threshold a provision soliciting bids from any
responsible source, including responsible small business
concerns and teams or joint ventures of small business
concerns.
``(2) Policies on reduction of contract bundling.--
``(A) In general.--Not later than 270 days after the
date of enactment of this subparagraph, the Federal
Acquisition Regulatory Council, established under
section 25(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 1302(a)), shall amend the Federal
Acquisition Regulation issued under section 25 of such
Act to--
``(i) establish a Government-wide policy
regarding contract bundling;
``(ii) establish a Government-wide policy on
the solicitation of contractor teams and joint
ventures; and
``(iii) require that the policies established
under clauses (i) and (ii) be published on the
website of each Federal agency.
``(B) Rationale for contract bundling.--Not later
than 30 days after the date on which the head of a
Federal agency submits the report required under
section 15(h), the head of the Federal agency shall
publish on the website of the Federal agency a list and
rationale for any bundled contract for which the
Federal agency solicited bids or that was awarded by
the Federal agency.''.
SEC. 3. REPEAL OF REDUNDANT PROVISIONS.
(a) Certain Provisions Regarding Contract Bundling Repealed.--
(1) Section 15(a) of the Small Business Act (15 U.S.C.
644(a)), is amended by striking ``If a proposed procurement
includes'' and all that follows through ``the matter shall be
submitted for determination to the Secretary or the head of the
appropriate department or agency by the Administrator.''.
(2) All references in law to such sentences as they were in
effect on the date that is one day prior to the effective date
of this Act shall be deemed to be references to section 44(d),
as added by this Act.
(b) Certain Provisions Regarding Market Research Repealed.--
(1) Paragraphs (2) through (4) of section 15(e) of the Small
Business Act (15 U.S.C. 644(e)) are repealed.
(2) All references in law to such paragraphs, as in effect on
the date that is one day prior to the effective date of this
Act, shall be deemed to be references to subsections (d)
through (f), respectively, of section 44 of the Small Business
Act, as added by this section.
(c) Certain Provisions Regarding Contract Bundling Database
Repealed.--
(1) Paragraph (1) of section 15(p) of the Small Business Act
(15 U.S.C. 644(p)) is repealed.
(2) Paragraphs (2) through (4) of section 15(p) of the Small
Business Act (15 U.S.C 644(p)) are repealed. All references in
law to such paragraphs, as in effect on the date that is one
day prior to the effective date of this Act, shall be deemed to
be references to paragraphs (1) through (3), respectively, of
section 44(h) of the Small Business Act, as added by this Act.
(d) Certain Provisions Regarding Bundling Accountability Measures
Repealed.--
(1) Paragraphs (1) and (2) of section 15(q) of the Small
Business Act (15 U.S.C 644(q)) are repealed.
(2) All references in law to such paragraphs, as in effect on
the date that is one day prior to the effective date of this
Act, shall be deemed to be references to paragraphs (1) and
(2), respectively, of section 44(i) of the Small Business Act,
as added by this Act.
(e) Certain Provisions Regarding.--Subsection (o) of section 3 of the
Small Business Act (15 U.S.C.) is repealed.
SEC. 4. TECHNICAL AMENDMENTS.
Section 15 of the Small Business Act (15 U.S.C. 644) is amended--
(1) in the heading of subsection (p), to read as follows:
``Access to Data.--''; and
(2) in the heading of subsection (q), to read as follows:
``Reports Related to Procurement Center Representatives.--''.
II. Purpose and Bill Summary
The purpose of H.R. 4081, the ``Contractor Opportunity
Protection Act of 2012,'' is to amend the Small Business Act
(the Act)\1\ to collect all provisions concerning contract
bundling currently in the Act and transfer them to a revised
Section 44. In addition to making this significant clarifying
change, the bill strengthens the requirements that agencies
must demonstrate before they are entitled to bundle or
consolidate contracts that would have, absent such bundling or
consolidation, been able to be performed by small businesses.
---------------------------------------------------------------------------
\1\Originally, title II of the Act of July 30, 1953, c. 282, 67
Stat. 232, was designated as the Small Business Act of 1953. A plethora
of amendments in subsequent Congresses led to a rewrite in 1958. Pub.
L. No. 85-536, Sec. 1, 72m Stat, 384 (1958). The Act is codified at 15
U.S.C. Sec. Sec. 631-657q.
---------------------------------------------------------------------------
III. Need for Legislation
The Committee has a long history of oversight with respect
to contract bundling. Throughout several Congresses, the
Committee has held a number of hearings on contract bundling,
submitted letters objecting to various procurement strategies
that bundle contracts, and met with procurements official to
express concerns at contracting strategies which led to bundled
contracts.
Section 3(o)(2) of the Act defines the bundling of contract
requirements as:
consolidating 2 or more procurement requirements for
goods or services previously provided or performed
under separate smaller contracts into a solicitation of
offers for a single contract that is likely to be
unsuitable for award to a small-business concern due
to--
(A) the diversity, size, or specialized nature of the
elements of the performance specified;
(B) the aggregate dollar value of the anticipated
award;
(C) the geographical dispersion of the contract
performance sites; or
(D) any combination of the factors described in
subparagraphs (A), (B), and (C).
15 U.S.C. Sec. 632(o)(2).
However, since the Act proceeds to define ``separate
smaller contract'' as ``a contract that has been performed by
one or more small business concerns or was suitable for award
to one or more small business concerns,'' some agencies have
interpreted it as not applying to new construction, since new
construction, by definition, has not previously been performed
by small businesses.\2\
---------------------------------------------------------------------------
\2\Id. at Sec. 632(o)(3).
---------------------------------------------------------------------------
The Act requires each federal department and agency to: (1)
structure contracting requirements to facilitate competition by
and among small business concerns, taking all reasonable steps
to eliminate obstacles to their participation; and (2) avoid
unnecessary and unjustified bundling of contract requirements
that may preclude small business participation in procurements
as prime contractors. However, agencies do not apply these
requirements consistently to new construction work. Likewise,
the Federal Acquisition Regulation (FAR) provisions intended to
protect small businesses from unjustified bundling may not be
included when the contracting officer (CO) is evaluating the
requirement.\3\ In some cases, the Act recognizes that contract
bundling may be more efficient, save money or be necessary in
order to support specific technical, quality, or design
requirements and must be permitted.\4\ Even the President
acknowledges that bundled procurements limit competition and do
not allow small businesses to compete for government business,
so their effect must be mitigated.\5\ Balancing the benefits of
bundling against its disadvantages may be complex, but it needs
to be addressed to ensure small businesses have a fair
opportunity to compete.
---------------------------------------------------------------------------
\3\These include: (1) conducting market research to determine
whether bundling is needed and justified; (2) justifying the
determinations in acquisition strategy documentation that identifies
measurably substantial benefits that meet the statutory and regulatory
requirements; and (3) conferring with SBA representatives on their
acquisition strategies. 48 C.F.R. Sec. Sec. 7.103-105, 8.404,
15.304(c), 16.505(a), and 19.4.
\4\15 U.S.C. Sec. 644(a).
\5\National Economic Council, The Small Business Agenda: Growing
America's Small Businesses to Win the Future 19 (2011) available at
http://www.sba.gov/sites/default/files/
Small%20Business%20Agenda%20NEC.pdf.
---------------------------------------------------------------------------
As currently drafted, the Act uses both the terms
``contract consolidation'' and ``contract bundling'', as well
as placing items relevant to these processes scattered
throughout the Act. This makes understanding this complex topic
more difficult as locating relevant portions is extremely
challenging for both small businesses and contracting officers.
In addition, the use of the words consolidation and bundling
adds an unnecessary degree of obfuscation that simply is
unnecessary.
Given that, this legislation consolidates and revises the
Act to place items related to bundling and consolidation in one
section of the Act. It also removes the term ``consolidation''
to ensure that there is not confusion between the two terms.
Additionally, due to the negative effects bundling can have on
small firms, this legislation aims to provide a stronger
process to appeal unjustified bundling through clarification of
the statutory limits on bundling, the creation of a third party
arbiter, and by increasing transparency in the contracting
process.
IV. Hearings
Issues related to contract bundling were addressed at
multiple hearings held to consider federal government
contracting at both the full and subcommittee levels. One
hearing, conducted by the Subcommittee on Contracting and
Workforce entitled ``Construction Contracting: Barriers to
Small Business Participation'' on February 9, 2012, focused
specifically on contract bundling and consolidation in federal
procurement for construction services.
V. Committee Consideration
The Committee on Small Business met in open session, with a
quorum being present, on March 22, 2012, and ordered H.R. 4081
reported, as amended, to the House by a voice vote at 10:32
a.m. During the markup, one amendment was offered as a complete
substitute and adopted in lieu of H.R. 4081. Disposition of the
amendment is addressed below.
Amendment Number One filed by Mr. Graves (R-MO) offered an
amendment in the form of a substitute. Amendment Number One was
adopted by a voice vote at 10:32 a.m.
Amendment to H.R. 4081
Offered by Mr. Graves of Missouri
Strike all that follows after the enacting clause and insert
the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Contractor Opportunity
Protection Act of 2012''.
SEC. 2. CONSOLIDATION OF PROVISIONS RELATING TO CONTRACT BUNDLING.
Section 44 of the Small Business Act (15 U.S.C. 657q) is
amended to read as follows:
``SEC. 44. CONTRACT BUNDLING.
``(a) Definitions.--In this Act:
``(1) Bundled contract.--The term `bundled
contract'--
``(A) means a contract that is entered into
to meet procurement requirements that are
combined in a bundling of contract
requirements, without regard to whether a study
of the effects of the solicitation on Federal
officers or employees has been made; and
``(B) does not include--
``(i) a contract with an aggregate
dollar value below the dollar
threshold; or
``(ii) a single award contract for
the acquisition of a weapons system
acquired through a major defense
acquisition.
``(2) Bundling methodology.--The term `bundling
methodology' means--
``(A) a solicitation to obtain offers for a
single contract or a multiple award contract;
``(B) a solicitation of offers for the
issuance of a task or a delivery order under an
existing single or multiple award contract; or
``(C) the creation of any new procurement
requirements that permits a combination of
contract requirements, including any
combination of contract requirements or order
requirements.
``(3) Bundling of contract requirements.--The term
`bundling of contract requirements', with respect to
the contract requirements of a Federal agency--
``(A) means the use of any bundling
methodology to satisfy 2 or more procurement
requirements for new or existing goods or
services provided to or performed for the
Federal agency, including any construction
services, that is likely to be unsuitable for
award to a small-business concern due to--
``(i) the diversity, size, or
specialized nature of the elements of
the performance specified;
``(ii) the aggregate dollar value of
the anticipated award;
``(iii) the geographical dispersion
of the contract performance sites; or
``(iv) any combination of the factors
described in clauses (i), (ii), and
(iii); and
``(B) does not include the use of a bundling
methodology for an anticipated award with an
aggregate dollar value below the dollar
threshold.
``(4) Chief acquisition officer.--The term `Chief
Acquisition Officer' means the employee of a Federal
agency designated as the Chief Acquisition Officer for
the Federal agency under section 16(a) of the Office of
Federal Procurement Policy Act (41 U.S.C. 1702(a)).
``(5) Contract.--The term `contract' includes, for
purposes of this section, any task order made pursuant
to an indefinite quantity, indefinite delivery
contract.
``(6) Contract bundling.--The term `contract
bundling' means the process by which a bundled contract
is created.
``(7) Dollar threshold.--The term `dollar threshold'
means--
``(A) in the case of a contract for
construction, $5,000,000; and
``(B) in any other case, $2,000,000.
``(8) Major defense acquisition program.--The term
`major defense acquisition program' has the meaning
given in section 2430(a) of title 10, United States
Code.
``(9) Previously bundled contract.--The term
`previously bundled contract' means a contract that is
the successor to a contract that required a bundling
analysis, contract for which any of the successor
contract were designated as a consolidated contract or
bundled contract in the Federal procurement database,
or a contract for which the Administrator designated
the prior contract as a bundled contract.
``(10) Procurement activity.--The term `procurement
activity' means the Federal agency or office thereof
acquiring goods or services.
``(11) Procurement requirement.--The term
`procurement requirement' means a determination by an
agency that a specified good or service is needed to
satisfy the mission of the agency.
``(12) Senior procurement executive.--The term
`senior procurement executive' means an official
designated under section 16(c) of the Office of Federal
Procurement Policy Act (41 U.S.C. 1702(c)) as the
senior procurement executive for a Federal agency.
``(b) Policy.--The head of each Federal agency shall ensure
that the decisions made by the Federal agency regarding
contract bundling are made with a view to providing small
business concerns with appropriate opportunities to participate
as prime contractors and subcontractors in the procurements of
the Federal agency.
``(c) Contract Bundling.--
``(1) Proposed procurements.--Paragraphs (2) through
(4) shall apply to to a proposed procurement if the
proposed procurement--
``(A) would adversely affect one or more
small business concerns, including the
potential loss of an existing contract;
``(B) includes, in its statement of work,
goods or services--
``(i)(I) currently being performed by
a small business; and
``(II) if the proposed procurement is
in a quantity or estimated dollar value
the magnitude of which renders small
business prime contract participation
unlikely; or
``(ii)(I) that are of a type that the
Administrator through market research
can demonstrate that two or more small
businesses are capable of performing;
and
``(II) if the proposed procurement
would be combined with other
requirements for goods and services;
``(C) is for construction and--
``(i) seeks to package or combine
discrete construction projects; or
``(ii) the value of the goods or
services subject to the contract
exceeds the dollar threshold; or
``(D) is determined by the Administrator to
have a solicitation that involves an
unnecessary or unjustified bundling of contract
requirements.
``(2) Responsibility of the procurement activity.--At
least 45 days prior to the issuance of a solicitation,
the Procurement Activity shall notify and provide a
copy of the proposed procurement to the procurement
center representative assigned to the Procurement
Activity. The 45-day notification process under this
paragraph shall occur concurrently with other
processing steps required prior to issuance of the
solicitation. The notice shall include a statement
setting forth the proposed procurement strategy
required by subsection (e), and--
``(A) explaining why the proposed acquisition
cannot be further divided into reasonably small
lots or discrete tasks in order to permit
offers by small business concerns;
``(B) listing, if applicable, the incumbent
contractors disaggregated by and including
names, addresses, and whether or not the
contractor is a small business concern;
``(C) describing the industries that might be
interested in bidding on the contract
requirements;
``(D) delineating the number of small
business concerns listed in the industry
categories that could be excluded from future
bidding if the contract is a bundled contract,
including any small business bidders that had
bid on previous procurement requirements that
are included in the bundling of contract
requirements;
``(E) delineating the number of existing
small business concerns whose contracts will
cease if the contract bundling proceeds;
``(F) explaining why the delivery schedules
cannot be established on a realistic basis that
will encourage small business participation to
the extent consistent with the actual
requirements of the Government;
``(G) explaining why the proposed acquisition
cannot be offered so as to make small business
participation likely;
``(H) explaining why construction cannot be
procured as separate discrete projects; and
``(I) explaining why the agency has
determined that the bundled contract is
necessary and justified.
``(3) Publication of notice statement.--Concurrently,
the statement required in paragraph (2) shall be
published in the Federal contracting opportunities
database.
``(4) Recompetition of a previously bundled
contract.--If the proposed procurement is a previously
bundled contract, that is to be recompeted as a bundled
contract, the Administrator shall determine, with the
assistance of the agency proposing the procurement--
``(A) the amount of savings and benefits (in
accordance with subsection (d)) achieved under
the bundling of contract requirements;
``(B) whether such savings and benefits will
continue to be realized if the contract remains
bundled, and whether such savings and benefits
would be greater if the procurement
requirements were divided into separate
solicitations suitable for award to small
business concerns;
``(C) the dollar value of subcontracts
awarded to small business concerns under the
bundled contract, disaggregated by North
American Industrial Classification System Code;
``(D) the percentage of subcontract dollars
awarded to small businesses under the bundled
contract, disaggregated by North American
Industrial Classification System Code; and
``(E) the dollar amount and percentage of
prime contract dollars awarded to small
businesses in the primary North American
Industrial Classification System Code for that
bundled contract during each of the two fiscal
years preceding the award of the bundled
contract and during each fiscal year of the
performance of the bundled contract.
``(5) Failure to provide notice.--
``(A) No notification received.--If no
notification of the proposed procurement or
accompanying statement is received, but the
Administrator determines that the proposed
procurement is a proposed procurement described
in paragraph (1), then the Administrator shall
require that such a statement of work be
completed by the Procurement Activity and sent
to the procurement center representative and
postpone the solicitation process for at least
10 days but not more than 45 days to allow the
Administrator to review the statement and make
recommendations as described in this section
before the procurement process is continued.
``(B) No work continued.--If the
Administrator requires a Procurement Activity
to provide a statement of work pursuant to
subparagraph (A), the Procurement Activity
shall not be permitted to continue with the
procurement until such time as the Procurement
Activity complies with the requirements of
subparagraph (A).
``(6) Responsibility of the procurement center
representative.--Within 15 days after receipt of the
proposed procurement and accompanying statement, if the
procurement center representative believes that the
procurement as proposed will render small business
prime contract participation unlikely, the
representative shall recommend to the Procurement
Activity alternative procurement methods which would
increase small business prime contracting
opportunities.
``(7) Disagreement between the administrator and the
procurement activity.--
``(A) In general.--The Administrator may take
action under this paragraph to further the
interests of small businesses if--
``(i) a small business concern would
be adversely affected, directly or
indirectly, by the proposed
procurement, and that small business
concern or a trade association
representing such small business
concern so requests; or
``(ii) if the Administrator
determines that a small business
concern would be adversely affected,
directly or indirectly, by the proposed
procurement.
``(B) Appeal to agency head.--First, the
proposed procurement shall be submitted for
determination to the head of the contracting
agency by the Administrator.
``(C) Failure to agree.--Whenever the
Administrator and the head of the contracting
agency fail to agree--
``(i) the Administrator, within ten
days after such decision, may file an
appeal with the appropriate agency
board of contract appeals;
``(ii) the board shall provide the
Administrator and the head of the
contracting agency the opportunity to
provide their views on the disputed
contract, except that no oral testimony
or oral argument shall be permitted;
``(iii) the board shall permit
interested bidders to intervene; and
``(iv) the board shall render its
decision, which shall be final agency
action for purposes of chapter 7 of
title 5, United States Code, within 30
days after the appeal has been filed.
``(D) Appeal by affected small business
concern to gao.--If the Administrator takes no
action pursuant to subparagraph (C), a small
business concern that would be adversely
affected, directly or indirectly, by the
procurement as proposed, or a trade association
that includes such a small business concern as
a member, may file a protest with the
Government Accountability Office. If the
protest is filed by a trade association, the
trade association shall not be required to
identify a specific member in connection with
the protest.
``(d) Market Research.--
``(1) In general.--Before proceeding with an
acquisition strategy that could lead to bundled
contracts, the head of an agency shall conduct market
research to determine whether bundling of the
requirements is necessary and justified.
``(2) Factors.--For purposes of subsection (c)(1), a
bundled contract is necessary and justified if the
bundling of contract requirements will result in
substantial measurable benefits in excess of those
benefits resulting from a procurement of the contract
requirements that does not involve contract bundling.
``(3) Benefits.--For the purposes of bundling of
contract requirements, benefits described in paragraph
(2) may include the following:
``(A) Cost savings.
``(B) Quality improvements.
``(C) Reduction in acquisition cycle times.
``(D) Better terms and conditions.
``(E) Any other benefits.
``(4) Reduction of costs not determinative.--For
purposes of this subsection:
``(A) Cost savings shall not include any
reduction in the use of military
interdepartmental purchase requests or any
similar transfer funds among Federal agencies
for the use of a contract issued by another
Federal agency.
``(B) The reduction of administrative or
personnel costs alone shall not be a
justification for bundling of contract
requirements unless the cost savings are
expected to be substantial in relation to the
dollar value of the procurement requirements to
be bundled.
``(5) Limitation on acquisition strategy.--The head
of a Federal agency may not carry out an acquisition
strategy that includes bundled contracts valued in
excess of the dollar threshold, unless the senior
procurement executive or, if applicable, Chief
Acquisition Officer, for the Federal agency, certifies
to the head of the Federal agency that steps will be
taken to include small business concerns in the
acquisition strategy prior to the implementation of
such acquisition strategy.
``(e) Strategy Specifications.--If the head of a contracting
agency determines that an acquisition plan or proposed
procurement strategy will result in a bundled contract, the
proposed acquisition plan or procurement strategy shall--
``(1) identify specifically the benefits anticipated
to be derived from the bundling of contract
requirements;
``(2) set forth an assessment of the specific
impediments to participation by small business concerns
as prime contractors that result from the contract
bundling and specify actions designed to maximize small
business participation as subcontractors (including
suppliers) at various tiers under the contract or
contracts that are awarded to meet the requirements;
and
``(3) include a specific determination that the
anticipated measurable benefits of the proposed bundled
contract justify its use.
``(f) Contract Teaming.--In the case of a solicitation of
offers for a bundled contract that is issued by the head of an
agency, a small-business concern may submit an offer that
provides for use of a particular team of subcontractors for the
performance of the contract. The head of the agency shall
evaluate the offer in the same manner as other offers, with due
consideration to the capabilities of all of the proposed
subcontractors. If a small business concern teams under this
paragraph, it shall not affect its status as a small business
concern for any other purpose.
``(g) Database, Analysis, and Annual Report Regarding
Contract Bundling.--
``(1) Database.--Not later than 180 days after the
date of the enactment of this subsection, the
Administrator shall develop and shall thereafter
maintain a database containing data and information
regarding--
``(A) each bundled contract awarded by a
Federal agency; and
``(B) each small business concern that has
been displaced as a prime contractor as a
result of the award of such a contract.
``(2) Analysis.--For each bundled contract that is to
be recompeted, the Administrator shall determine--
``(A) the amount of savings and benefits
realized, in comparison with the savings and
benefits anticipated by the analysis required
under subsection (d) prior to the contract
award; and
``(B) whether such savings and benefits will
continue to be realized if the contract remains
bundled, and whether such savings and benefits
would be greater if the procurement
requirements were divided into separate
solicitations suitable for award to small
business concerns.
``(3) Annual report on contract bundling.--
``(A) In general.--Not later than 1 year
after the date of the enactment of this
paragraph, and annually in March thereafter,
the Administrator shall transmit a report on
contract bundling to the Committee on Small
Business of the House of Representatives and
the Committee on Small Business and
Entrepreneurship of the Senate.
``(B) Contents.--Each report transmitted
under subparagraph (A) shall include--
``(i) data on the number, arranged by
industrial classification, of small
business concerns displaced as prime
contractors as a result of the award of
bundled contracts by Federal agencies;
and
``(ii) a description of the
activities with respect to previously
bundled contracts of each Federal
agency during the preceding year,
including--
``(I) data on the number and
total dollar amount of all
contract requirements that were
bundled; and
``(II) with respect to each
bundled contract, data or
information on--
``(aa) the
justification for the
bundling of contract
requirements;
``(bb) the cost
savings realized by
bundling the contract
requirements over the
life of the contract;
``(cc) the extent to
which maintaining the
bundled status of
contract requirements
is projected to result
in continued cost
savings;
``(dd) the extent to
which the bundling of
contract requirements
complied with the
contracting agency's
small business
subcontracting plan,
including the total
dollar value awarded to
small business concerns
as subcontractors and
the total dollar value
previously awarded to
small business concerns
as prime contractors;
and
``(ee) the impact of
the bundling of
contract requirements
on small business
concerns unable to
compete as prime
contractors for the
consolidated
requirements and on the
industries of such
small business
concerns, including a
description of any
changes to the
proportion of any such
industry that is
composed of small
business concerns.
``(h) Bundling Accountability Measures.--
``(1) Teaming requirements.--Each Federal agency
shall include in each solicitation for any multiple
award contract above the dollar threshold a provision
soliciting bids from any responsible source, including
responsible small business concerns and teams or joint
ventures of small business concerns.
``(2) Policies on reduction of contract bundling.--
``(A) In general.--Not later than 270 days
after the date of enactment of this
subparagraph, the Federal Acquisition
Regulatory Council, established under section
25(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 1302(a)), shall amend the
Federal Acquisition Regulation issued under
section 25 of such Act to--
``(i) establish a Government-wide
policy regarding contract bundling;
``(ii) establish a Government-wide
policy on the solicitation of
contractor teams and joint ventures;
and
``(iii) require that the policies
established under clauses (i) and (ii)
be published on the website of each
Federal agency.
``(B) Rationale for contract bundling.--Not
later than 30 days after the date on which the
head of a Federal agency submits the report
required under section 15(h), the head of the
Federal agency shall publish on the website of
the Federal agency a list and rationale for any
bundled contract for which the Federal agency
solicited bids or that was awarded by the
Federal agency.''.
SEC. 3. REPEAL OF REDUNDANT PROVISIONS.
(a) Certain Provisions Regarding Contract Bundling
Repealed.--Section 15(a) of the Small Business Act (15 U.S.C.
644(a)), is amended by striking ``If a proposed procurement
includes'' and all that follows through ``the matter shall be
submitted for determination to the Secretary or the head of the
appropriate department or agency by the Administrator.''. All
references in law to such sentences as they were in effect on
the date that is 1 day prior to the effective date of this Act
shall be deemed to be references to section 44(d), as added by
this Act.
(b) Certain Provisions Regarding Market Research Repealed.--
Paragraphs (2) through (4) of section 15(e) of the Small
Business Act (15 U.S.C. 644(e)) are repealed. All references in
law to such paragraphs, as in effect on the date that is one
day prior to the effective date of this Act, shall be deemed to
be references to subsections (d) through (f), respectively, of
section 44 of the Small Business Act, as added by this section.
(c) Certain Provisions Regarding Contract Bundling Database
Repealed.--
(1) Paragraph (1) of section 15(p) of the Small
Business Act (15 U.S.C. 644(p)) is repealed.
(2) Paragraphs (2) through (4) of section 15(p) of
the Small Business Act (15 U.S.C 644(p)) are repealed.
All references in law to such paragraphs, as in effect
on the date that is one day prior to the effective date
of this Act, shall be deemed to be references to
paragraphs (1) through (3), respectively, of section
44(h) of the Small Business Act, as added by this Act.
(d) Certain Provisions Regarding Bundling Accountability
Measures Repealed.--Paragraphs (1) and (2) of section 15(q) of
the Small Business Act (15 U.S.C 644(q)) are repealed. All
references in law to such paragraphs, as in effect on the date
that is one day prior to the effective date of this Act, shall
be deemed to be references to paragraphs (1) and (2),
respectively, of section 44(i) of the Small Business Act, as
added by this Act.
(e) Certain Provisions Regarding.--Subsection (o) of section
3 of the Small Business Act (15 U.S.C.) is repealed.
SEC. 4. TECHNICAL AMENDMENTS.
Section 15 of the Small Business Act (15 U.S.C. 644) is
amended--
(1) in the subsection heading of subsection (p), to
read as follows: ``Access to Data.''; and
(2) in the subsection heading of subsection (p), to
read as follows: ``Reports Related to Procurement
Center Representatives.''.
SEC. 5. EXPANSION OF AGENCY'S RESPONSIBILITY.
Section 44(b) of the Small Business Act (15 U.S.C. 657q(b))
is amended by striking ``appropriate'' and inserting ``the
maximum practicable''.
VI. Section-by-Section Analysis of H.R. 4081
SECTION-BY-SECTION ANALYSIS OF H.R. 4081 AS AMENDED
Section 1--Short title
This section provides that the bill may be cited as the
``Contractor Opportunity Protection Act of 2012.''
Section 2--Consolidation of provisions relating to contract bundling
Subsection (a)--Definitions
This subsection amends section 44 of the Act to consolidate
and revise definitions related to contract consolidation and
contract bundling into one section of the Act. Specifically,
the bill removes all definitions related to consolidation and
replaces them with revised definitions of contract bundling to
promote accurate understanding of what contracts should and
should not be included.
Paragraph (1) defines ``bundled contract.'' The revised
definitions exclude contracts related below specified dollar
thresholds and contracts for major defense acquisition
programs. Contracts resulting from studies conducted pursuant
to Office of Management and Budget Circular A-76 are included.
Paragraph (2) defines ``bundling methodology'' or the
process by which bundling occurs. This clarifies that bundling
may occur on: (1) single award contracts and multiple award
contracts; (2) contracts and task orders; and (3) when a new
requirement is included in a solicitation. Previously, bundling
was only considered to occur on previously awarded requirements
contracts and only at the contract level, so this definitional
change will more accurately capture the process.
Paragraph (3) defines ``bundling of contract requirements''
as a procurement that uses a bundling methodology if the
resultant procurement is unsuitable for award to small
businesses. It may be unsuitable due to the value of the
contract, the number of discrete requirements being combined,
the complexity of discrete requirements, the geographic
dispersal of the requirements, or any combination thereof.
Paragraph (4) defines ``Chief Acquisition Officer'' by
assigning it the definition at 41 U.S.C. Sec. 1702(a). Chief
Acquisition Officers (CAOs) are responsible for the acquisition
programs of their respective agencies.
Paragraph (5) defines the term ``contract.'' This clarifies
that for purposes of contracting bundling, a task order issued
on an indefinite delivery, indefinite quantity contract shall
itself be considered a contract.
Paragraph (6) defines ``contract bundling.'' Contract
bundling is the process by which a bundled contract is created.
Paragraph (7) defines the term ``dollar threshold'' used in
paragraph (1). The dollar thresholds specified are $5 million
for construction contracts or $2 million for other contracts.
Paragraph (8) defines ``major defense acquisition
program,'' which is used in paragraph (1). The definition is
taken from 10 U.S.C. Sec. 2430(a).
Paragraph (9) defines a ``previously bundled contract.'' A
previously bundled contract may be the successor to a contract
that required bundling analysis, or for which any of the
successor contracts were designated as a consolidated contract
or bundled contract in the Federal Procurement Data System.
This definition will ensure that as the understanding of
bundling evolves, prior data is not lost.
Paragraph (10) defines ``procurement activity.'' A
procurement activity is an agency or subdivision thereof that
is acquiring goods or services.
Paragraph (11) defines ``procurement requirement.''
Procurement requirements are what are being bundled. Therefore,
H.R. 4081 defines procurement requirements as a determination
by an agency that it needs a good or service. It is expected
that this determination will lead to the eventual purchase of
the good or service.
Paragraph (12) defines ``Senior Procurement Executive,'' by
assigning it the definition at 41 U.S.C. Sec. 1702(c). At
agencies without CAOs, Senior Procurement Executives (SPEs) are
responsible for the acquisition programs of the agency. At
agencies with CAOs, the CAO is either the SPE or supervises the
SPE.
Subsection (b)--I
This subsection amends section 44 of the Act to require
that the head of each Federal agency ensure that decisions made
by the Federal agency requiring contract bundling are made with
a view to providing small business concerns with appropriate
opportunities. This furthers the goal of the Act to provide
small business concerns with the maximum practicable
opportunity to participate in federal contracting.
Subsection (c)--Contract bundling
Subsection (c) of the bill amends section 44 of the Act by:
(1) clarifying when the process needed to bundle contracts
apply; (2) modifies the procedures used to consider bundled
contracts; and (3) establishes more robust dispute resolution
mechanisms concerning bundled contracts. Specifically, this
subsection provides that at least 45 days prior to issuing a
solicitation, a procurement center representative (PCR) be
notified and provided a copy of the proposed procurement.
Previously, the PCR only received 30 days notice. Additionally,
this subsection delineates what content must be provided in a
statement accompanying the notice and that the notice statement
be published in the Federal contracting opportunities database.
This public notice requirement is new, and will allow more
small businesses the chance to be heard on the affects of
proposed bundling. This subsection retains the requirement
that, within 15 days of receiving the proposed procurement
notice, a PCR believing that small businesses will not be able
to compete as prime contractors shall recommend alternative
procurement methods to increase small business prime
contracting opportunities. Further, this section outlines the
steps which must be completed in order to recompete a
previously bundled contract. The SBA Administrator retains the
ability to challenge a bundled contract if the Administrator
believes a small firm would be adversely affected and appeal to
the head of the agency, but a new process is added: if the
Administrator and head of the agency disagree as to the effect
a bundled contract would have on small firms, the Administrator
may now appeal within 10 days to the appropriate Agency's board
of contract appeals and receive a decision within 30 days of
filing the appeal. Finally, this subsection allows small
business concerns, or a trade association that include such a
small business concern as a member, to file a protest with the
Government Accountability Office (GAO) if the SBA Administrator
fails to take action regarding a bundled contract. While small
businesses have the ability to file GAO protests under the
current law, they are rarely considered interested parties.
This will make their appeal rights more fruitful, and allow GAO
and the Boards of Contract Appeals to begin developing
substantive case law regarding justified contract bundling.
Subsection (d)--Market research
This subsection requires that prior to proceeding to an
acquisition strategy that could lead to a bundled contract the
head of an agency shall conduct market research to determine
whether such bundling is necessary and justified. The
provisions of the subsection, for the most part, restate
existing statutory requirements. However, subsection (d) adds a
new limitation on acquisition strategy that prohibits bundled
contracts in excess of the dollar thresholds unless a senior
procurement executive or the federal agency's CAO certifies to
the head of the federal agency that steps will be taken to
include small business concerns.
Subsection (e)--Strategy specifications
This subsection continues to allow the head of the
contracting agency to identify specifically the benefits
anticipated from the bundled contract and set forth an
assessment of the specific impediments to participation by
small business concerns as prime contractors and include a
specific determination of measurable benefits that could
justify the proposed bundled contract. This recodification is
not intended to modify existing practices.
Subsection (f)--Contract teaming
This subsection continues to allow small businesses to
submit an offer that uses a particular team of subcontractors
for the performance of the contract. This recodification is not
intended to modify existing practices.
Subsection (g)--Database, analysis, and annual report
regarding contract bundling
This subsection continues to require the use of database to
record information regarding bundled contracts. For analysis,
this subsection adds requirements that the amount of savings
and benefits realized be compared with the savings and benefits
anticipated by the analysis required prior to the contract
award. Additionally, this subsection would now report the
annual report on contract bundling to be submitted to the House
Small Business Committee and Senate Small Business and
Entrepreneurship Committees.
Subsection (h)--Bundling accountability measures
This subsection continues to allow teaming or joint
ventures by small business concerns for multiple award
contracts above the dollar threshold. Additionally, this
subsection continues to enforce policies promoting the
reduction of contract bundling. This recodification is not
intended to modify existing practices or accountability
measures.
Section 3--Repeal of redundant provisions
This section repeals provisions related to contract
bundling throughout the Small Business Act which, in light of
changes made in this bill, would be redundant or duplicative.
Section 4--Technical amendments
This section amends section 15 of the Small Business Act to
make technical corrections.
Section 5--Expansion of agency's responsibility
This section amends section 44(b) of the Small Business Act
to strike ``appropriate'' and insert ``to the maximum
practicable.'' This will make section 44 consistent with the
rest of the Act. More importantly, it does not allow agencies
to usurp Congress's role by determining that an amount less
than the maximum practicable utilization of small businesses is
appropriate.
VII. Unfunded Mandates
H.R. 4081 contains no intergovernmental or private sector
mandates as defined in the Unfunded Mandates Reform Act, Pub.
L. No. 104-4, and would impose no costs on state, local or
tribal governments.
VIII. New Budget Authority, Entitlement Authority and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement
authority and tax expenditures.
The Committee has not received an estimate of new budget
authority contained in the cost estimate prepared by the
Director of the Congressional Budget Office pursuant to
Sec. 402 of the Congressional Budget Act of 1974. The Committee
recognizes that the clarification of bundling in the Small
Business Act will require additional work be performed by
contracting officers. However, there is no way to estimate what
those costs might be because agencies have generally failed to
comply with extant requirements to analyze bundles. Had
agencies been complying with the Act, it is likely that the
cost incurred to comply with this legislation would be minimal.
IX. Oversight Findings
In accordance with clause 2(b)(1) of rule X of the Rules of
the House, the oversight findings and recommendations of the
Committee on Small Business with respect to the subject matter
contained in H.R. 4081 are incorporated into the descriptive
portions of this report.
X. Statement of Constitutional Authority
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Art. I, Sec. 8, cls. 1, 3, and 18 and Art.
IV, Sec. 3, cl. 2 of the Constitution of the United States.
XI. Congressional Accountability Act
H.R. 4081 does not relate to the terms and conditions of
employment or access to public services or accommodations
within the meaning of Sec. 102(b)(3) of Pub. L. No. 104-1.
XII. Federal Advisory Committee Act Statement
H.R. 4081 does not establish or authorize the establishment
of any new advisory committees as that term is defined in the
Federal Advisory Committee Act, 5 U.S.C. App. 2.
XIII. Statement of No Earmarks
Pursuant to clause 9 of rule XXI, H.R. 4081 does not
contain any congressional earmarks, limited tax benefits or
limited tariff benefits as defined in subsections (d), (e) or
(f) of clause 9 of rule XXI of the Rules of the House.
XIV. Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
H.R. 4081 includes provisions to amend the Small
Business Act to consolidate and revise provisions
related to contract bundling to enhance transparency in
contract bundling and increase federal procurement
opportunities for small business concerns.
XV. Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SMALL BUSINESS ACT
* * * * * * *
Sec. 3. (a) * * *
* * * * * * *
[(o) Definitions of Bundling of Contract Requirements and
Related Terms.--In this Act:
[(1) Bundled contract.--The term ``bundled contract''
means a contract that is entered into to meet
requirements that are consolidated in a bundling of
contract requirements.
[(2) Bundling of contract requirements.--The term
``bundling of contract requirements'' means
consolidating 2 or more procurement requirements for
goods or services previously provided or performed
under separate smaller contracts into a solicitation of
offers for a single contract that is likely to be
unsuitable for award to a small-business concern due
to--
[(A) the diversity, size, or specialized
nature of the elements of the performance
specified;
[(B) the aggregate dollar value of the
anticipated award;
[(C) the geographical dispersion of the
contract performance sites; or
[(D) any combination of the factors described
in subparagraphs (A), (B), and (C).
[(3) Separate smaller contract.--The term ``separate
smaller contract'', with respect to a bundling of
contract requirements, means a contract that has been
performed by 1 or more small business concerns or was
suitable for award to 1 or more small business
concerns.]
* * * * * * *
Sec. 15. (a) To effectuate the purposes of this Act, small-
business concerns within the meaning of this Act shall receive
any award or contract or any part thereof, and be awarded any
contract for the sale of Government property, as to which it is
determined by the Administration and the contracting
procurement or disposal agency (1) to be in the interest of
maintaining or mobilizing the Nation's full productive
capacity, (2) to be in the interest of war or national defense
programs, (3) to be in the interest of assuring that a fair
proportion of the total purchases and contracts for property
and services for the Government in each industry category are
placed with small-business concerns, or (4) to be in the
interest of assuring that a fair proportion of the total sales
of Government property be made to small-business concerns; but
nothing contained in this Act shall be construed to change any
preferences or priorities established by law with respect to
the sale of electrical power or other property by the
Government or any agency thereof. These determinations may be
made for individual awards or contracts or for classes of
awards or contracts. [If a proposed procurement includes in its
statement of work goods or services currently being performed
by a small business, and if the proposed procurement is in a
quantity or estimated dollar value the magnitude of which
renders small business prime contract participation unlikely,
or if a proposed procurement for construction seeks to package
or consolidate discrete construction projects, or the
solicitation involves an unnecessary or unjustified bundling of
contract requirements, as determined by the Administration, the
Procurement Activity shall provide a copy of the proposed
procurement to the Procurement Activity's Small Business
Procurement Center Representative at least 30 days prior to the
solicitation's issuance along with a statement explaining (1)
why the proposed acquisition cannot be divided into reasonably
small lots (not less than economic production runs) to permit
offers on quantities less than the total requirement, (2) why
delivery schedules cannot be established on a realistic basis
that will encourage small business participation to the extent
consistent with the actual requirements of the Government, (3)
why the proposed acquisition cannot be offered so as to make
small business participation likely, (4) why construction
cannot be procured as separate discrete projects, or (5) why
the agency has determined that the bundled contract (as defined
in section 3(o)) is necessary and justified. The thirty-day
notification process shall occur concurrently with other
processing steps required prior to issuance of the
solicitation. Within 15 days after receipt of the proposed
procurement and accompanying statement, if the Procurement
Center Representative believes that the procurement as proposed
will render small business prime contract participation
unlikely, the Representative shall recommend to the Procurement
Activity alternative procurement methods which would increase
small business prime contracting opportunities. Whenever the
Administration and the contracting procurement agency fail to
agree, the matter shall be submitted for determination to the
Secretary or the head of the appropriate department or agency
by the Administrator.] For purposes of clause (3) of the first
sentence of this subsection, an industry category is a discrete
group of similar goods and services. Such groups shall be
determined by the Administration in accordance with the
definition of a ``United States industry'' under the North
American Industry Classification System, as established by the
Office of Management and Budget, except that the Administration
shall limit such an industry category to a greater extent than
provided under such classification codes if the Administration
receives evidence indicating that further segmentation for
purposes of this paragraph is warranted due to special capital
equipment needs or special labor or geographic requirements or
to recognize a new industry. A market for goods or services may
not be segmented under the preceding sentence due to geographic
requirements unless the Government typically designates the
area where work for contracts for such goods or services is to
be performed and Government purchases comprise the major
portion of the entire domestic market for such goods or
services and, due to the fixed location of facilities, high
mobilization costs, or similar economic factors, it is
unreasonable to expect competition from business concerns
located outside of the general areas where such concerns are
located. A contract may not be awarded under this subsection if
the award of the contract would result in a cost to the
awarding agency which exceeds a fair market price.
* * * * * * *
(e) Procurement Strategies; Contract Bundling.--
(1) * * *
[(2) Market research.--
[(A) In general.--Before proceeding with an
acquisition strategy that could lead to a
contract containing consolidated procurement
requirements, the head of an agency shall
conduct market research to determine whether
consolidation of the requirements is necessary
and justified.
[(B) Factors.--For purposes of subparagraph
(A), consolidation of the requirements may be
determined as being necessary and justified if,
as compared to the benefits that would be
derived from contracting to meet those
requirements if not consolidated, the Federal
Government would derive from the consolidation
measurably substantial benefits, including any
combination of benefits that, in combination,
are measurably substantial. Benefits described
in the preceding sentence may include the
following:
[(i) Cost savings.
[(ii) Quality improvements.
[(iii) Reduction in acquisition cycle
times.
[(iv) Better terms and conditions.
[(v) Any other benefits.
[(C) Reduction of costs not determinative.--
The reduction of administrative or personnel
costs alone shall not be a justification for
bundling of contract requirements unless the
cost savings are expected to be substantial in
relation to the dollar value of the procurement
requirements to be consolidated.
[(3) Strategy specifications.--If the head of a
contracting agency determines that a proposed
procurement strategy for a procurement involves a
substantial bundling of contract requirements, the
proposed procurement strategy shall--
[(A) identify specifically the benefits
anticipated to be derived from the bundling of
contract requirements;
[(B) set forth an assessment of the specific
impediments to participation by small business
concerns as prime contractors that result from
the bundling of contract requirements and
specify actions designed to maximize small
business participation as subcontractors
(including suppliers) at various tiers under
the contract or contracts that are awarded to
meet the requirements; and
[(C) include a specific determination that
the anticipated benefits of the proposed
bundled contract justify its use.
[(4) Contract teaming.--In the case of a solicitation
of offers for a bundled contract that is issued by the
head of an agency, a small-business concern may submit
an offer that provides for use of a particular team of
subcontractors for the performance of the contract. The
head of the agency shall evaluate the offer in the same
manner as other offers, with due consideration to the
capabilities of all of the proposed subcontractors. If
a small business concern teams under this paragraph, it
shall not affect its status as a small business concern
for any other purpose.]
* * * * * * *
(p) [Database, Analysis, and Annual Report With Respect to
Bundled Contracts] Access to Data.--
[(1) Bundled contract defined.--In this subsection,
the term ``bundled contract'' has the meaning given
such term in section 3(o)(1).
[(2) Database.--
[(A) In general.--Not later than 180 days
after the date of the enactment of this
subsection, the Administrator of the Small
Business Administration shall develop and shall
thereafter maintain a database containing data
and information regarding--
[(i) each bundled contract awarded by
a Federal agency; and
[(ii) each small business concern
that has been displaced as a prime
contractor as a result of the award of
such a contract.
[(3) Analysis.--For each bundled contract that is to
be recompeted as a bundled contract, the Administrator
shall determine--
[(A) the amount of savings and benefits (in
accordance with subsection (e)) achieved under
the bundling of contract requirements; and
[(B) whether such savings and benefits will
continue to be realized if the contract remains
bundled, and whether such savings and benefits
would be greater if the procurement
requirements were divided into separate
solicitations suitable for award to small
business concerns.
[(4) Annual report on contract bundling.--
[(A) In general.--Not later than 1 year after
the date of the enactment of this paragraph,
and annually in March thereafter, the
Administration shall transmit a report on
contract bundling to the Committees on Small
Business of the House of Representatives and
the Senate.
[(B) Contents.--Each report transmitted under
subparagraph (A) shall include--
[(i) data on the number, arranged by
industrial classification, of small
business concerns displaced as prime
contractors as a result of the award of
bundled contracts by Federal agencies;
and
[(ii) a description of the activities
with respect to previously bundled
contracts of each Federal agency during
the preceding year, including--
[(I) data on the number and
total dollar amount of all
contract requirements that were
bundled; and
[(II) with respect to each
bundled contract, data or
information on--
[(aa) the
justification for the
bundling of contract
requirements;
[(bb) the cost
savings realized by
bundling the contract
requirements over the
life of the contract;
[(cc) the extent to
which maintaining the
bundled status of
contract requirements
is projected to result
in continued cost
savings;
[(dd) the extent to
which the bundling of
contract requirements
complied with the
contracting agency's
small business
subcontracting plan,
including the total
dollar value awarded to
small business concerns
as subcontractors and
the total dollar value
previously awarded to
small business concerns
as prime contractors;
and
[(ee) the impact of
the bundling of
contract requirements
on small business
concerns unable to
compete as prime
contractors for the
consolidated
requirements and on the
industries of such
small business
concerns, including a
description of any
changes to the
proportion of any such
industry that is
composed of small
business concerns.]
* * * * * * *
(q) [Bundling Accountability Measures] Reports Related to
Procurement Center Representatives.--
[(1) Teaming requirements.--Each Federal agency shall
include in each solicitation for any multiple award
contract above the substantial bundling threshold of
the Federal agency a provision soliciting bids from any
responsible source, including responsible small
business concerns and teams or joint ventures of small
business concerns.
[(2) Policies on reduction of contract bundling.--
[(A) In general.--Not later than 1 year after
the date of enactment of this subsection, the
Federal Acquisition Regulatory Council
established under section 25(a) of the Office
of Federal Procurement Policy Act (41 U.S.C.
4219(a)) shall amend the Federal Acquisition
Regulation issued under section 25 of such Act
to--
[(i) establish a Government-wide
policy regarding contract bundling,
including regarding the solicitation of
teaming and joint ventures under
paragraph (1); and
[(ii) require that the policy
established under clause (i) be
published on the website of each
Federal agency.
[(B) Rationale for contract bundling.--Not
later than 30 days after the date on which the
head of a Federal agency submits data
certifications to the Administrator for Federal
Procurement Policy, the head of the Federal
agency shall publish on the website of the
Federal agency a list and rationale for any
bundled contract for which the Federal agency
solicited bids or that was awarded by the
Federal agency.]
* * * * * * *
[SEC. 44. CONSOLIDATION OF CONTRACT REQUIREMENTS.
[(a) Definitions.--In this section--
[(1) the term ``Chief Acquisition Officer'' means the
employee of a Federal agency designated as the Chief
Acquisition Officer for the Federal agency under
section 16(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 414(a));
[(2) the term ``consolidation of contract
requirements'', with respect to contract requirements
of a Federal agency, means a use of a solicitation to
obtain offers for a single contract or a multiple award
contract to satisfy 2 or more requirements of the
Federal agency for goods or services that have been
provided to or performed for the Federal agency under 2
or more separate contracts lower in cost than the total
cost of the contract for which the offers are
solicited; and
[(3) the term ``senior procurement executive'' means
an official designated under section 16(c) of the
Office of Federal Procurement Policy Act (41 U.S.C.
414(c)) as the senior procurement executive for a
Federal agency.
[(b) Policy.--The head of each Federal agency shall ensure
that the decisions made by the Federal agency regarding
consolidation of contract requirements of the Federal agency
are made with a view to providing small business concerns with
appropriate opportunities to participate as prime contractors
and subcontractors in the procurements of the Federal agency.
[(c) Limitation on Use of Acquisition Strategies Involving
Consolidation.--
[(1) In general.--Subject to paragraph (4), the head
of a Federal agency may not carry out an acquisition
strategy that includes a consolidation of contract
requirements of the Federal agency with a total value
of more than $2,000,000, unless the senior procurement
executive or Chief Acquisition Officer for the Federal
agency, before carrying out the acquisition strategy--
[(A) conducts market research;
[(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) certifies to the head of the Federal
agency that steps will be taken to include
small business concerns in the acquisition
strategy.
[(2) Determination that consolidation is necessary
and justified.--
[(A) In general.--A senior procurement
executive or Chief Acquisition Officer may
determine that an acquisition strategy
involving a consolidation of contract
requirements is necessary and justified for the
purposes of paragraph (1)(C) if the benefits of
the acquisition strategy substantially exceed
the benefits of each of the possible
alternative contracting approaches identified
under paragraph (1)(B).
[(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.
[(3) Benefits to be considered.--The benefits
considered for the purposes of paragraphs (1) and (2)
may include cost and, regardless of whether
quantifiable in dollar amounts--
[(A) quality;
[(B) acquisition cycle;
[(C) terms and conditions; and
[(D) any other benefit.
[(4) Department of defense.--
[(A) In general.--The Department of Defense
and each military department shall comply with
this section until after the date described in
subparagraph (C).
[(B) Rule.--After the date described in
subparagraph (C), contracting by the Department
of Defense or a military department shall be
conducted in accordance with section 2382 of
title 10, United States Code.
[(C) Date.--The date described in this
subparagraph is the date on which the
Administrator determines the Department of
Defense or a military department is in
compliance with the Government-wide contracting
goals under section 15.]
SEC. 44. CONTRACT BUNDLING.
(a) Definitions.--In this Act:
(1) Bundled contract.--The term ``bundled
contract''--
(A) means a contract that is entered into to
meet procurement requirements that are combined
in a bundling of contract requirements, without
regard to whether a study of the effects of the
solicitation on Federal officers or employees
has been made; and
(B) does not include--
(i) a contract with an aggregate
dollar value below the dollar
threshold; or
(ii) a single award contract for the
acquisition of a weapons system
acquired through a major defense
acquisition.
(2) Bundling methodology.--The term ``bundling
methodology'' means--
(A) a solicitation to obtain offers for a
single contract or a multiple award contract;
(B) a solicitation of offers for the issuance
of a task or a delivery order under an existing
single or multiple award contract; or
(C) the creation of any new procurement
requirements that permits a combination of
contract requirements, including any
combination of contract requirements or order
requirements.
(3) Bundling of contract requirements.--The term
``bundling of contract requirements'', with respect to
the contract requirements of a Federal agency--
(A) means the use of any bundling methodology
to satisfy 2 or more procurement requirements
for new or existing goods or services provided
to or performed for the Federal agency,
including any construction services, that is
likely to be unsuitable for award to a small-
business concern due to--
(i) the diversity, size, or
specialized nature of the elements of
the performance specified;
(ii) the aggregate dollar value of
the anticipated award;
(iii) the geographical dispersion of
the contract performance sites; or
(iv) any combination of the factors
described in clauses (i), (ii), and
(iii); and
(B) does not include the use of a bundling
methodology for an anticipated award with an
aggregate dollar value below the dollar
threshold.
(4) Chief acquisition officer.--The term ``Chief
Acquisition Officer'' means the employee of a Federal
agency designated as the Chief Acquisition Officer for
the Federal agency under section 16(a) of the Office of
Federal Procurement Policy Act (41 U.S.C. 1702(a)).
(5) Contract.--The term ``contract'' includes, for
purposes of this section, any task order made pursuant
to an indefinite quantity, indefinite delivery
contract.
(6) Contract bundling.--The term ``contract
bundling'' means the process by which a bundled
contract is created.
(7) Dollar threshold.--The term ``dollar threshold''
means--
(A) in the case of a contract for
construction, $5,000,000; and
(B) in any other case, $2,000,000.
(8) Major defense acquisition program.--The term
``major defense acquisition program'' has the meaning
given in section 2430(a) of title 10, United States
Code.
(9) Previously bundled contract.--The term
``previously bundled contract'' means a contract that
is the successor to a contract that required a bundling
analysis, contract for which any of the successor
contract were designated as a consolidated contract or
bundled contract in the Federal procurement database,
or a contract for which the Administrator designated
the prior contract as a bundled contract.
(10) Procurement activity.--The term ``procurement
activity'' means the Federal agency or office thereof
acquiring goods or services.
(11) Procurement requirement.--The term ``procurement
requirement'' means a determination by an agency that a
specified good or service is needed to satisfy the
mission of the agency.
(12) Senior procurement executive.--The term ``senior
procurement executive'' means an official designated
under section 16(c) of the Office of Federal
Procurement Policy Act (41 U.S.C. 1702(c)) as the
senior procurement executive for a Federal agency.
(b) Policy.--The head of each Federal agency shall ensure
that the decisions made by the Federal agency regarding
contract bundling are made with a view to providing small
business concerns with the maximum practicable opportunities to
participate as prime contractors and subcontractors in the
procurements of the Federal agency.
(c) Contract Bundling.--
(1) Proposed procurements.--Paragraphs (2) through
(4) shall apply to to a proposed procurement if the
proposed procurement--
(A) would adversely affect one or more small
business concerns, including the potential loss
of an existing contract;
(B) includes, in its statement of work, goods
or services--
(i)(I) currently being performed by a
small business; and
(II) if the proposed procurement is
in a quantity or estimated dollar value
the magnitude of which renders small
business prime contract participation
unlikely; or
(ii)(I) that are of a type that the
Administrator through market research
can demonstrate that two or more small
businesses are capable of performing;
and
(II) if the proposed procurement
would be combined with other
requirements for goods and services;
(C) is for construction and--
(i) seeks to package or combine
discrete construction projects; or
(ii) the value of the goods or
services subject to the contract
exceeds the dollar threshold; or
(D) is determined by the Administrator to
have a solicitation that involves an
unnecessary or unjustified bundling of contract
requirements.
(2) Responsibility of the procurement activity.--At
least 45 days prior to the issuance of a solicitation,
the Procurement Activity shall notify and provide a
copy of the proposed procurement to the procurement
center representative assigned to the Procurement
Activity. The 45-day notification process under this
paragraph shall occur concurrently with other
processing steps required prior to issuance of the
solicitation. The notice shall include a statement
setting forth the proposed procurement strategy
required by subsection (e), and--
(A) explaining why the proposed acquisition
cannot be further divided into reasonably small
lots or discrete tasks in order to permit
offers by small business concerns;
(B) listing, if applicable, the incumbent
contractors disaggregated by and including
names, addresses, and whether or not the
contractor is a small business concern;
(C) describing the industries that might be
interested in bidding on the contract
requirements;
(D) delineating the number of small business
concerns listed in the industry categories that
could be excluded from future bidding if the
contract is a bundled contract, including any
small business bidders that had bid on previous
procurement requirements that are included in
the bundling of contract requirements;
(E) delineating the number of existing small
business concerns whose contracts will cease if
the contract bundling proceeds;
(F) explaining why the delivery schedules
cannot be established on a realistic basis that
will encourage small business participation to
the extent consistent with the actual
requirements of the Government;
(G) explaining why the proposed acquisition
cannot be offered so as to make small business
participation likely;
(H) explaining why construction cannot be
procured as separate discrete projects; and
(I) explaining why the agency has determined
that the bundled contract is necessary and
justified.
(3) Publication of notice statement.--Concurrently,
the statement required in paragraph (2) shall be
published in the Federal contracting opportunities
database.
(4) Recompetition of a previously bundled contract.--
If the proposed procurement is a previously bundled
contract, that is to be recompeted as a bundled
contract, the Administrator shall determine, with the
assistance of the agency proposing the procurement--
(A) the amount of savings and benefits (in
accordance with subsection (d)) achieved under
the bundling of contract requirements;
(B) whether such savings and benefits will
continue to be realized if the contract remains
bundled, and whether such savings and benefits
would be greater if the procurement
requirements were divided into separate
solicitations suitable for award to small
business concerns;
(C) the dollar value of subcontracts awarded
to small business concerns under the bundled
contract, disaggregated by North American
Industrial Classification System Code;
(D) the percentage of subcontract dollars
awarded to small businesses under the bundled
contract, disaggregated by North American
Industrial Classification System Code; and
(E) the dollar amount and percentage of prime
contract dollars awarded to small businesses in
the primary North American Industrial
Classification System Code for that bundled
contract during each of the two fiscal years
preceding the award of the bundled contract and
during each fiscal year of the performance of
the bundled contract.
(5) Failure to provide notice.--
(A) No notification received.--If no
notification of the proposed procurement or
accompanying statement is received, but the
Administrator determines that the proposed
procurement is a proposed procurement described
in paragraph (1), then the Administrator shall
require that such a statement of work be
completed by the Procurement Activity and sent
to the procurement center representative and
postpone the solicitation process for at least
10 days but not more than 45 days to allow the
Administrator to review the statement and make
recommendations as described in this section
before the procurement process is continued.
(B) No work continued.--If the Administrator
requires a Procurement Activity to provide a
statement of work pursuant to subparagraph (A),
the Procurement Activity shall not be permitted
to continue with the procurement until such
time as the Procurement Activity complies with
the requirements of subparagraph (A).
(6) Responsibility of the procurement center
representative.--Within 15 days after receipt of the
proposed procurement and accompanying statement, if the
procurement center representative believes that the
procurement as proposed will render small business
prime contract participation unlikely, the
representative shall recommend to the Procurement
Activity alternative procurement methods which would
increase small business prime contracting
opportunities.
(7) Disagreement between the administrator and the
procurement activity.--
(A) In general.--The Administrator may take
action under this paragraph to further the
interests of small businesses if--
(i) a small business concern would be
adversely affected, directly or
indirectly, by the proposed
procurement, and that small business
concern or a trade association
representing such small business
concern so requests; or
(ii) if the Administrator determines
that a small business concern would be
adversely affected, directly or
indirectly, by the proposed
procurement.
(B) Appeal to agency head.--First, the
proposed procurement shall be submitted for
determination to the head of the contracting
agency by the Administrator.
(C) Failure to agree.--Whenever the
Administrator and the head of the contracting
agency fail to agree--
(i) the Administrator, within ten
days after such decision, may file an
appeal with the appropriate agency
board of contract appeals;
(ii) the board shall provide the
Administrator and the head of the
contracting agency the opportunity to
provide their views on the disputed
contract, except that no oral testimony
or oral argument shall be permitted;
(iii) the board shall permit
interested bidders to intervene; and
(iv) the board shall render its
decision, which shall be final agency
action for purposes of chapter 7 of
title 5, United States Code, within 30
days after the appeal has been filed.
(D) Appeal by affected small business concern
to gao.--If the Administrator takes no action
pursuant to subparagraph (C), a small business
concern that would be adversely affected,
directly or indirectly, by the procurement as
proposed, or a trade association that includes
such a small business concern as a member, may
file a protest with the Government
Accountability Office. If the protest is filed
by a trade association, the trade association
shall not be required to identify a specific
member in connection with the protest.
(d) Market Research.--
(1) In general.--Before proceeding with an
acquisition strategy that could lead to bundled
contracts, the head of an agency shall conduct market
research to determine whether bundling of the
requirements is necessary and justified.
(2) Factors.--For purposes of subsection (c)(1), a
bundled contract is necessary and justified if the
bundling of contract requirements will result in
substantial measurable benefits in excess of those
benefits resulting from a procurement of the contract
requirements that does not involve contract bundling.
(3) Benefits.--For the purposes of bundling of
contract requirements, benefits described in paragraph
(2) may include the following:
(A) Cost savings.
(B) Quality improvements.
(C) Reduction in acquisition cycle times.
(D) Better terms and conditions.
(E) Any other benefits.
(4) Reduction of costs not determinative.--For
purposes of this subsection:
(A) Cost savings shall not include any
reduction in the use of military
interdepartmental purchase requests or any
similar transfer funds among Federal agencies
for the use of a contract issued by another
Federal agency.
(B) The reduction of administrative or
personnel costs alone shall not be a
justification for bundling of contract
requirements unless the cost savings are
expected to be substantial in relation to the
dollar value of the procurement requirements to
be bundled.
(5) Limitation on acquisition strategy.--The head of
a Federal agency may not carry out an acquisition
strategy that includes bundled contracts valued in
excess of the dollar threshold, unless the senior
procurement executive or, if applicable, Chief
Acquisition Officer, for the Federal agency, certifies
to the head of the Federal agency that steps will be
taken to include small business concerns in the
acquisition strategy prior to the implementation of
such acquisition strategy.
(e) Strategy Specifications.--If the head of a contracting
agency determines that an acquisition plan or proposed
procurement strategy will result in a bundled contract, the
proposed acquisition plan or procurement strategy shall--
(1) identify specifically the benefits anticipated to
be derived from the bundling of contract requirements;
(2) set forth an assessment of the specific
impediments to participation by small business concerns
as prime contractors that result from the contract
bundling and specify actions designed to maximize small
business participation as subcontractors (including
suppliers) at various tiers under the contract or
contracts that are awarded to meet the requirements;
and
(3) include a specific determination that the
anticipated measurable benefits of the proposed bundled
contract justify its use.
(f) Contract Teaming.--In the case of a solicitation of
offers for a bundled contract that is issued by the head of an
agency, a small-business concern may submit an offer that
provides for use of a particular team of subcontractors for the
performance of the contract. The head of the agency shall
evaluate the offer in the same manner as other offers, with due
consideration to the capabilities of all of the proposed
subcontractors. If a small business concern teams under this
paragraph, it shall not affect its status as a small business
concern for any other purpose.
(g) Database, Analysis, and Annual Report Regarding Contract
Bundling.--
(1) Database.--Not later than 180 days after the date
of the enactment of this subsection, the Administrator
shall develop and shall thereafter maintain a database
containing data and information regarding--
(A) each bundled contract awarded by a
Federal agency; and
(B) each small business concern that has been
displaced as a prime contractor as a result of
the award of such a contract.
(2) Analysis.--For each bundled contract that is to
be recompeted, the Administrator shall determine--
(A) the amount of savings and benefits
realized, in comparison with the savings and
benefits anticipated by the analysis required
under subsection (d) prior to the contract
award; and
(B) whether such savings and benefits will
continue to be realized if the contract remains
bundled, and whether such savings and benefits
would be greater if the procurement
requirements were divided into separate
solicitations suitable for award to small
business concerns.
(3) Annual report on contract bundling.--
(A) In general.--Not later than 1 year after
the date of the enactment of this paragraph,
and annually in March thereafter, the
Administrator shall transmit a report on
contract bundling to the Committee on Small
Business of the House of Representatives and
the Committee on Small Business and
Entrepreneurship of the Senate.
(B) Contents.--Each report transmitted under
subparagraph (A) shall include--
(i) data on the number, arranged by
industrial classification, of small
business concerns displaced as prime
contractors as a result of the award of
bundled contracts by Federal agencies;
and
(ii) a description of the activities
with respect to previously bundled
contracts of each Federal agency during
the preceding year, including--
(I) data on the number and
total dollar amount of all
contract requirements that were
bundled; and
(II) with respect to each
bundled contract, data or
information on--
(aa) the
justification for the
bundling of contract
requirements;
(bb) the cost savings
realized by bundling
the contract
requirements over the
life of the contract;
(cc) the extent to
which maintaining the
bundled status of
contract requirements
is projected to result
in continued cost
savings;
(dd) the extent to
which the bundling of
contract requirements
complied with the
contracting agency's
small business
subcontracting plan,
including the total
dollar value awarded to
small business concerns
as subcontractors and
the total dollar value
previously awarded to
small business concerns
as prime contractors;
and
(ee) the impact of
the bundling of
contract requirements
on small business
concerns unable to
compete as prime
contractors for the
consolidated
requirements and on the
industries of such
small business
concerns, including a
description of any
changes to the
proportion of any such
industry that is
composed of small
business concerns.
(h) Bundling Accountability Measures.--
(1) Teaming requirements.--Each Federal agency shall
include in each solicitation for any multiple award
contract above the dollar threshold a provision
soliciting bids from any responsible source, including
responsible small business concerns and teams or joint
ventures of small business concerns.
(2) Policies on reduction of contract bundling.--
(A) In general.--Not later than 270 days
after the date of enactment of this
subparagraph, the Federal Acquisition
Regulatory Council, established under section
25(a) of the Office of Federal Procurement
Policy Act (41 U.S.C. 1302(a)), shall amend the
Federal Acquisition Regulation issued under
section 25 of such Act to--
(i) establish a Government-wide
policy regarding contract bundling;
(ii) establish a Government-wide
policy on the solicitation of
contractor teams and joint ventures;
and
(iii) require that the policies
established under clauses (i) and (ii)
be published on the website of each
Federal agency.
(B) Rationale for contract bundling.--Not
later than 30 days after the date on which the
head of a Federal agency submits the report
required under section 15(h), the head of the
Federal agency shall publish on the website of
the Federal agency a list and rationale for any
bundled contract for which the Federal agency
solicited bids or that was awarded by the
Federal agency.
* * * * * * *