Federal Contract Bundling Increases To The Detriment Of Small Business Bundling At 10-Year High In Fiscal Year 2001

10/2/2002

From: John McDowell of the Small Business Administration 202-205-6941 or john.mcdowell@sba.gov

WASHINGTON, Oct. 2 -- The number and size of bundled contracts issued by federal agencies has reached a 10-year high, to the detriment of small business, according to a new report issued today by the Office of Advocacy of the U.S. Small Business Administration (SBA).

Small businesses received only 16.7 percent of bundled federal contract dollars in fiscal year 2001, and 20 percent of all federal prime contract dollars. At the same time, Office of Advocacy research shows that small businesses employ over half of all private sector workers, generate more than half of the private sector output, and generate more than two-thirds of net new jobs.

"A linchpin of President Bush's small business plan is to ensure that small businesses have full and open competition for government contracts," said Thomas M. Sullivan, Chief Counsel for Advocacy. "This report shows that the long-term rise in contract bundling by federal agencies has inhibited the ability of small and new contractors to bid for, and win, federal contracts," he continued.

The President's small business plan, announced in March, seeks to improve small business access to government contracts by avoiding unnecessary contract bundling, streamlining the contract appeals process, and ensuring that contracts are open to all businesses.

"President Bush has directed his Office of Management and Budget to attack this procurement problem," said Sullivan. "Strong leadership from the top is what it takes to fundamentally alter federal agency behavior. We have identified the problem, this report sets out benchmarks for change, and the President is committed to solving the problem," he said.

The report, "The Impact of Contract Bundling on Small Business" written by Eagle Eye Publishers, indicates that the increase in bundled contracts is largely driven by the addition of dissimilar tasks on existing contracts. The study found that a primary source of these contracts is the Department of Defense.

For more information, visit the Office of Advocacy website at http://www.sba.gov/advo.

------ Created by Congress in 1976, the Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. Appointed by the President and confirmed by the U.S. Senate, the Chief Counsel for Advocacy directs the office. The Chief Counsel advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. Economic research, policy analyses, and small business outreach help identify issues of concern. Regional Advocates and an office in Washington, DC support the Chief Counsel's efforts. For more information on the Office of Advocacy, visit http://www.sba.gov/advo, or call 202-205-6533.