The anecdotal evidence is everywhere; people believe that government agencies are bundling requirements into large contracts and IDIQs in a way that hurts small businesses. Indeed the proposed Contracting Data and Bundling Accountability Act of 2014 attempts to address this concern. And the SBA seems to agree. In fact, SBA has weighed in against GSA’s bundling of requirements in the protests against GSA’s controversial “OS3” office supplies procurement. (B-409528)
The jurisdictional question and the technical definitions are important here. SBA watches over small business interests, and even has a hotline to report impermissible bundling, but, for the most part, GAO decides protests based on impermissible bundling.
The Small Business Act, defines “Bundling” to mean “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.” See 15 U.S.C. § 632(o)(2). It requires agencies to “avoid unnecessary and unjustified bundling of contract requirements that preclude small business participation in procurements as prime contractors.” 15 U.S.C. § 631(j)(3) (2013).
Agencies are allowed to ‘bundle” and exclude small businesses participation, but they must justify doing so, with market research to determine that bundling was necessary and justified. FAR 7.107(a); 13 C.F.R. 125.2(d)(3). In the OS3 Procurement, GSA performed a bundling analysis which justified full and open competition by mitigating strategies which provide for limited awards to small businesses. SBA finds fault with the justification because it does not examine the negative impact on small businesses necessarily excluded by the acquisition strategy as required by 15 U.S.C. § 657q(c)(l).
GAO’s recent history with bundling cases is interesting. Over the last decade, GAO has sustained a few bundling cases (e.g., TRS Research, B-290644 (2002); Sigmatech, Inc., File: B-296401 (2005)), and rejected many. (See, Star Food Service, Inc. B-408535 (2013); CYIOS, Inc. B-402728.3 (2012); BlueStar Energy Solutions, B-405690 (2011); Nautical Engineering, Inc., B-309955 (2007); MFVega & Associates, LLC, B-291605.3 (2003); 2B Brokers et al., B-298651 (2006); AirTrak Travel et al., B-292101; B-292101.2; B-292101.3; B-292101.4; B-292101.5 (2003)). GAO’s treatment in these cases generally relies on the agency’s bundling analysis, with GAO accepting the agency’s analysis, or finding against the agency where it has failed to conduct one at all.
In the OS3 procurement, GSA conducted an extensive bundling analysis, but SBA has weighed in against it. We’ll be watching for GAO’s decision, and keep you posted.
