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Consolidation and Bundling

Agenda. Business CaseDefine Consolidation

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Consolidation and Bundling

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    1. Consolidation and Bundling Welcome and Introductions:Welcome and Introductions:

    2. Agenda Business Case Define Consolidation & Bundling Impact of Contract Bundling Cause ‘N Effect Effects of Contract Bundling Failure of Act New Strategy Prime Contractor’s Actions Questions

    3. Business Case - Contract Spend Over $200 Billion in Federal Government Awards Per Year 2001: $234.9B (< 23% to SB) 2004: $294.4B (< 23% to SB) New Definitive Contracts (Over $25,000) ALL Companies Small Business 1991: 86,243 26,506 (30.7%) 2001: 34,261 11,651 (34.0%)

    7. What is Consolidation & Bundling ? Small Business Reauthorization Act of 1997 Consolidating two or more procurement requirements for goods and services previously provided or performed under separate, smaller contracts into a solicitation of offers for a single contract that is unlikely suitable for award to a small business concern (Contract Bundling)

    8. Impact of Contract Bundling Reduction in federal supplier base by discouraging or eliminating small businesses Dollars for contracts under existing contracts continue to increase dramatically Reduction in competition

    9. Cause ‘N Effect Decrease Funding Employees Time Training Increase Requirements Checks & Balances Process Quicker/Less Complex

    10. Cause ‘N Effect Unsuitable for Small Business The diversity, size or specialized nature of the elements of performance specified The aggregate dollar value of the anticipated award The geographical dispersion of the performance sites Risk and liability increased

    11. Effects of Contract Bundling For every $100 awarded under a bundled contract There is a $33 decrease to small businesses For every 100 ‘bundled’ contracts 106 individual contracts are no longer available to small businesses Bundled contracts run longer and encompass a greater scope of work Competition is reduced in terms of frequency and the number of opportunities

    12. Act Fails!! Federal Department & Agency Guidelines: Maximize to the extent practicable: Structure requirements to facilitate competition by & among SB Eliminate obstacles Avoid unnecessary & unjustifiable bundling FAR put responsibility on Agency Acquisition Planners

    13. Act Fails!! Prior to Bundling: Conduct Market Research Justify Bundling by Demonstrating “Measurably Substantial Benefits” Cost Savings Quality Improvements Reduction in Acquisition Cycle Times Better Terms and Conditions FAR put responsibility on Contracting Officer

    14. Act Fails!! Why? No Third Party Oversight No reporting requirements Reauthorization Act had wiggle room: Two or more requirements previously competed separately Added new scope to previous competed requirements

    15. New Strategy March 2002 Forces pull together: President Office of Management & Budget Public Objective: Create dynamic environment where SB & Entrepreneurs could flourish Improve SB access for Federal contracting opportunities

    17. President’s Plan I. Ensure accountability of senior agency management for improving contracting opportunities for small business

    18. President’s Plan II. Ensure timely and accurate reporting of contract bundling information through the President’s Management Council

    19. President’s Plan III. Require contract bundling reviews for task and delivery orders under multiple award contract vehicles

    20. President’s Plan IV. Require agency review of proposed acquisitions above specified thresholds for unnecessary and unjustified contract bundling

    21. President’s Plan V. Require alternative acquisition strategies for the proposed bundling of contracts above specified thresholds and written justification when alternatives involving less bundling are not used

    22. President’s Plan VI. Mitigate the effects of contract bundling by strengthening compliance with subcontracting plans

    23. President’s Plan VII. Mitigate the effects of contract bundling by facilitating the development of small business teams and joint ventures

    24. President’s Plan VIII. Identify best practices for maximizing small business opportunities

    25. President’s Plan IX. Dedicate agency’s Offices of Small and Disadvantaged Business Utilization (OSDBUs) to the President’s Small Business Agenda

    26. What About Prime Contractors? Contracts & Procurement Departments need to be involved in acquisition planning Ensure compliance with subcontracting plans Mentoring SB’s

    27. QUESTIONS

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