Break It Up! Will Congress finally take a swing at contract bundling?

As 2001 wound down, the House and Senate wrestled with aprovision to pin down the Defense Department on the issue ofcontract bundling. The Senate version of the fiscal 2002 Pentagonauthorization bill would require a number of steps before contractsare combined in a package larger than $5 million.

The government's practice of bundling contracts has irkedentrepreneurs for years, and the number of contract consolidationshas shot up as the size of procurement offices has dwindled,leaving fewer acquisition officials to handle more contracts.Current law requires the Defense Department to give smallbusinesses 23 percent of all prime contracts. But the figure infiscal 2000 was 22.3 percent, down from 25.5 percent in fiscal1996.

The Senate's provision states that before small contractscan be consolidated into one contract with a value of more than $5million, the senior procurement official must identify alternativeapproaches involving less consolidation. After studying those, ifthe procurement official still feels consolidation is justified,the he or she must prove it. Reducing the burden on the procurementoffice does not count as a justification for consolidation unlessthe personnel savings are "substantial" in relation tothe total cost of the procurement.