What is the difference between consolidation and bundling

This means that, if the contracting officer is able to obtain offers from at least two small businesses that are competitive as to price and other terms, the contract may only be awarded to a small business.

Such contracts are awarded using "simplified acquisition procedures," such as government-wide commercial purchase cards, purchase orders, blanket purchase agreements, imprest funds, and Standard Form A "set-aside" is a competition in which only small businesses may generally compete. Such contracts are awarded using sealed bidding or contracting by negotiation. When the requirements were not previously provided or performed under separate smaller contracts, or when the resulting solicitation is not "unsuitable" for award to a small business, there is no bundling—and the restrictions on bundling, discussed below, are inapplicable.

Such a situation could arise when the procuring activity's requirements are new ones that have not been previously provided or performed under a government contract, 18 or are "radically different" from previously contracted work. In addition, the Federal Acquisition Regulation FAR exempts contracts awarded or performed entirely outside the United States from the limitations on bundling by excluding such contracts from its definition of "bundling. When the incorporation of multiple requirements into a single solicitation could result in bundling under the previous definition, procuring activities are required to take certain steps before proceeding with the acquisition.

The FAR generally requires that agencies "perform acquisitions planning and conduct market research One such obligation involves conducting market research to determine the "type and extent of foreseeable small business participation in the acquisition" as part of the agency's acquisition planning. The "purpose" of the agency's market research is to determine and document that the bundling is necessary and justified 30 —something which occurs only when the procuring activity would derive "measurably substantial benefits" from the bundled requirements as compared to the benefits to be derived from meeting the requirements in an unbundled acquisition.

Table 1. Source: Congressional Research Service, based on 13 C. A range of benefits may generally be considered in determining whether bundling is necessary and justified, including cost savings, quality improvements, reductions in acquisition cycle times, better contract terms and conditions, and "any other benefits. GAO agreed with the protester on this point. Any bundling whose benefits are not measurably substantial, or which has not been approved by the designated agency official, is "unnecessary and unjustified" and, as such, technically prohibited under the Small Business Act.

Only if the procuring activity erroneously determined that the requirements were not bundled—and thus failed to analyze the benefits of the proposed bundling or obtain approval from the designated agency official—are protesters apparently likely to prevail. See Table 2 below. Table 2. This documentation is to include a determination that the "anticipated benefits of the proposed bundled contract justify its use," as well as:.

Among other things, SBSs are tasked with reviewing agency proposals to modify or dissolve any small business set-aside; providing advice and recommendations on proposed subcontracting plans; and consulting on potential default terminations involving small businesses.

This includes 1 facilitating small business participation as contractors and subcontractors; 2 assisting small businesses in obtaining payments under their contracts, late payment, interest penalties, or information on contractual payment provisions; and 3 cooperating and consulting with the SBA in setting aside contracts for small businesses. PCRs are SBA employees located at federal agencies and procuring activities that have "major contracting programs," where they are responsible for reviewing all acquisitions not set aside for small businesses to determine whether a set-aside is appropriate and to identify alternate strategies to maximize small businesses' participation in government procurement.

When no PCR is assigned to a procuring activity, that activity works with the SBA Office of Government Contracting area office serving the procuring activity's location. See generally 13 C. The alternative strategies generally involve breaking up the procurement into smaller "pieces," which are suitable for award to a small business as separate contracts awarded either on an unrestricted basis or via a set-aside ; as orders under a multiple-award contract either reserved or set-aside ; or as partial set-asides.

In addition to taking the foregoing steps, procuring activities are also required to provide certain notices of bundled and, in some cases, consolidated requirements to the public, incumbent small businesses, and agency and SBA officials who are tasked with assisting in identifying and restructuring bundled requirements.

The required notices are generally to be provided at least 30 days before the issuance of the solicitation, and are intended to permit review of and legal challenges to agency actions by those most likely to be concerned about any bundling. Note, however, that the notices provided to different parties differ somewhat in their content, as discussed below. This requirement applies to all requirements that are not "entirely set-aside" for small businesses pursuant to one of the set-aside programs authorized under the Small Business Act.

The SBS is then tasked with coordinating with the procuring activity and the PCR on all required determinations and findings for bundling and consolidation, discussed below , as well as assisting the procuring activity in identifying alternative strategies that would reduce or minimize the scope of the bundling if the procurement strategy involves "substantial bundling.

Agency OSDBUs and OSBPs are, in turn, tasked with identifying proposed solicitations that involve "significant bundling," 53 and working with agency officials and the SBA to revise the procurement strategy to increase the probability of small business prime contractors through small business teaming arrangements. Separate and apart from this coordination with agency SBSs, at least 30 days prior to the issuance of a solicitation, procuring activities are also required to provide their PCR with a copy of the proposed acquisition strategy, as well as certain other information, if the strategy 1 includes a description of goods or services of a magnitude that likely could not be performed by small businesses; 2 seeks to package or consolidate discrete construction projects; 3 is bundled or substantially bundled; or 4 entails the consolidation of contract requirements discussed below.

What happens next depends upon whether the PCR agrees with the procuring activity's determination that the bundling is necessary and justified. If the PCR agrees that the bundling is necessary and justified, the PCR is to work with the procuring activity to "tailor a strategy that preserves small business prime contract participation to the maximum extent practicable. If the PCR and the contracting officer disagree over whether an acquisition is bundled or substantially bundled, the PCR may appeal to the head of the procuring activity within 2 business days of receiving notice that the contracting officer has rejected his or her recommendation s.

In addition, at least 30 days before issuing a bundled solicitation or placing an order without a solicitation, the procuring activity is to notify any small businesses currently performing the requirements of its intention to bundle the requirements.

Once an incumbent small business has notice of proposed bundling, it could file a bid protest with GAO, the procuring agency, or the Court of Federal Claims 65 challenging the solicitation on the grounds that it would not result in measurably substantial benefits for the agency or, alternatively, has not been approved by the requisite agency personnel.

However, any such protest must be timely, 66 and the protester must have standing. Finally, within 30 days of an agency's certification as to the validity and verification of the data it has entered into the Federal Procurement Data System FPDS , which occurs after the end of a fiscal year, the agency head is required to publish on the agency's Website listings of and rationales for all bundled requirements for which the agency solicited offers or issued an award.

Procuring agencies and the SBA also have other obligations beyond those previously noted. However, unlike the earlier obligations, which are intended primarily to minimize bundling within the context of individual procurements, agencies' other obligations address bundling more generally. Some of the obligations pertain to all procuring agencies including the SBA when it acts as a purchaser of goods and services.

Others pertain only to SBA, as the agency specifically tasked with protecting small businesses' interests in the procurement process. Key among agencies' other obligations are incorporating certain terms in their solicitations, which form the basis for contract awards.

The exact nature of the terms depends upon the facts and circumstances of the procurement, as Table 3 below, illustrates. Table 3. Required Terms as to Bundled Contracts. Justified bundled or consolidated requirements offer a "significant opportunity for subcontracting" Factors that take into account the prospective contractor's proposed subcontracting plan and past performance in subcontracting with small businesses Multiple-award contract whose value exceeds the substantial bundling threshold see Table 2.

Provision soliciting bids from "any responsible source," including "responsible small business concerns and teams or joint ventures of small business concerns". Source: Congressional Research Service, based on 15 U.

In addition, while not required to incorporate such terms expressly in their solicitations, procuring activities are required to accept offers that provide for the use of the team of subcontractors proposed by the offeror in response to a solicitation for a bundled contract.

Other obligations involve reporting regarding bundling policies or practices. Specifically, agency OSDBUs and OSPBs are to produce annual reports for the agency head and the SBA Administrator assessing the extent to which small businesses received their "fair share" of federal procurement dollars; the adequacy of agencies' bundling documentation; and the adequacy of actions taken to mitigate the effects of necessary and justified bundling on small businesses.

The Small Business Act's restrictions on the consolidation of requirements by procuring activities are akin to the Act's restrictions on bundling, although of more recent origin. See Chronology. As defined under the Act, "consolidation" is a broader term than "bundling. Also, as is the case with bundling, "[t]he Small Business Act does not preclude agencies from consolidating requirements.

Only procurements that are encompassed within the Small Business Act's definition of "consolidation" are subject to its restrictions on the consolidation of requirements. This definition provides that. Consolidation of contract requirements, consolidated contract, or consolidated requirement means a solicitation for a single contract or a Multiple Award Contract to:. This definition is broader than the definition of "bundling" in two notable ways.

First, it encompasses requirements that were previously provided or performed by other than small businesses, and not just those previously provided or performed by small businesses or suitable for award to small businesses. The definition of "consolidation" has this reach because it applies to requirements previously provided or performed under "two or more separate contracts," and "separate contract" is defined to mean "a contract or order Certain requirements do, however, fall outside the definition of "consolidation.

When the incorporation of multiple requirements into a single solicitation could result in consolidation under the previous definition, procuring activities are required to take certain steps before proceeding with the acquisition. Table 4. Comparison of Agencies' Obligations as to Bundling and Consolidation.

As Table 4 illustrates, the requirement that procuring activities identify "any negative impact" that the acquisition strategy could have on contracting with small businesses is unique to consolidation—and has been the subject of the only litigation, to date, regarding the Small Business Act's limitations on consolidation.

Neither the Act nor the SBA regulations implementing the Act provide any guidance regarding how a procuring activity is to go about identifying an acquisition strategy's impact on small businesses, or assessing whether such impact is "negative.

Another matter of interest is the impact of potential reduction in sales for small businesses not chosen as an OS3 CLIN [contract line item number] provider.

GSA has considered this potential negative impact on small businesses but has determined the benefits to be gained through OS3 CLINs will outweigh this negative impact. According to the SBA, this statement—consisting of only "two sentences"—was not the "thoughtful and meaningful" analysis that Congress intended as a precursor to consolidation.

GAO, however, took a different view. Unlike the SBA, which had focused upon the legislative history of the restrictions on consolidation and what it viewed as the congressional intent, GAO focused on the text of the Small Business Act.

See also 13 C. Compare 48 C. The definition of "consolidation" given in the Small Business Act does not incorporate the provisions regarding the monetary value of the requirements included in the SBA regulations i.

See 15 U. See generally Dep't of Defense, Gen. See, e. A "procuring activity" is any component of an executive agency with significant acquisition functions that is designated as such by the head of the agency. Both this term and the more general term "agency" are used in this report in referring to components of the federal government that are buying goods or services. However, "procuring activity" is specifically used to distinguish obligations arising at lower levels within an agency from higher-level agency obligations.

For example, requirements could be consolidated without being bundled if they involve construction projects performed at two or more sites. Construction requirements have generally been seen as new requirements and, as such, not encompassed within the definition of "bundling.

CICA generally requires that solicitations contain restrictive provisions and conditions only to the extent "necessary to satisfy the needs of the executive agency. When separate requirements are combined into one solicitation, competition can be restricted because firms that can furnish only a portion of the requirements are excluded.

For this reason, the Government Accountability Office GAO and other bid protest forums require procuring activities to have a "reasonable basis" for any bundling. Provisions of the National Defense Authorization Act for FY once similarly limited "combination" of certain requirements for depot-level maintenance and repair, but were repealed in See P.

Cohen, No. C SC, U. Aircraft Co. For example, unlike CICA's restrictions, the Small Business Act's bundling provisions have no application to arguments by large businesses that discrete portions of consolidated procurements should be broken out for competition. The Small Business Act requires that agencies demonstrate "measurably substantial benefits" in order to justify a bundled procurement.

In contrast, CICA permits solicitations to contain restrictive provisions and conditions only to the extent necessary to satisfy the needs of the agency. Section 15 also requires that agencies set and meet agency-specific goals for the percentage of contract and subcontract dollars awarded to these categories of small businesses.

A "multiple award contract" is a single contract that is awarded to multiple vendors, rather than to a single vendor. Each vendor awarded the contract is generally eligible to be awarded any task or delivery orders issued under the contract.

In contrast, vendors not awarded the contract are generally ineligible for such orders. GAO issued a report on this topic in November Tyler Construction Group v. United States, F. See also Phoenix Scientific Corp. The Small Business Act also defines "separate smaller contract" as a "contract that has been performed by one or more small business concerns or was suitable for award to 1 or more small business concerns," as previously noted.

See supra note 1. GSA has found this consolidation necessary and justified. Consolidation of these requirements will result in an overall substantial benefit estimated at In addition to the significant quantified cost savings, the contract will benefit from increased efficiency, reduced acquisition cycle times, enhanced performance, and better terms and conditions The cost savings and other benefits that will be realized as a result of this consolidated TO outweigh the negative impacts to Small Business SB.

The consolidated TO will maintain legacy production systems that support issuance of passports to U. Consolidation of the requirements will result in substantial benefits estimated at 10 percent.

In addition to the significant quantified cost savings, the contract will benefit from increased efficiency and communication, reduced acquisition cycle times, enhanced performance realizing decreased redundancy, and increased contractor accountability. The cost savings and other benefits that will be realized as a result of this consolidated TO will outweigh the negative impacts to Small Business SB.

GSA found the consolidation necessary and justified. Consolidation of the requirements will result in quantifiable benefits estimated at 1. In addition to the quantified cost savings, GSA will benefit from reduced procurement lead times, a simplified ordering process, and a more efficient process for obtaining security clearances for pre-qualified contractors for long-range resource planning.

The cost savings and other benefits that will be realized as a result of this consolidated contract outweigh any possible negative impacts to small business.

In addition to the significant quantified savings, consolidation will result in the expedited and simplified order processing as well as reduced procurement lead times.

This contract will be set aside for small business. Consolidation of the requirements will result in substantial benefits estimated at 18 percent. The cost savings, efficiency, and improved security posture benefits that will be realized as a result of this consolidated TO will outweigh the negative impacts to Small Business SB.

Consolidation of the requirements will result in substantial cost savings benefits estimated at The consolidation demonstrates quantifiable savings in the form of reduced procurement costs and administrative savings. This consolidation of repair and alteration services maximizes small business opportunities by setting aside the procurement for small business.

In addition to the significant quantified cost savings, the task order will benefit from one set of program deliverables, cross utilization of contractor staffing, and reduced duplication of effort. The cost savings and other benefits that will be realized as a result of this consolidated task order outweigh the negative impacts to small business. The Trojan Strong FoS provides intelligence and dissemination capability across six major task ares of the contract: program management; systems engineering; integration, installation, verification, and validation; operations and maintenance; research and development; and training.

The cost savings and efficiency benefits that will be realized as a result of this consolidated TO will outweigh the negative impacts to Small Business SB. The consolidated solution will benefit the CERDEC by increasing efficiency, reducing acquisition cycle times, enhancing performance, and observing better terms and conditions. The consolidated TO would provide all-source intelligence production that is most commonly produced for leadership and policymakers at the strategic level.

The scope of services include program management; operations and planning; analysis and production; strategic partnering, engagement, and integration; exercise and assessments; mission enabling support; and, surge support. The total estimated benefit was calculated at approximately The estimated benefits exceed the requirement per FAR 7. In addition to the significant quantified cost savings, the contract will have qualitative benefits that include program management efficiencies, reduced likelihood for performance redundancies, and increased opportunity for capitalizing on lessons learned.

Furthermore, in addition to significant cost savings and efficiency benefits, stringent and aggressive small business goals will minimize the impact to small business. In addition to the significant quantified cost savings, the TO will have qualitative benefits that includes increased efficiency, reduced redundancy, better communication, and increased accountability.

The cost savings and efficiency benefits that will be realized as a result of this consolidated Task Order will outweigh the negative impacts to small business. Consolidation of the requirements will result in substantial cost savings benefits estimated at 4. The benefits fall below the requirement per FAR 7. However, the substantial benefits expected support that the procurement is mission critical and maximizes small business participation per FAR 7.

The consolidation demonstrates quantifiable savings in the form of reduced administrative costs and non-quantifiable benefits in the form of improved cycle times, faster responses to emergency repairs, and increased efficiency based on the contractors familiarity with the facilities. This consolidation of construction services for the identified locations is critical to the agency's mission success by providing uninterrupted continuity of operations at the best value for the American taxpayer and maximizes small business opportunities by setting aside the procurement for small business.

In accordance to FAR 2. Consolidation of the requirements will result in quantifiable benefits estimated at 2. At the present time, Region 7 does not have the necessary staff to acquire this project support using a non-consolidated approach, which would negatively impact mission support. These new IDIQ contracts will be set-aside for small businesses, thereby reducing any negative impact to the small business community as a result of this consolidated procurement.

In addition to the significant quantified cost savings, the contract will expedite the ordering process, and facilitate the process of obtaining security clearances for pre-qualified contractors to enable long-range resource planning. The scope of services include program management; operations and planning; intelligence support; defensive cyber operations; plans and policy support; information operations; media relations support; security operations; and logistics support.

In addition to the significant quantified cost savings, the contract will have qualitative benefits from increased efficiency, reduced redundancy, better communication, and increased accountability. The cost savings and efficiency benefits that will be realized as a result of this consolidated order outweigh the negative impacts to small business.

The IDIQ contract would consist of a one-year base period and four 4 one-year option periods, with a total period of performance of five 5 years. The benefits exceed the FAR 7. In addition, there are other benefits including reducing procurement lead times, streamlining the ordering process, and gaining efficiencies in security clearances. Consolidation of the requirements will result in substantial benefits estimated at 9. Although the consolidation does not meet the threshold for substantial benefits per FAR 7.

PBS' mission is to provide effective, mobile, and sustainable workplace solutions for federal agencies, for the benefit of the American Taxpayer. Professional Architect and Engineer IDIQ contract s are key to providing efficient and effective design solutions that enable PBS and its customer Federal Agencies to maintain continuous operational support of Americans.

In addition to the above and quantified cost savings, the contract s will benefit from decreased procurement administrative lead times, reduced risk of delayed projects completions, increased customer satisfaction through expedited delivery, and provide a streamlined ordering process for anticipated and unforeseen needs.

The cost savings and other benefits that will be realized as a result of this consolidated contract s outweigh the potential negative impacts to small business, which are anticipated to be negligible because the IDIQ will be set-aside for small businesses. In addition, the Government reserves the right to further set aside this requirement for specific small business socio-economic categories.

Consolidation of the requirements will result in substantial cost savings benefits estimated at 3. The consolidation demonstrates both quantifiable financial savings in the form of reduced administrative costs and non-quantifiable benefits in the form of improved cycle times, faster responses to emergency repairs, and increased efficiency based on the contractors acquiring familiarity with the facilities.

Consolidation of the requirements will result in cost savings estimated at In addition to the significant quantified cost savings, the contract will benefit from expediting the ordering process, reducing procurement lead times, simplifying the ordering process, and facilitating the process of obtaining security clearances for pre-qualified contractors for long-range resource planning.

The new IDIQ will be set aside for small businesses. In addition, there are various other benefits including: expediting and simplifying the ordering process, reducing procurement lead times, reducing the risk of projects not getting completed, increasing customer satisfaction through expedited delivery, and facilitating the process of obtaining security clearances for pre-qualified contractors and long-range resource planning.

A minimal impact to the small business community is anticipated since the multiple award IDIQ contract will be set-aside for small businesses. The cost savings and other benefits that will be realized as a result of this consolidated contract outweigh the negative impacts to small business. These single agency use contracts will be used to meet the mission requirements for GSA minor repair and alteration projects as well as Federal client tenant improvement projects that are funded by the reimbursable work authorization program.

In addition to the significant quantified savings, consolidation will result in the reduction of the total procurement cost for both Government and Industry through streamlined competitive procedures, reduced one-bid award scenarios, and will encourage the continued development of small business firms in each award pool over a period of five 5 years.

The cost savings that will be realized as a result of this consolidated order outweigh the negative impacts to small business. AAS calculated an estimated total benefit of 9. This percentage is made up of both contract costs saving, Government administrative cost savings, and other savings such as efficiencies related to award to only one contractor. If the consolidated approach is not deemed as the most advantageous option, the non-competitive short term contracts would be necessary based on the lack of procurement time available.

These non-competitive short term contracts, would eliminate small business participation for two of the efforts until the long term competitive procurements could be awarded. AAS intends to avoid this scenario, as it has a negative impact on the small business community.

This consolidation is necessary and justified, as the benefits of consolidation substantially exceeds both the relative benefits of any potential alternative approaches and any negative impact on small businesses. GSA has found the substantial bundling necessary and justified because the Government will benefit through program management efficiencies, reduced likelihood for performance redundancies, and increased opportunity for capitalizing upon lessons learned.

In addition, the anticipated benefits are measurably substantial and exceed 10 percent of the estimated contract value Federal Acquisition Regulation FAR 7.

In addition to significant quantifiable benefits in the form of Government administrative savings, the contracts will benefit from the qualitative benefits of:. The consolidated TO will provide support to the U. Consolidation of the requirements will result in substantial benefits estimated at 6.

In addition to the significant quantified savings, a consolidated TO will benefit from increased efficiency, reduced redundancy, better communication, and increased accountability. Consolidation of the two requirements will result in substantial benefits for the U. SPD support will include contracting for construction services and managing the construction activities from pre-award through contract closeout.

SPD has found the consolidation necessary and justified. The cost savings and other benefits that will be realized as a result of this consolidated order outweigh the negative impact to small business. This determination is issued pursuant to FAR Subpart 7. The benefits exceed the requirements per FAR 7. In addition to the significant quantified cost savings, the contract will benefit from decreased procurement administrative lead times, reduced risk of project completion, increased customer satisfaction through expedited delivery and a streamlined ordering process.