[Federal Register: January 31, 2003 (Volume 68, Number 21)]
[Proposed Rules]
[Page 5133-5138]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31ja03-45]
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Part V
Department of Defense
General Services Administration
National Aeronautics and Space Administration
Small Business Administration
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13 CFR Part 125 and 48 CFR Parts 2, 7, et al.
Small Business Government Contracting Programs; Federal Acquisition
Regulation; Contract Bundling; Proposed Rules
[[Page 5134]]
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SMALL BUSINESS ADMINISTRATION
13 CFR Part 125
RIN: 3245-AF07
Small Business Government Contracting Programs
AGENCY: Small Business Administration (SBA).
ACTION: Proposed rule.
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SUMMARY: The U.S. Small Business Administration (SBA) proposes to amend
its regulations governing small business prime contracting assistance,
to implement the recommendations of the Office of Management and Budget
(OMB) in its report entitled “Contract Bundling, A Strategy for
Increasing Federal Contracting Opportunities for Small Businesses.”
The proposed changes would: revise the definition of bundling to
expressly include multiple award contract vehicles and task and
delivery orders under such contracting vehicles; require procuring
activities to coordinate with the Small Business Specialist (SBS)
proposed acquisition strategies or plans contemplating award of a
contract or order above specified dollar thresholds and require the SBS
to notify the agency Office of Small and Disadvantaged Business
Utilization (OSDBU) when those strategies include contract bundling
that is unnecessary, unjustified, or not identified as such by the
procuring activity; reduce the threshold and revise the documentation
required for “substantial bundling;” require contracting officers to
provide bundling justification documentation to the agency OSDBU when
“substantial bundling” is involved; and require agency OSDBUs to
perform certain oversight functions.
DATES: Comments must be received on or before April 1, 2003.
ADDRESSES: Send Comments to Linda G. Williams, Associate Administrator
for Government Contracting, 409 Third Street, SW., Mail Code 6530,
Washington, DC, 20416, by email to dean.koppel@sba.gov, or by facsimile
to (202) 205-6390. Upon request, SBA will make all public comments
available.
FOR FURTHER INFORMATION CONTACT: Dean Koppel, Assistant Administrator,
Office of Policy and Research, by telephone at (202) 401-8150, or by
email at dean.koppel@sba.gov.
SUPPLEMENTARY INFORMATION:
A. Background
On March 19, 2002, the President unveiled a Small Business Agenda
that proposed several substantive steps toward creating a dynamic
environment where small businesses and entrepreneurs can flourish.
Included in the President's plan were several proposals designed to
improve the access of small businesses to Federal contracting
opportunities. Among other things, the President called upon the Office
of Management and Budget (OMB) to prepare a strategy for unbundling
Federal contracts.
Contract bundling is defined in Section 3(o) of the Small Business
Act to mean the consolidation of two or more requirements for goods and
services into a single procurement that is “unlikely to be suitable
for award to a small business concern.” 15 U.S.C. 632(o). Over the
past decade, the number and size of bundled contracts have increased
sharply and have resulted in a dramatic decline in small business
Federal contracting opportunities.
In response to the President's call for a strategy to unbundle
contracts, the Office of Federal Procurement Policy (OFPP), within OMB,
created an interagency working group to develop a plan for increasing
contracting opportunities for small businesses. As part of the working
group's efforts, OFPP published a notice in the Federal Register
soliciting public comments and held a public meeting on June 14, 2002,
to provide interested parties an opportunity to express their views on
contract bundling. By the end of the comment period, OFPP received 27
public comments and 14 individual presentations at the June 14 public
meeting.
Based on the working group's analysis of available data and
information, including the public comments received in writing and at
the June 14, 2002, public meeting, OMB issued a report in October 2002,
entitled “Contract Bundling: A Strategy for Increasing Federal
Contracting Opportunities for Small Business.” See http://www.acqnet.gov/Notes/contractbundlingreport.pdf
or http://
www.acqnet.gov/). The report cites data indicating that for every 100
“bundled” contracts, 106 individual contracts are no longer available
to small businesses. See OMB Report at 3. The report also notes that
for every $100 awarded on a “bundled” contract, there is a $33
decrease to small businesses. Id.
To address the harmful effects of contract bundling on the Nation's
small businesses, OMB's report offers a 9-point action item plan
designed to hold agencies accountable for eliminating unnecessary
contract bundling and mitigating the effects of necessary contract
bundling. Several of these action items, such as the action items
calling for greater accountability of senior agency management, and for
the collection and dissemination of best practices for maximizing prime
and subcontracting opportunities for small businesses, will be
implemented through separate agency initiatives including OMB, SBA and
agency Offices of Small and Disadvantaged Business Utilization
(OSDBUs).
Other action items, however, require a series of amendments to
SBA's regulations and applicable provisions of the Federal Acquisition
Regulation (FAR), to ensure maximum compliance with current contract
bundling laws. Specifically, to close the loophole that enables
agencies to avoid bundling reviews of consolidated task and delivery
orders, Action Item 3 dictates regulatory changes to expressly require
bundling reviews of multiple award contract vehicles and task and
delivery orders under such procurements. OMB's report notes that there
has been a significant increase in the use of such contracting
vehicles. Since neither the FAR nor SBA's regulations specifically
require bundling reviews of orders under multiple award contracts,
multi-agency contracts, Government-wide Acquisition Contracts and the
General Services Administration (GSA) Multiple Award Schedule Program,
an explicit regulatory amendment mandating such reviews is essential.
Action Item 4 proposes the establishment of agency-specific
acquisition dollar thresholds, within the range of $2 million and $7
million, that would trigger bundling reviews by the agency OSDBU. In
addition, to ensure that agencies explore alternative acquisition
strategies before bundling contracts above those thresholds, Action
Item 5 mandates that when an agency contemplates a bundled procurement
above the established threshold, the agency must identify alternative
acquisition strategies and justify the rationale for selecting a
particular strategy over another that would involve less bundling.
Finally, as a means of mitigating contract bundling determined to
be necessary and justified, Action Item 6 calls for measures to
strengthen compliance with the plans of large business prime
contractors for subcontracting with small businesses. In addition,
Action Item 7 further requires measures to facilitate small business
teams including joint ventures to effectively compete for bundled
contracts. In connection with Action Item 7, the report requires that
SBA determine whether regulatory changes are appropriate to encourage
the
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development of such small business teaming arrangements.
This rule proposes to amend part 125 of SBA's regulations to
implement these specific Action Items. SBA invites comments on this
proposed rule. The proposed amendments were drafted in conjunction with
a companion proposal to amend applicable provisions of the FAR, which
is also published for comment in the Federal Register as a separate
rulemaking action.
B. Section-by-Section Analysis
SBA proposes to amend Sec. 125.2(b) to assign additional
responsibilities to SBA Procurement Center Representatives (PCRs) and
procuring activities in the acquisition planning process. With respect
to PCRs, the proposed rule would revise Sec. 125.2(b)(1) to require
that when a PCR reviews an acquisition not set-aside for small
businesses, the PCR must also identify alternative strategies to
maximize the participation of small businesses in the procurement.
Currently, Sec. 125.2(b)(1) provides only that PCRs must review
acquisitions not set-aside for small businesses to determine whether a
set-aside would be appropriate. This proposed change would further
OMB's general recommendation for the identification of alternative
acquisition strategies to increase small business participation in
procurements.
As required in connection with Action Items 4 and 5 of OMB's
report, the proposed rule would add a new Sec. 125.2(b)(2) to require
bundling reviews of proposed acquisition strategies or plans
contemplating award of a contract or order above specified dollar
thresholds. As proposed, Sec. 125.2(b)(2) would require that if an
agency's contemplated acquisition strategy or plan exceeds the
applicable acquisition threshold established in the proposed Sec.
125.2(b)(2)(i) and is not set-aside for small businesses, the agency
must coordinate the acquisition strategy or plan with the cognizant
Small Business Specialist (SBS). The proposed Sec. 125.2(b)(2) would
also require the SBS to notify the agency OSDBU if the proposed
acquisition strategy or plan includes bundled requirements that the
agency has not identified as bundled or includes unnecessary or
unjustified bundling of requirements. To ensure that the procuring
activity consults the SBS at the earliest practical stage of the
acquisition planning process, the proposed Sec. 125.2(b)(2) would
require the agency to coordinate the acquisition strategy or plan with
the SBS as early in the planning process as practicable, but no later
than 30 days before the issuance of the solicitation.
The acquisition dollar thresholds established in the proposed Sec.
125.2(b)(2)(i) consist of 3 separate agency-specific dollar thresholds:
$7 million or more for the Department of Defense; $5 million or more
for the National Aeronautics and Space Administration, the Department
of Energy and GSA; and $2 million or more for all other agencies. The
dollar amounts of the 3-tier acquisition threshold are based on a
comparative analysis of the number and size of the contracting actions
of the major procuring activities, and are intended to target
contracting actions that would most likely involve contract bundling,
while at the same time, minimize the extent to which the bundling
reviews would disrupt the procurement process of the individual agency.
SBA specifically invites public comment on the proposed 3-tier
acquisition threshold and on alternatives that would best achieve the
intended purposes of Action Items 4 and 5.
Consistent with OMB's Action Item 6 proposal to mitigate the
effects of contract bundling by strengthening compliance with small
business subcontracting plans, the proposed rule would clarify the
language in Sec. 125.2(b)(5)(iii)(C), redesignated as Sec.
125.2(b)(5)(iii)(C), to make clear that as part of their
responsibilities to ensure that small business participation is
maximized through subcontracting opportunities, PCRs may review an
agency's oversight of its subcontracting programs, including its
overall and individual assessment of contractor compliance. As
currently written, the existing Sec. 125.2(b)(5)(iii)(C) suggests that
PCRs need only review an agency's assessment of a contractor's
subcontracting plan compliance under bundled contracts. Based on the
findings of the General Accounting Office (GAO) that agency oversight
of large business compliance with subcontracting plans has been
inconsistent, this proposed change contemplates a more systemic review
of an agency's general oversight as well as its individual assessment
of contractor subcontracting plan compliance to facilitate greater
consistency in agency oversight in the future. See GAO Report, “Small
Business Subcontracting Report Validation Can Be Improved,” GAO-02-
166R Subcontracting Data, December 13, 2001.
The proposed rule would also redesignate Sec. 125.2(b)(7) as Sec.
125.2(b)(8), and revise it to clarify that PCRs must work with the
cognizant SBS and agency OSDBU as early in the acquisition process as
practicable to identify acquisitions involving bundling and to revise
acquisition strategies to increase the probability of small business
participation through small business teams as prime contractors. The
existing Sec. 125.2(b)(7) does not expressly encourage early bundling
reviews and does not specifically require OSDBU involvement. As a
result, this proposed change will not only make early coordination
among the appropriate small business contracting personnel more likely,
but it will also further OMB's call for bundling reviews of proposed
acquisition strategies.
Furthermore, since the proposed Sec. 125.2(b)(8) specifically
requires PCRs, the cognizant SBS and the agency OSDBU to recommend the
restructuring of acquisitions as necessary to increase small business
prime contract participation through small business teams, this
provision also effectuates the recommendation in Action Item 7 for
measures to encourage small business teams and joint ventures to
mitigate the effects of contract bundling.
To implement OMB's Action Item 3 requirement for bundling reviews
of task and delivery orders under multiple award contract vehicles, the
proposed rule would add a new Sec. 125.2(d)(1)(iii) to define a
“single contract” to include: (1) An indefinite quantity contract
awarded to two or more sources under a single solicitation for the same
or similar supplies and services; and (2) an order under a Federal
Supply Schedule contract or a task or delivery order contract awarded
by another agency (i.e., government-wide acquisition contract or multi-
agency contract). This proposed rule would also add a new Sec.
125.2(d)(1)(iv) to define an “order” to mean an order placed under a
Federal Supply Schedule contract or a task or delivery order contract
awarded by another agency. By adding these definitions of a “single
contract” and an “order,” the regulations would make clear that task
and delivery orders under multiple award contract vehicles may fall
within the scope of the definition of contract bundling and are
therefore subject to the applicable requirements for bundling reviews
and justifications.
In an effort to streamline the requirements for reviewing and
justifying bundled requirements, the proposed Sec. 125.2(d)(1)(v)
revises the existing Sec. 125.2(d)(1)(iii) to define “substantial
bundling” as any bundling that meets the dollar amounts specified in
the proposed Sec. 125.2(b)(2)(i). This change will simplify the
application of Sec. 125.2(b)(2)(i) and Sec. 125.2(d)(7), by using the
same dollar thresholds to trigger SBS reviews under the proposed Sec.
125.2(b)(2)(i), and to require supporting documentation for
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substantial bundling under Sec. 125.2(d)(7).
In the nature of a technical amendment, this proposed rule would
revise Sec. 125.2(d)(2) to specify each category of small business
concerns for which the Small Business Act requires agencies to foster
participation in Federal procurements. This rule also proposes
technical amendments to Sec. 125.2(d)(5), to clarify that bundled
orders are subject to the same benefits analysis for demonstrating that
the bundling is necessary and justified.
In keeping with OMB's recommendation in Action Item 5 that agencies
identify alternative acquisition strategies for proposed bundling of
contracts and justify the reason for not selecting an alternative that
would involve less bundling, the proposed rule would add a new Sec.
125.2(d)(7)(i)(E). This section would require that in the event of
substantial bundling, the agency must identify the alternative
strategies that would reduce or minimize the scope of the bundling and
the rationale for not selecting those alternatives. Further, under the
proposed new Sec. 125.2(d)(7)(ii), at least 30 days prior to the
release of a solicitation, the procuring agency would be required to
provide both the PCR and the agency OSDBU a copy of the proposed
acquisition strategy, including the analysis required under Sec.
125.2(b)(3) and (d)(7).
Finally, in connection with OMB's general call for strengthening
OSDBU oversight and greater utilization of their resources, the
proposed rule would add a new Sec. 125.2(e) to impose a new OSDBU
oversight function. Under this proposed Sec. 125.2(e), OSDBUs would be
required to conduct periodic reviews to assess: (1) The extent to which
small businesses are receiving their fair share of Federal
procurements; (2) the adequacy of bundling documentation and
justification; and (3) the adequacy of actions taken to mitigate the
effects of necessary and justified contracting bundling, including the
agency's oversight of large business prime contractor compliance with
their subcontracting plans. OSDBUs would also be required to submit a
copy of their assessment to the Agency Head and SBA Administrator.
C. Compliance With Executive Orders 12866, 12988, and 13132, the
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory
Flexibility Act (5 U.S.C. 601-602)
OMB has determined that this rule is a significant regulatory
action under Executive Order 12866. The proposed rule implements the
recommendations of the OMB report: “Contract Bundling, A Strategy for
Increasing Federal Contracting Opportunities for Small Business.” This
plan is part of the President's initiative for small business growth.
For purposes of Executive Order 12988, SBA has drafted this
proposed rule, to the extent practicable, in accordance with the
standards set forth in section 3 of that Order.
For purposes of Executive Order 13132, SBA has determined that this
proposed rule has no federalism implications warranting the preparation
of a Federalism Assessment.
For purposes of the Paperwork Reduction Act, 44 U.S.C. Ch. 35, SBA
determines that this proposed rule imposes no new reporting or
recordkeeping requirements.
The proposed rule may have a significant beneficial economic impact
on a substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
proposes to implement the recommendations of OMB to increase Federal
contracting opportunities for small businesses. Therefore, an Initial
Regulatory Flexibility Analysis (IRFA) was prepared and is provided
below.
Initial Regulatory Flexibility Analysis
13 CFR Revision--Contract Bundling
The proposed rule may have a significant economic impact on a
substantial number of small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
proposes to implement the recommendations of the Office of Management
and Budget to increase Federal contracting opportunities for small
businesses. Therefore, an Initial Regulatory Flexibility Analysis has
been prepared and is as follows:
1. Reasons for Proposed Rule
This rule proposes to amend 13 Codified Federal Regulation (CFR)
Subpart 125.2 to implement the recommendations of the Office of
Management and Budget (OMB) in its report entitled “Contract Bundling,
A Strategy for Increasing Opportunities for Small Business.” The
proposed CFR changes will: (1) Clarify the definition of “bundling”
to expressly include task and delivery orders placed against Federal
Supply Schedules, Government-wide Acquisition Contracts (GWACs), and
multi-agency contracts when those orders meet the definition; (2)
require procuring activities to coordinate acquisition strategies above
specified dollar thresholds with the Small Business Specialist (SBS)
and require the SBS to notify the agency Office of Small and
Disadvantaged Business Utilization (OSDBU) when those strategies
include contract bundling that is unnecessary, unjustified, or not
identified as such by the procuring activity; (3) reduce the threshold
and revise the documentation required for “substantial bundling;” (4)
require contracting officers to provide bundling justification
documentation to the agency OSDBU when “substantial bundling” is
involved; (5) require agency OSDBUs to perform certain oversight
functions.
The rule is expected to have a positive economic impact on small
prime contractors and subcontractors by providing more Federal
contracting opportunities for small businesses. It imposes no
reporting, recordkeeping, or other compliance requirements. No relevant
Federal rules duplicate, overlap, or conflict with the rule and
currently, there are no practical alternatives that will accomplish the
objectives of this proposed rule.
2. Objectives of and Legal Basis for This Rule
The objective of this proposed rule is to further the
Administration's commitment of creating a Government strategy for
unbundling Federal contracts to increase Federal contracting
opportunities for small business. In order to accomplish the
Administration's commitment, this proposed rule is to provide CFR
coverage implementing the recommendations of the Office of Management
and Budget (OMB) in its report entitled “Contract Bundling, A Strategy
for Increasing Opportunities for Small Business.”
3. Description of and Estimate of the Number of Small Entities to Which
the Rule Will Apply, or an Explanation if Such Estimate Is Not
Available
The proposed rule will indirectly apply to all large and small
entities that seek award of Federal contracts. The rule is expected to
have a positive economic impact on small prime contractors and
subcontractors by providing more Federal contracting opportunities for
small businesses. In the Small Business Administration's 2001 State of
Small Business Report filed with the House and Senate Small Business
Committees, using data obtained from the Federal Procurement Data
Center, the Agency identified only 4 material bundling cases with a
total value of $60 million for the first 3 quarters of Fiscal Year (FY)
2001. This represents 0.0004% of Federal contract
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dollar activity ($60 million divided by $150 billion for the first 3
quarters of the fiscal year). Based on FY 2001 data, the proposed rule
will impact approximately $3 billion in orders placed against Federal
Supply Schedules (FSS), GWACs, and multi-agency contracts. Applying the
contract bundling estimate of 0.0004% to these un-reviewed orders, SBA
expects approximately $1 million will be identified as bundled. This
proposed rule establishes 3 dollar thresholds ranging from $2 million
or more for the majority of civilian agencies to $7 million or more for
the Department of Defense. The dollar amounts are based on a
comparative analysis of the number and size of the contracting actions
of the major procuring activities and are intended to target reviews of
the contracting actions that would most likely involve contract
bundling without unduly disruption the acquisition process of the
individual agency.
4. Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Rule, Including an Estimate of the
Classes of Small Entities Which Will Be Subject to the Requirement and
the Type of Professional Skills Necessary for Preparation of the Report
or Record
The proposed rule imposes no reporting, recordkeeping, or other
compliance requirements.
5. Relevant Federal Rules That May Duplicate, Overlap, or Conflict With
the Rule
None.
6. Description of Any Significant Alternatives to the Proposed Rule
Which Accomplish the Stated Objectives of Applicable Statutes and Which
Minimize the Rule's Economic Impact on Small Entities
Currently, there are no practical alternatives that will accomplish
the objectives of this proposed rule. However, SBA invites alternative
proposals from the public.
List of Subjects in 13 CFR Part 125
Government contracts, Government procurement, Reporting and
Recordkeeping requirements, Small business, Technical assistance.
For the reasons set forth in the preamble, SBA proposes to amend
part 125 of title 13 of the Code of Federal Regulations as follows:
PART 125--GOVERNMENT CONTRACTING PROGRAMS
1. The authority citation for 13 CFR part 125 continues to read as
follows:
Authority: 15 U.S.C. 634(b)(6), 637 and 644; 31 U.S.C. 9701 and
9702.
2. Amend Sec. 125.2 as follows:
a. By revising the heading of paragraph (b);
b. By revising paragraph (b)(1);
c. By redesignating paragraphs (b)(2) through (b)(7) as paragraphs
(b)(3) through (b)(8);
d. By adding paragraph (b)(2);
e. By revising redesignated paragraph (b)(3), introductory text,
(b)(6)(iii), and (b)(8);
f. By revising paragraphs (d)(1)(iii), (d)(2) (i) and (ii),
(d)(5)(i) (A) and (B) and (d)(7), and adding paragraphs (d)(1) (iv) and
(v);
g. By adding paragraph (e).
The revisions and additions to Sec. 125.2 read as follows:
Sec. 125.2 Prime contracting assistance.
* * * * *
(b) Responsibilities in the acquisition planning process. (1) SBA
Procurement Center Representatives (PCRs) are generally located at
Federal agencies and buying activities which have major contracting
programs. PCRs are responsible for reviewing all acquisitions not set-
aside for small businesses to determine whether a set-aside is
appropriate and to identify alternative strategies to maximize the
participation of small businesses in the procurement.
(2) As early in the acquisition planning process as practicable,
but no later than 30 days before the issuance of a solicitation, the
procuring activity must coordinate with the procuring activity's Small
Business Specialist (SBS) when the acquisition strategy contemplates
award of a contract or order meeting the dollar amounts in paragraph
(b)(2)(i) of this section, unless the contract or order is entirely
reserved or set-aside for small business concerns as authorized under
the Small Business Act. The SBS must notify the agency Office of Small
and Disadvantaged Business Utilization (OSDBU) if the strategy or plan
includes bundled requirements that the agency has not identified as
bundled or includes unnecessary or unjustified bundling of
requirements.
(i) The procuring activity must coordinate the acquisition strategy
with the cognizant SBS in accordance with paragraph (b)(2) of this
section if the estimated contract or order value is:
(A) $7 million or more for the Department of Defense;
(B) $5 million or more for the National Aeronautics and Space
Administration, the General Services Administration, and the Department
of Energy; and
(C) $2 million or more for all other agencies.
(3) A procuring activity must provide a copy of a proposed
acquisition strategy (e.g., Department of Defense Form 2579, or
equivalent) to the applicable PCR (or to the SBA Office of Government
Contracting Area Office serving the area in which the buying activity
is located if a PCR is not assigned to the procuring activity) at least
30 days prior to a solicitation's issuance whenever a proposed
acquisition strategy: * * *
* * * * *
(6) * * *
(iii) The PCR will also work to ensure that small business
participation is maximized through teaming arrangements and
subcontracting opportunities. This may include:
(A) Recommending that the solicitation and resultant contract
specifically state the small business subcontracting goals, which are
expected of the contractor awardee;
(B) Recommending that the small business subcontracting goals be
based on total contract dollars instead of subcontract dollars; and
(C) Reviewing an agency's oversight of its subcontracting program,
including its overall and individual assessment of a contractor's
compliance with its small business subcontracting plans. The PCR will
furnish a copy of the information to the SBA Commercial Market
Representative (CMR) servicing the contractor.
* * * * *
(8) PCRs will work with the cognizant SBS and agency OSDBU as early
in the acquisition process as practicable to identify proposed
solicitations that involve bundling, and with the agency acquisition
officials to revise the acquisition strategies for such proposed
solicitations, where appropriate, to increase the probability of
participation by small businesses, including small business contract
teams, as prime contractors. If small business participation as prime
contractors appears unlikely, the SBS and PCR will facilitate small
business participation as subcontractors or suppliers.
* * * * *
(d) * * *
(1) * * *
(iii) Single contract, as used in this definition, includes:
(A) An indefinite quantity contract awarded to two or more sources
under a single solicitation for the same or similar supplies and
services; and
(B) An order placed against an indefinite quantity contract under a
Federal Supply Schedule contract or a
[[Page 5138]]
task or delivery order contract awarded by another agency (i.e.,
Government-wide acquisition contract or multi-agency contract).
(iv) Order means an order placed under:
(A) Federal Supply Schedule contract; or
(B) Task-order contract or delivery-order contract awarded by
another agency, (i.e., Government-wide acquisition contract or multi-
agency contract).
(v) Substantial bundling means any bundling that meets the dollar
amounts specified in paragraph (b)(2)(i) of this section.
(2) * * *
(i) Structure procurement requirements to facilitate competition by
and among small business concerns, including small business concerns
owned and controlled by veterans, small business concerns owned and
controlled by service-disabled veterans, qualified HUBZone small
business concerns, small business concerns owned and controlled by
socially and economically disadvantaged individuals and small business
concerns owned and controlled by women; and
(ii) Avoid unnecessary and unjustified bundling of contract
requirements that inhibits or precludes small business participation in
procurements as prime contractors.
* * * * *
(5) * * *
(i) * * *
(A) Benefits equivalent to 10 percent of the contract or order
value (including options) where the contract or order value is $75
million or less; or
(B) Benefits equivalent to 5 percent of the contract or order value
(including options) or $7.5 million, whichever is greater, where the
contract or order value exceeds $75 million.
* * * * *
(7) Substantial bundling. (i) Where a proposed procurement strategy
involves a substantial bundling of contract requirements, the procuring
agency must, in the documentation of that strategy, include a
determination that the anticipated benefits of the proposed bundled
contract justify its use, and must include, at a minimum:
(A) The analysis for bundled requirements set forth in paragraph
(d)(5)(i) of this section;
(B) An assessment of the specific impediments to participation by
small business concerns as prime contractors that will result from the
substantial bundling;
(C) Actions designed to maximize small business participation as
prime contractors, including provisions that encourage small business
teaming for the substantially bundled requirement;
(D) Actions designed to maximize small business participation as
subcontractors (including suppliers) at any tier under the contract or
contracts that may be awarded to meet the requirements; and
(E) The identification of the alternative strategies that would
reduce or minimize the scope of the bundling, and the rationale for not
choosing those alternatives (i.e., consider the strategies under
paragraphs (b)(6) (i) and (d) of this section).
(ii) At least 30 days prior to the solicitation release, the
procuring activity shall provide the PCR and the agency OSDBU a copy of
the proposed acquisition, including the analysis required by paragraph
(d)(7) of this section, the acquisition plan, any bundling information
required under paragraph (b)(3) of this section, and any other relevant
information. The PCR and agency OSDBU or SBS, as applicable, shall work
together to develop alternative acquisition strategies identified in
paragraph (b)(6) of this section to enhance small business
participation.
* * * * *
(e) OSDBU Oversight Functions. The Agency OSDBU must:
(1) Conduct periodic reviews to assess the:
(i) Extent to which small businesses are receiving their fair share
of Federal procurements, including contract opportunities under
programs administered under the Small Business Act;
(ii) Adequacy of the bundling documentation and justification; and
(iii) Adequacy of actions taken to mitigate the effects of
necessary and justified contract bundling on small businesses (e.g.,
review agency oversight of prime contractor subcontracting plan
compliance under the subcontracting program).
(2) Provide a copy of the assessment under paragraph (e)(1) of this
section to the Agency Head and SBA Administrator.
Dated: January 22, 2003.
Hector V. Barreto,
Administrator.
[FR Doc. 03-2158 Filed 1-30-03; 8:45 am]
BILLING CODE 8025-01-P