The House Small Business Subcommittee on Regulatory Reform and Oversight held a July 15 hearing to focus attention on the practice of contract bundling and its impact on small businesses. Contract bundling is the practice by a federal department or agency of consolidating several small projects, that would normally be contracted separately, into one single mega-contract that favors large companies.
Last March, the President unveiled his small business agenda, which included several proposals to increase access to federal contracting opportunities for small business. The agenda called on the Office of Management and Budget (OMB) to develop a plan to unbundle federal contracts. The subcommittee heard testimony from representatives of several federal agencies on proposals to eliminate unnecessary contract bundling and efforts to reduce the effects of bundling on small businesses.
Sean Moss of the Department of Transportation told the subcommittee that his Department’s Office of Small and Disadvantaged Business Utilization (DOT/OSDBU) has “consistently demonstrated a high standard of commitment to providing the highest level of customer service available to small, women-owned and disadvantaged businesses.” In the past three years, DOT has awarded over $3.662 billion in contracts to small, women-owned and disadvantaged businesses. That figure represents over 44 percent of DOT’s total contracting dollars.
Mr. Moss testified that, in addition to DOT-awarded contracts, the Department works closely with the Small Business Association and its DOT Procurement Center Representative to coordinate policy direction and develop new initiatives on subcontracting issues. Over the past three years, he said, DOT’s prime contractors have awarded over 50 percent of the subcontracting dollars to small, women-owned and disadvantaged businesses. The Department holds so-called “matchmaking” events in locations across the country, to facilitate meetings between small businesses, prime contractors, and DOT decision-makers. This initiative, Mr. Moss said, “has generated increased awareness of DOT contracting opportunities for small and disadvantaged businesses.”
Ralph Thomas of the National Aeronautics and Space Administration (NASA) OSDBU testified that NASA has been addressing the issue of contract bundling since 1992, and has since developed and implemented policies that have increased prime and subcontract awards to small businesses, including those owned by women and minorities.
“We have increased prime and subcontract dollars going to small businesses from $2.5 billion annually to $3.6 billion annually with essentially the same total contracting budget,” Mr. Thomas said. “We have almost tripled the total prime and subcontract dollars going to minority-owned businesses and more than tripled the total prime and subcontract dollars to women-owned businesses.”
