SMALL BUSINESS 

CONTRACTING

Updated Guidance 

and Reporting Needed 

for Consolidated 

Contracts

Report to Congressional Committees

November 2013

GAO-14-36

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-36, a report to 

congressional committees

November 2013

SMALL BUSINESS CONTRACTING

Updated Guidance and Reporting Needed for 

Consolidated Contracts 

Why GAO Did This Study

Federal agencies sometimes can 

achieve savings by consolidating 

requirements from separate, smaller

contracts into fewer, larger contracts. 

However, consolidation may negatively 

impact small businesses. Generally, 

when consolidation makes a contract 

unsuitable for small businesses, the 

contract is considered bundled, which 

is a subset of consolidation. Agencies 

must justify their actions for both 

consolidated and bundled 

requirements.

Recent National Defense Authorization 

Acts and a related committee report 

mandated that GAO review federal 

agency use of consolidated contracts. 

According to federal procurement data, 

DOD and GSA accounted for the vast 

majority of all contracts reported as 

consolidated in fiscal years 2011 and 

2012. This report examines the extent 

to which (1) DOD and GSA have 

consolidated contracts; (2) DOD and 

GSA justifications complied with 

relevant laws and regulations; (3) 

DOD, GSA, and SBA addressed small 

business impacts as required; and (4) 

SBA collected and reported information 

on bundled contracts. GAO identified 

relevant laws and regulations;

analyzed federal procurement data 

from fiscal years 2011 and 2012;

reviewed consolidated, bundled, and 

other contracts; and interviewed DOD, 

GSA, and SBA officials.

What GAO Recommends

GAO recommends that DOD update 

and GSA establish guidance after SBA 

rulemaking is complete to reflect 

changes in the law and that SBA 

comply with congressional reporting 

requirements for bundled contracts.

DOD, GSA, and SBA concurred with 

the recommendations.

What GAO Found 

The Department of Defense (DOD) and the General Services Administration

(GSA)—which accounted for more than 80 percent of the consolidated contracts 

reported by all federal agencies in fiscal years 2011 and 2012—do not know the 

full extent to which they are awarding consolidated contracts. This is the result of 

contracts being misreported in the federal procurement data system. GAO 

reviewed 157 contracts—more than half of all DOD and GSA contracts that were 

reported as consolidated—and found that 34 percent of the DOD contracts and 

all of the GSA contracts in fact were not consolidated. GAO also identified four 

DOD contracts with consolidated requirements that were not reported as such.

DOD generally justified contracts with consolidated requirements in accordance 

with existing regulations, but DOD and GSA have not yet implemented 2010 

changes in the law. GAO found that 82 percent of the 100 DOD contracts 

confirmed as consolidated followed existing regulations pertaining to conducting 

market research, identifying alternatives, and justifying decisions. Most of the 

contracts that did not comply were justified, but the determinations were not 

made by an official at a level senior enough to meet defense regulation 

requirements. However, DOD regulations and guidance did not reflect the 

reduction in the value at which consolidated contracts must be justified—from 

over $6 million to over $2 million—as called for in the law. In October 2013, DOD 

lowered the dollar threshold. DOD and GSA are waiting for the Small Business 

Administration (SBA) to issue a final rule to implement all of the statutory 

changes before updating regulations. SBA issued a final rule on October 2, 2013,

which takes effect no later than December 31, 2013.

DOD and SBA officials took a range of actions to address the impact of 

consolidation on small business. Federal law requires contracting agencies to 

facilitate the participation of small businesses on consolidated contracts. GAO

found that half of the 100 DOD consolidated contracts reviewed were awarded to 

small businesses, most of which were awarded through small business set 

asides. Additionally, many of the consolidated contracts awarded to large 

businesses included measures, such as small business subcontracting plans, to 

address small businesses that were potentially affected by the consolidation. For 

the consolidated contracts considered to be bundled—for which agencies and 

SBA officials are specifically required to maximize small business contracting 

opportunities—DOD required subcontracting plans as well. 

SBA does not collect complete information on bundled contracts and has not 

reported to congressional committees as required. Federal law requires SBA to 

take several actions for bundled contracts, including annual reporting to the small 

business committees on the extent of bundling, maintaining a database to track 

small business impacts, and determining if benefits were achieved through 

bundling. SBA officials said they have not sent reports to the committees since 

2010 due to an administrative oversight. Further, SBA has not collected all 

required information, such as the number of small businesses affected by 

bundled contracts. SBA officials explained that they cannot fulfill some 

requirements because of limitations in existing data sources, such as the federal 

procurement data system, which do not collect the information needed to meet 

reporting requirements. 

View GAO-14-36. For more information, 

contact William Woods at (202) 512-4841 or 

woodsw@gao.gov.
Page i GAO-14-36 Small Business Contracting 

Letter 1

Background 3

DOD and GSA Do Not Know the Full Extent to Which They Are 

Reporting Consolidated Contracts 8

Most DOD Consolidated Contracts Complied with Existing 

Acquisition Regulations, but Regulations Do Not Reflect 

Changes in the Law 10

DOD and SBA Officials Took Various Actions to Address the 

Impact of Contract Consolidation on Small Businesses 15

SBA Collects Incomplete Information on Bundled Contracts and 

Has Not Reported to Congress as Required 17

Conclusions 18

Recommendations for Executive Action 19

Agency Comments and Our Evaluation 19

Appendix I Objectives, Scope, and Methodology 21

Appendix II Comments from the Department of Defense 25

Appendix III Comments from the General Services Administration 27

Appendix IV Comments from the Small Business Administration 28

Appendix V GAO Contacts and Staff Acknowledgments 30

Tables

Table 1: Definitions of Consolidation and Bundling 4

Table 2: Agency Roles and Responsibilities for Consolidation and 

Bundling 6

Table 3: DOD Compliance with DFARS Requirements for DOD 

Consolidated Contracts and Orders 11

Table 4: Benefit and Cost Savings Described in DOD Consolidated 

Contracts and Orders Reviewed 12

Contents
Page ii GAO-14-36 Small Business Contracting 

Figure

Figure 1: Fiscal Year 2011 and 2012 Consolidated and Bundled 

Contracts Identified and Reviewed 9

Abbreviations

AFARS Army Federal Acquisition Regulation Supplement 

DFARS Defense Federal Acquisition Regulation Supplement 

DOD Department of Defense 

FAR Federal Acquisition Regulation 

FedBizOpps Federal Business Opportunities

FPDS-NG Federal Procurement Data System-Next Generation 

GSA General Services Administration

NDAA National Defense Authorization Act

NAICS North American Industry Classification System

OSDBU Office of Small and Disadvantaged Business Utilization

PCR Procurement Center Representative

SBA Small Business Administration 

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Page 1 GAO-14-36 Small Business Contracting 

441 G St. N.W.

Washington, DC 20548

November 26, 2013

The Honorable Carl Levin

Chairman

The Honorable James M. Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Howard P. “Buck” McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The United States federal government spends in excess of $500 billion 

annually to procure goods and services ranging from information 

technology to construction and base support services. At times, a federal 

agency may consolidate its requirements into one large contract to save 

money and increase efficiency. However, the size and scope of the new 

contract can make it difficult for a small business to win the larger 

contract. When consolidation results in a contract likely to be unsuitable 

for small business award, the consolidated contract is also considered 

bundled. Agencies must justify their actions for both consolidated and 

bundled contracts above certain monetary thresholds and coordinate 

acquisition strategies with agency small business specialists for 

substantially bundled contracts. According to federal procurement data, 

the Department of Defense (DOD) and the General Services 

Administration (GSA) accounted for the vast majority of consolidated 

contracts in fiscal years 2011 and 2012.

The National Defense Authorization Act for Fiscal Year 2013 mandated 

that we review data and information regarding consolidated contracts 

awarded by federal agencies.1

 1

Pub. L. No. 112-239, § 1671.

In addition, the conference report on the 

National Defense Authorization Act for Fiscal Year 2012 mandated that 

we determine the extent to which the DOD consolidated and bundled 
Page 2 GAO-14-36 Small Business Contracting 

contracts with regard to construction and base support services.2

To conduct this work, we reviewed data from the Federal Procurement 

Data System-Next Generation (FPDS-NG), the government’s central 

repository for contracting information, to identify consolidated contracts 

and orders reported by federal agencies, including DOD and GSA, for 

fiscal years 2011 and 2012.

For this 

report, we assessed the extent to which (1) DOD and GSA have 

consolidated contracts; (2) DOD and GSA justifications for contract 

consolidation complied with relevant laws and regulations; (3) DOD, GSA, 

and the Small Business Administration (SBA) addressed small business 

impacts of consolidation, including bundling; and (4) SBA collected and 

reported information on bundled contracts.

3

To determine the extent to which DOD and GSA consolidated contracts, 

we used FPDS-NG data and identified 290 contracts reported by the two 

agencies as consolidated from among the 358 contracts reported as 

consolidated government-wide. From the 290 DOD and GSA contracts, 

we reviewed contract documentation for a total of 157 contracts selected 

as follows: for DOD, we first used a systematic, random sample of all 

reported consolidated contracts for fiscal years 2011 and 2012 to select 

133 contracts for review. We also reviewed all eight DOD contracts that 

were reported as bundled. For GSA, we reviewed all 16 contracts that 

were reported as consolidated over the same time period. We tested the 

FPDS-NG data for accuracy by comparing documentation from the 

contracting offices for the contracts reviewed with information reported in 

FPDS-NG to determine whether the contracts were correctly reported as 

consolidated or bundled. We determined that FPDS-NG data were not 

sufficiently reliable for purposes of identifying consolidated and bundled 

contracts due to errors in reporting information to FPDS-NG, but that 

supporting contract documentation could be used to determine whether 

contracts were consolidated or bundled. We also reviewed a sample of 

DOD contracts that were not identified as consolidated in FPDS-NG for 

The Federal Acquisition Regulation (FAR) 

requires agencies to report contract information in FPDS-NG, which has 

data fields that separately identify contracts that are considered 

consolidated or bundled. We chose fiscal years 2011 and 2012 to capture 

the two most recent years of data available at the time of our review.

 2

H.R. Rep. No. 112-329, at 675 (2011) (Conf. Rep.).

3

An order refers to an individual delivery order for supplies or task order for services 

placed against an established indefinite delivery, indefinite quantity contract. 
Page 3 GAO-14-36 Small Business Contracting 

any indication of potential consolidation or bundling. Through this 

approach, we identified one bundled and three consolidated contracts 

that were not reported as such in FPDS-NG. Overall, we confirmed 100 

consolidated contracts, including two that were also bundled.

To determine the extent to which justifications for contract consolidation 

complied with relevant laws and regulations, we compared contract 

documents with the requirements established by federal statutes such as 

the Small Business Act, federal regulations such as SBA regulations, the 

FAR and agency FAR supplements, including the Defense Federal 

Acquisition Regulation Supplement (DFARS) and the Army Federal 

Acquisition Regulation Supplement (AFARS).

To assess the extent to which DOD, GSA, and SBA addressed potential 

small business impacts of consolidation and bundling, we reviewed 

FPDS-NG data and contract documentation to identify whether contracts 

were awarded to large or small businesses. We interviewed officials from 

DOD and GSA office of small business programs, DOD service-level 

contracting officials, and SBA officials to understand how small business 

impacts are addressed. We also reviewed consolidated contracts with 

requirements that were previously performed by small businesses and 

identified steps taken to address the potential impacts.

To assess the extent to which SBA collected and reported information on 

consolidated contracts that are considered bundled, we reviewed reports 

SBA submitted to Congress. We also interviewed SBA officials to 

understand how information is reported. See appendix I for a full 

description of our scope and methodology.

We conducted this performance audit from December 2012 to November 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

Contract consolidation generally occurs when a federal agency combines 

in a solicitation two or more contract requirements that were previously 

provided to that agency under separate contracts. Agencies may achieve 

savings and other benefits through contract consolidation, but 

consolidation may limit small business opportunities to compete for 

Background
Page 4 GAO-14-36 Small Business Contracting 

federal contracts. A specific type of contract consolidation, known as 

bundling, has a more significant effect on small businesses’ ability to 

perform the consolidated contract. Bundling generally takes place when 

two or more requirements that were previously performed by small 

businesses are combined into a single solicitation and result in a contract 

that is likely to be unsuitable for small business award. Table 1 

summarizes the definitions of consolidation and bundling. 

Table 1: Definitions of Consolidation and Bundling

Consolidation Bundling

Use of a solicitation to obtain offers for a 

single contract or multiple award contract 

to satisfy (1) two or more requirements of 

the federal agency for goods or services 

that previously have been provided to or 

performed for the federal agency under 

two or more separate contracts lower in 

costs than the total cost of the contract 

for which the offers are solicited; or (2) 

requirements of the federal agency for 

construction projects to be performed at 

two or more discrete sites. 

Consolidating two or more requirements for 

goods or services previously provided or 

performed under separate smaller 

contractsa

• the diversity, size, or specialized 

nature of the elements of the 

performance specified;

into a solicitation for a single 

contract that is likely to be unsuitable for 

award to a small business concern due to:

• the aggregate dollar value of the 

anticipated award;

• the geographical dispersion of contract 

performance sites; or

• any combination of these factors.

Source: GAO analysis of Small Business Act provisions 15 U.S.C. §657q(a)(2) and 15 U.S.C. §632(o)(2).

a

To foster small business participation in federal contracting, Congress

has required agencies to take various actions to justify the use of 

consolidated and bundled contracts. The Small Business Act was 

amended in 1997 to restrict federal agencies from bundling contracts 

without first taking certain steps, including conducting market research 

and demonstrating specific cost savings.

A separate smaller contract means a contract that has been performed by one or more small 

business concerns or that was suitable for award to a small business. See 15 U.S.C. §632(o)(3).

4

 4

Small Business Reauthorization Act of 1997, Pub. L. No. 105-135, § 413, amending 

section 15 of the Small Business Act.

Congress first enacted 

consolidation of contract requirements in the National Defense 

Authorization Act for Fiscal Year 2004, but only for DOD, which was 

required to conduct market research, identify any alternative approaches 

that would involve a lesser degree of consolidation of contract 

requirements, and determine that the consolidation of contracts valued 
Page 5 GAO-14-36 Small Business Contracting 

over $5 million (later increased in 2010 to $6 million), was necessary and 

justified.5

Congress enacted the Small Business Jobs Act of 2010 (Jobs Act), which 

amended the Small Business Act to require that all federal agencies 

justify their consolidation of contract requirements with expected values 

greater than $2 million, thereby lowering the dollar threshold for DOD 

unless it met small business goals and requiring for the first time a 

justification for all federal civilian agencies.

DOD could determine that an acquisition strategy was 

necessary and justified if the benefits of consolidation substantially 

exceed the benefits of alternative approaches.

6 The amendments also added 

new requirements for agencies to identify any negative impacts that 

consolidation could have on small businesses and certify that steps would 

be taken to include small businesses in the acquisition strategy. The 2010 

amendments also included additional requirements for bundled contracts, 

such as requiring agencies to publicly post the rationales for each 

bundled contract on their websites. The National Defense Authorization 

Act for Fiscal Year 2013 later repealed a provision that tied the DOD 

dollar threshold to its achievement of small business goals, and required 

DOD to review consolidated contracts with expected values of over $2 

million.7

In addition to the requirements for agencies to justify their consolidated 

and bundled contracts, federal law and regulations outline specific 

responsibilities for agencies’ small business officials and the SBA in 

addressing small business issues, particularly when bundling is involved.

Table 2 below lists agency and SBA responsibilities for consolidated and 

bundled contracts. 

 5

National Defense Authorization Act for Fiscal Year 2004, Pub. L. No. 108-136, §801(a)(1) 

(2003).

6

Small Business Jobs Act of 2010, Pub. L. No. 111-240, § 1313. The Jobs Act required 

the over $2 million threshold for DOD only until SBA determined that DOD complied with 

the Small Business Act’s government-wide contracting goals; if it made this determination, 

then the previous statutory threshold of greater than $6 million applied to DOD. 7

Pub. L. No. 112-239, § 1671(c).
Page 6 GAO-14-36 Small Business Contracting 

Table 2: Agency Roles and Responsibilities for Consolidation and Bundling

Consolidation Bundling

Agency Contracting 

Activity

• Conduct market research.

• Identify alternative contracting 

approaches with lesser degree of 

consolidation.

• Make a written determination 

from the senior procurement 

executive that consolidation is 

necessary and justified.

• Identify any negative impact of 

consolidation on contracting with 

small business concerns.

• Certify that steps will be taken to 

include small business concerns.

• Conduct market research to determine if bundling is necessary 

and justified, which is indicated if the agency can derive 

measurably substantial benefits. Benefits must be equivalent to:

• 10% of the estimated value if contract is $94 million or 

less; or

• The greater of $9.4 million or 5% of the estimated value if 

contract is greater than $94 million.

• For substantially bundled contracts—those $8 million or more in 

value for DOD and $6 million or more for GSA—ensure the 

acquisition strategy addresses additional elements including an 

assessment of the specific impediments to small business 

participation.

• Provide agency small business offices and SBA procurement 

center representatives with a copy of the proposed bundled 

acquisition, among other things, 30 days prior to the 

solicitation’s issuance.

• Identify incumbent contracts and contractors affected by the 

bundling.

• Generally, 30 days before solicitation issuance, agencies must 

notify affected incumbent small businesses of the intent to 

bundle the requirements and should notify them on how they 

may contact the appropriate SBA representative.

• Agencies are required to list on agency websites bundled 

contracts solicited and awarded and include the rationales.

Agency Small 

Business Offices

• (For DOD only) The Office of 

Small Business Programs must 

conduct annual reviews to assess 

the extent of the contract 

requirements’ consolidation, 

including the impacts of those 

consolidations on the availability 

of small business concerns to 

participate as both contractors 

and subcontractors. 

a

• The small business specialist must notify the agency OSDBU if 

the acquisition strategy involves bundling that is unnecessary, 

unjustified, or not identified by the agency as bundled.

• For substantial bundling, agency coordinates acquisition 

strategy with small business specialist when the contract or 

order meets certain dollar thresholds (described above).

• OSDBU must identify solicitations with significant bundling, and 

work with agency and SBA to revise procurement strategies for 

those solicitations to facilitate small business participation as 

prime contractors.

• Report annually to the Agency Head and SBA Administrator on 

adequacy of agency bundling documentation and justification 

and adequacy of the steps taken to mitigate the effects of 

necessary and justified bundling on small businesses. 
Page 7 GAO-14-36 Small Business Contracting 

Consolidation Bundling

Small Business 

Administration

• Not applicable • SBA procurement center representatives (PCRs):

• Work with cognizant small business specialists and 

agency OSDBU early in the acquisition process to identify 

proposed solicitations that involve bundling, to revise the 

bundling, where appropriate, and to increase the 

probability of small business participation.

• If PCR believes agency’s bundling decision will render 

small business participation unlikely, the PCR may 

propose alternative procurement methods to the agency;

if SBA and the agency fail to agree, SBA may submit 

agencies’ bundling determinations to the Secretary or 

head of the agency.

• SBA responsibilities include:

• Maintaining a database on bundled contracts and small 

businesses that have been displaced as prime contractors 

due to the bundled contracts.

• Reviewing savings and benefits achieved under bundled 

contracts that are recompeted as bundled contracts and 

whether they will continue to be realized.

• Reporting annually on contract bundling information to 

Senate and House Committees on Small Business.

Sources: GAO analysis of Small Business Act, as amended, and Federal Acquisition Regulation.

a

SBA has additional statutory responsibilities for bundled contracts, 

including maintaining a database on bundled contracts, reviewing savings 

and benefits of bundled contracts that are re-competed as bundled 

contracts, and reporting to the small business Congressional committees 

annually on contract bundling and its impact on small businesses. While 

various actors are engaged in the contracting process, ultimately, the 

contracting agencies make the final decisions to consolidate 

requirements.

The Small Business Act established an Office of Small and Disadvantaged Business Utilization 

(OSDBU) in each federal agency with procurement powers. The office is referred to as the Office of 

Small Business Programs in DOD and its components and the Office of Small Business Utilization at 

GSA.
Page 8 GAO-14-36 Small Business Contracting 

DOD and GSA accounted for more than 80 percent of the reported 

consolidated contracts in fiscal years 2011 and 2012, but DOD and GSA 

overstated their use of consolidated contracts in those two years. In turn, 

because these agencies account for such a high percentage of all 

contracts reported as consolidated, government-wide reporting on 

contract consolidation is not reliable. In our sample of 157 DOD and GSA 

contracts that were identified as consolidated in FPDS-NG, we found and 

agency officials confirmed that approximately 34 percent of the DOD 

contracts and all of the GSA contracts were miscoded and in fact were 

not consolidated. We also identified four consolidated DOD contracts, 

including one that was also bundled, that were not reported as such in 

FPDS-NG.

In fiscal years 2011 and 2012, federal agencies reported that they had 

awarded 358 consolidated contracts and orders under contracts 

government-wide, with total obligations of approximately $3.58 billion for 

goods and services ranging from information technology to construction 

and base support services. We reviewed a sample of 157 contracts and 

orders from DOD and GSA and found that 48 DOD contracts and all 16 

GSA contracts were miscoded as consolidated in FPDS-NG. Figure 1 

shows the details of this analysis.

DOD and GSA Do Not 

Know the Full Extent 

to Which They Are 

Reporting 

Consolidated 

Contracts
Page 9 GAO-14-36 Small Business Contracting 

Figure 1: Fiscal Year 2011 and 2012 Consolidated and Bundled Contracts Identified 

and Reviewed

a

DOD and GSA officials generally attributed the data entry errors to 

miscoding that was discovered when we requested contract 

documentation related to consolidated contracts. In most cases, the 

contracts should not have been reported as either consolidated or 

bundled in FPDS-NG. After being made aware of the errors, most DOD 

and GSA officials submitted corrected data to FPDS-NG.

This includes 3 contracts that were miscoded as bundled in FPDS-NG but were later confirmed to be 

consolidated and were reviewed as such.

In addition to contracts that were over-reported in FPDS-NG, we identified 

four consolidated contracts, including one that was also bundled, that 

were not reported as such in FPDS-NG. The contracts were identified 

through various sources, including the Federal Business Opportunities 
Page 10 GAO-14-36 Small Business Contracting 

(FedBizOpps) website and task orders associated with contracts 

identified as consolidated in FPDS-NG, and our review of eight DOD 

contracts that were not identified as consolidated in FPDS-NG.8

Most of the 100 DOD contracts from fiscal years 2011 and 2012 that we 

identified as consolidated complied with existing acquisition regulations 

by justifying the need to consolidate contract requirements over $6 

million. Most of the contracts that did not comply were justified, but the 

determinations were not made by an official at a level senior enough to 

meet defense regulation requirements. In fiscal years 2011 and 2012, 

existing DOD regulations also did not fully reflect the 2010 changes in the 

law, including those that lowered the dollar amount at which DOD 

consolidations must be justified from over $6 million to over $2 million if 

DOD failed to meet small business goals and required the agencies to 

identify small business impacts. In addition, GSA had not amended its 

regulations for identifying and justifying consolidated contract 

requirements because it was waiting for SBA regulations implementing 

the consolidation provisions to be finalized. SBA issued the regulations in 

October 2013.

DOD 

officials confirmed that four contracts were consolidated, but were 

generally unsure why they had been miscoded in FPDS-NG. In one 

contract, Army officials said the contract had been transferred from 

another contracting office and suggested it could have been a data 

migration issue in transferring the contract between systems.

In our review of 100 DOD consolidated contracts from fiscal years 2011 

and 2012, which include the 96 contracts reported in FPDS-NG and 4 

contracts identified from other sources, we found that most—82 percent—

complied with requirements in the DFARS for justifying the consolidation. 

These provisions require defense agencies to, among other things, 

conduct market research, identify alternative contracting approaches that 

involve less consolidation, and include a determination by the senior 

procurement executive that the consolidation is necessary and justified. In 

determining if consolidation is necessary and justified for estimated 

contract requirements above a certain threshold, the DFARS provides 

that market research may indicate that the benefits of consolidation 

 8

The Federal Business Opportunities website, www.fedbizopps.gov, is the central website 

agencies use to communicate available procurement opportunities to the public.

Most DOD 

Consolidated 

Contracts Complied 

with Existing 

Acquisition 

Regulations, but 

Regulations Do Not 

Reflect Changes in the 

Law

Most DOD Consolidated 

Contracts and Orders Were 

Justified in Accordance 

with Defense Acquisition 

Regulations
Page 11 GAO-14-36 Small Business Contracting 

substantially exceed the benefits of the alternatives. Table 3 summarizes 

these requirements and the consolidated contracts we reviewed.

Table 3: DOD Compliance with DFARS Requirements for DOD Consolidated 

Contracts and Orders

Source: GAO analysis of DFARS 207.170-3 and DOD contracts.

a

DOD did not comply with multiple DFARS requirements for two of the contracts.

Almost all of the DOD consolidated contracts that we reviewed, including 

the four that had not been reported in FPDS–NG, were supported by a 

memorandum stating that the consolidation was necessary and justified. 

These memorandums included a statement that expected benefits, 

including savings or other benefits, exceeded the benefits of alternative 

approaches, and the determination that the consolidations were 

necessary and justified. In 17 of the contracts we reviewed, however, the 

consolidation decision was authorized by DOD officials, but not at the 

level specified in regulations.9

The consolidated contracts we reviewed largely addressed expected 

savings and benefits in quantitative terms. According to federal law and 

DFARS, consolidation may be necessary and justified if the benefits of 

consolidation substantially exceed the benefits of alternative approaches, 

DOD consolidated contracts also did not 

fully comply with DFARS consolidation requirements by not identifying 

alternative contracting approaches that involve less consolidation.

 9

This includes 12 Army contracts we reviewed that were approved by the Deputy Principal 

Assistant Responsible for Contracting (PARC) and had documentation delegating 

authority for the consolidation determination to this official. According to AFARS 5107.170-

3(b), however, for contract actions in which the total value of the consolidated 

requirements do not exceed $100 million, the Head of Contracting Activity may delegate 

the consolidation determination to the Principal Assistant Responsible for Contracting, 

without further delegation.

DFARS requirements for consolidated contracts

Not in Compliance

(100 Contracts Reviewed)

Acquisition strategy includes the results of market 

research 0

Acquisition strategy identifies alternative contracting 

approaches that would involve a lesser degree of 

consolidation 3

Senior procurement executive provides written 

determination that the consolidation is necessary and 

justified 

a

17a
Page 12 GAO-14-36 Small Business Contracting 

but the phrase “substantially exceed” is not further defined in statute or 

regulation.10

Table 4: Benefit and Cost Savings Described in DOD Consolidated Contracts and 

Orders Reviewed

DOD guidance provides that the benefit analysis must prove 

that the acquisition strategy’s benefits are much greater than the benefits 

of the alternative approaches. In more than half of the contracts we 

reviewed, officials quantified cost savings in either dollar amounts or as 

percentages; in other cases, justifications supported cost savings without 

metrics or data. For example, Air Force contracting officials justified 

consolidating requirements in a $5.9 million contract for electronic parts 

repair by stating that consolidation would allow the federal government to 

receive more favorable unit prices and permit the contractor to address 

obsolescence issues more efficiently. Table 4 shows savings and benefits 

described in the contracts we reviewed.

Consolidated contracts reviewed Total

Cost savings 

described 

quantitatively

Cost savings or other

benefits described 

qualitatively

Air Force 19 5 24

Army 40 13 53

Navy 6 5 11

Other DOD agencies 7 5 12

Total contracts 72 28 100

Source: GAO analysis of DOD consolidated contracts.

Consolidated contracts that are also bundled must demonstrate specific 

cost savings11

 10See DFARS § 207.170-3 (a)(3)(i) and 15 U.S.C. § 657q(c)(2)(A).

depending on the estimated value of the consolidated 

requirements, to justify the approach. Further, bundled contracts at DOD 

that are expected to exceed $8 million must include additional analysis, 

such as assessing the specific impediments to small business 

11Bundled contracts with estimated values at or below $94 million must demonstrate a 10 

percent savings, including options, while contracts expected to exceed $94 million in value 

must demonstrate a savings of either $9.4 million or 5 percent of the estimated value of 

the contract, including options, whichever is greater. 
Page 13 GAO-14-36 Small Business Contracting 

participation.12 The two bundled contracts we reviewed—a $288 million 

Navy contract identified as bundled in FPDS-NG and a $23 million Army 

contract identified through the FedBizOpps website13

While most DOD consolidated contracts were justified in accordance with 

existing DFARS, these regulations have not been fully updated to reflect 

new provisions on consolidating contract requirements in the 2010 Jobs 

Act.

—showed that the 

agencies both complied with these additional requirements. Specifically, 

Navy officials conducted a cost benefit analysis demonstrating savings of 

$28 million—or 10 percent—over 5 years for an aircraft maintenance, 

modification, and support services contract. Army officials estimated 

savings of $5.5 million—more than the 5 percent required—to justify a 

bundled construction contract.

14 These new provisions include requiring agencies to identify any 

negative impact by the consolidation strategy on contracting with small 

businesses and ensure that steps are taken to include small businesses 

in acquisition strategies. The act also included a provision for DOD to 

follow the $2 million threshold for consolidating contract requirements if it 

failed to meet small business goals. Since DOD failed to meet these 

goals in 2011 and 2012, the act required that DOD demonstrate in its 

acquisition strategy that consolidation is necessary and justified for 

contracts with a total value of more than $2 million.15

 12According to the FAR, bundled contracts or orders expected to exceed a specified dollar 

amount ($8 million for DOD contracts) are considered substantially bundled and agencies 

must provide additional information and analyses to justify the bundling. FAR § 7.107(e). 

This information includes a determination that the anticipated benefits of bundling justify 

its use and specifying actions designed to maximize small business participation. These 

requirements preceded the 2010 amendments to the Small Business Act. FAR § 

7.107(e)(3) and (5).

However, during the 

13Agencies are required to notify incumbent small businesses within 30 days of issuing a 

solicitation or placing an order of the intent to bundle the requirement and should notify 

them as to how they may contact the appropriate SBA representative. FAR §10.001(c)(2). 

Under DFARS § 205.205-70(a), when a proposed acquisition potentially involves 

bundling, DOD agencies are required to alert small businesses through a notice on 

FedBizOpps 30 days before a solicitation is issued or an order is placed of its intent to 

bundle.

14Small Business Jobs Act of 2010, Pub. L. No. 111-240 (codified at 15 U.S.C. §. 657q), 

amended the Small Business Act. The requirement in the Jobs Act for steps to be taken to 

include small businesses in acquisition strategies was further clarified in the National 

Defense Authorization Act for Fiscal Year 2013, Pub. L. No. 112-239, § 1671 (codified at 

15 U.S.C. § 657q(c)(1)(E)).

15Pub. L. No. 111-240 §1313.

DOD and GSA Are Waiting 

for SBA Final Rulemaking 

before Updating or 

Establishing Consolidation 

Guidance
Page 14 GAO-14-36 Small Business Contracting 

time in which the contracts we reviewed were awarded, the DFARS 

threshold remained at the over $6 million level, and DOD officials followed 

this guidance.16 Since agency officials were relying on consolidation 

requirements in the DFARS and accompanying guidance that DOD 

provided them at that time, we determined the extent to which they 

complied with those requirements. For example, a $5.9 million Navy 

contract that combined requirements did not have a justification because 

it had an estimated value below the $6 million threshold specified in 

DFARS. In October 2013, DOD issued instructions to lower the 

consolidated threshold to $2 million.17 DOD officials also explained that 

they defer to SBA, the responsible regulatory agency, to issue final rules 

on other changes before updating their acquisition regulations. SBA’s 

final rule implementing the 2010 Jobs Act was issued in October 2013 

and will take effect no later than December 31, 2013.18

Like DOD, GSA officials noted that they were waiting for SBA to issue 

final regulations before implementing the consolidation requirements in 

the Small Business Act, as amended. However, unlike DOD, GSA was 

not required to justify its consolidated contracts before the Jobs Act, 

which enacted contract consolidation requirements for the first time for all 

federal agencies. Thus, GSA does not currently have any agency specific 

guidance providing details on its review process for identifying contracts 

that have consolidated requirements or a process to oversee and approve 

their consolidation. GSA officials explained that although GSA currently 

does not have its own consolidation guidance, when GSA processes 

consolidated contracts for DOD, a process called “interagency 

contracting,” GSA complies with requirements in DFARS. In anticipation 

of SBA rulemaking, GSA officials said they are considering DOD 

consolidation guidance and other information to help prepare for creating 

their own consolidation procedures.

 16DFARS § 207.170-3(a). 

17DOD Memorandum in reference to DARS Tracking Number: 2013-O0021, Class 

Deviation-Contract Consolidation, October 1, 2013.

18Small Business Administration, final rule, 78 Fed. Reg. 61114 (Oct 2, 2013).
Page 15 GAO-14-36 Small Business Contracting 

Our review of 100 consolidated and bundled contracts and orders issued 

by DOD found that slightly more than half—or 52—were awarded to small 

businesses. Of the 48 contracts and orders awarded to large businesses, 

DOD and SBA officials often addressed small business impacts through 

measures such as small business subcontracting plans.

The Small Business Act, with regard to consolidation, requires the head 

of each federal agency to ensure that the agency’s decisions on 

consolidating contract requirements are made with a view to providing 

small businesses with appropriate opportunities to participate as prime 

contractors and subcontractors in the procurements of the federal 

agency. Similarly, the Small Business Act, with regard to bundling, 

provides that to the maximum extent practicable, agencies’ procurement 

strategies must facilitate the maximum participation of small businesses 

as prime contractors and subcontractors, and must provide opportunities 

for small business participation during acquisition planning and in 

acquisition plans. Officials told us that contracting offices work closely 

with agency small business representatives to address small business 

concerns. In our review of 100 DOD consolidated and bundled contracts, 

we found that 52 contracts and orders from fiscal years 2011 and 2012 

were awarded to small businesses. We found that most of the contracts 

awarded to small businesses had been reserved for small business 

participation through initiatives for small business, such as small business 

set asides.19

For the 48 remaining consolidated contracts and orders that were 

awarded to large businesses, 30 contracts included requirements that 

 19According to FAR § 19.501, a set aside for small business is the reserving of an 

acquisition exclusively for participation by small business concerns. In addition, small 

businesses can receive awards through the SBA 8(a) Business Development Program, 

which assists small and disadvantaged businesses. FAR Subpart 19.8. Other programs 

for small businesses include the Service-disabled Veteran-owned Small Business 

Procurement Program and the Historically Underutilized Business Zone Program. FAR 

Subparts 19.14 and 19.13, respectively. 

DOD and SBA 

Officials Took Various 

Actions to Address 

the Impact of 

Contract 

Consolidation on 

Small Businesses

Small Businesses Received 

More than Half of the 

Consolidated Contracts 

Reviewed
Page 16 GAO-14-36 Small Business Contracting 

were previously performed by small businesses. Almost all of these 30 

contracts included measures to address small business participation, 

either by including small business set asides for related orders or 

subcontracting to small businesses part of their requirements. For 

example, one Air Force contract for environmental remediation included 

two options for issuing orders under the contract. One option was to allow 

only small businesses to compete for orders considered suitable for small 

business performance. The other option was to open competition for 

orders to both large and small businesses. We also identified 

consolidated contracts that used other means to address small business 

impacts. For example, small business officials raised concerns that a 

consolidated Air Force contract might include requirements previously 

performed by small businesses. To address these concerns, the contract 

that was issued specifically excluded any requirements that small 

businesses previously had performed.

Contracting agency small business specialists have responsibilities for 

maximizing small business participation in federal procurement. For 

example, no later than 30 days before issuing a solicitation or placing an 

order, agencies are required to coordinate with their small business 

specialists when an acquisition strategy contemplates substantial 

bundling, unless the contract or order is set aside for small businesses. 

Further, the small business specialist must notify DOD’s Office of Small 

Business Programs if the strategy includes bundled requirements that the 

agency has not identified as bundled, or includes unnecessary bundling. 

If the strategy involves substantial bundling, the small business specialist 

must assist in identifying alternative strategies that would reduce or 

minimize the scope of bundling. In addition, DOD’s Office of Small 

Business Programs encourages program staff to include small business 

specialists in the early stages of acquisition planning. In the two bundled 

contracts we reviewed, the DOD and SBA small business representatives 

were consulted and involved in the contracting agencies’ efforts to identify

small businesses capable of performing the requirements. Both contracts 

used subcontracting plans as the primary means to support small 

businesses affected by bundling. In one case, officials reported that small 

business participation through subcontracting was expected to be greater 

than it had been prior to bundling the requirements and the SBA 

representative said that appropriate steps were taken to protect small 

business interests.

DOD and SBA Coordinated 

to Address Small 

Businesses Impacted in 

Bundled Contracts
Page 17 GAO-14-36 Small Business Contracting 

The Small Business Act requires SBA to track information on bundled 

contracts and annually report to Congress on these contracts.20

• Maintain a database containing data and information regarding each 

bundled contract awarded by a federal agency and each small 

business concern displaced as a prime contractor as a result of such 

bundling;

Specifically, SBA is required to:

• For bundled contracts that are recompeted as a bundled contract, 

determine the amount of savings and benefits achieved through the 

bundling of contract requirements, whether they would continue to be 

realized if the contract remains bundled, and whether the savings 

would be greater if procurement requirements were divided into 

separate solicitations suitable for award to small business concerns; 

and

• Provide an annual report to the Congressional Committees on Small 

Business of the House and Senate each March on the number of 

small business concerns displaced as prime contractors as a result of 

bundled contracts awarded by federal agencies and provide 

information related to these contracts, such as the cost savings 

realized by bundling over the life of the contract and the extent to 

which they complied with the contracting agency’s small business 

subcontracting plan.

SBA has not submitted an annual report to Congress on bundling since 

fiscal year 2010, which officials attribute to an oversight. Officials also 

said that SBA is in the process of preparing reports for fiscal years 2011 

and 2012, but did not estimate a timeline for completion.

In the 2010 report, SBA provided data detailing the number of 

consolidated and bundled contracts awarded by federal agencies during 

the time period covered by the report. However, the report stated that 

SBA’s ability to gather and analyze contract bundling data to the extent 

required in the Small Business Act was limited.21

 2015 U.S.C. §§.644(p)(2)(A) and (4).

Officials explained that 

agencies and SBA primarily use FPDS-NG as their information database 

2115 U.S.C. § 644(p)(2)(A).

SBA Collects 

Incomplete 

Information on 

Bundled Contracts 

and Has Not Reported 

to Congress as 

Required
Page 18 GAO-14-36 Small Business Contracting 

to identify bundled contracts, but the system does not collect the 

information needed to meet other statutory reporting requirements, such 

as the number of small businesses displaced by bundled contracts.

Similarly, SBA officials said that bundled contracts are rarely recompeted 

as bundled contracts. Further, SBA also noted that because the 

requirements of a bundled contract can change over the term of the 

contract, it is difficult to determine the level of savings achieved.

Consolidating contract requirements can help agencies achieve cost 

savings and other efficiencies, but these decisions must be weighed 

against the potential impact on small businesses. In recent years, 

Congress has enacted provisions of law to help address concerns that 

small businesses might be negatively affected by contract consolidations, 

including identifying small business impacts and reducing the threshold 

for consolidated contract justifications to $2 million. Congress has

enacted requirements for consolidated contracts that apply to all civilian 

agencies, including GSA, and it is important that agency officials have 

clear and complete guidance to help navigate what can be complex 

decisions about whether to consolidate requirements and how to report 

the resulting contracts. Although the full extent of agency miscoding of 

consolidated and bundled contracts is unknown, having such guidance 

could help improve agency reporting. DOD and GSA have been awaiting 

SBA’s final rules on consolidated contracts to update or create 

corresponding guidance. Now that SBA has issued its final rule, these 

agencies can take the actions needed as soon as practicable. Also, by 

lowering the dollar threshold for consolidated contracts from $6 million to 

$2 million to reflect recent legislative changes, DOD ensures that its 

components review and justify consolidated contracts at the levels 

Congress has required.

SBA and agency small business officials play vital roles to help agencies 

take steps to determine and mitigate impacts on small business as 

required. But SBA has not fulfilled its responsibilities to track and report to 

Congress on the number of bundled contracts awarded or their impacts 

on small business. Until SBA carries out these reporting responsibilities, 

Congressional oversight intended to protect small businesses may not 

function as intended by lawmakers.

Conclusions
Page 19 GAO-14-36 Small Business Contracting 

To ensure that DOD reviews and justifies consolidated contracts at the 

dollar thresholds established in law, we recommend that the Secretary of 

Defense:

• Update existing defense acquisition regulations and related guidance 

to reflect recent legislative changes that lower the dollar threshold for 

consolidated contracts from over $6 million to over $2 million.

To make guidance for contract consolidation consistent with current law, 

we recommend that the Secretary of Defense and the Administrator of 

General Services:

• Act expeditiously to update or establish agency guidance for 

consolidated contracts after the Small Business Administration 

rulemaking is completed.

To promote agencies’ compliance with existing law, we recommend that 

the Administrator of the Small Business Administration:

• Submit required bundling reports to Congress.

We provided a draft of this report to DOD, GSA, and SBA. In their written 

comments, the three agencies concurred with our recommendations and 

provided information on actions taken or underway to address them. DOD 

issued a Class Deviation to its acquisition regulation in October 2013 that 

implements our recommendation by lowering the dollar threshold for 

review and justification of consolidated contracts to $2 million. DOD also 

plans to update its acquisition regulations for consolidated contracts after 

the FAR changes resulting from the SBA’s final rulemaking are complete. 

DOD’s letter is reprinted in appendix II. DOD also provided technical 

comments which we considered and incorporated into the report as 

appropriate. 

GSA agreed with our recommendation that it act expeditiously to 

establish agency guidance for consolidated contracts after the SBA’s 

rulemaking is complete. SBA recently published the applicable final rule, 

which takes effect no later than December 31, 2013. Through its role on 

the Federal Acquisition Regulatory Council, GSA is working to update the 

FAR to reflect the new regulation and will establish agency-specific 

guidance after the FAR rule takes effect, if necessary. GSA’s letter is 

reprinted in appendix III. 

Recommendations for 

Executive Action

Agency Comments

and Our Evaluation
Page 20 GAO-14-36 Small Business Contracting 

In response to our recommendation that SBA submit required bundling 

reports to Congress, SBA reported that it is preparing the required reports 

for fiscal years 2011 and 2012. SBA’s letter is reprinted in appendix IV. 

We are sending copies of this report to the appropriate congressional 

committees, the Secretary of Defense, the Administrator of General 

Services, and the Administrator of the Small Business Administration. In 

addition, the report will be available at no charge on the GAO website at 

http://www.gao.gov.

Should you or your staff have questions about this report or need 

additional information, please contact me at (202) 512-4841 or 

woodsw@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. 

Other staff making key contributions to the report are listed in appendix V.

William T. Woods

Director

Acquisition and Sourcing Management
Appendix I: Objectives, Scope, and 

Methodology

Page 21 GAO-14-36 Small Business Contracting 

The National Defense Authorization Act (NDAA) for Fiscal Year 2013 

mandated that we review data and information regarding consolidated 

contracts awarded by federal agencies.

1 In addition, Conference Report 

112–339 on the NDAA for Fiscal Year 2012 mandated us to review 

Department of Defense (DOD) compliance with laws and regulations 

addressing contract bundling and consolidation for construction and base 

support services.2

To assess the extent to which DOD and GSA have consolidated 

contracts, we used FPDS-NG to compile data on contracts and orders 

awarded by federal agencies in fiscal years 2011 and 2012 that were 

identified as consolidated and bundled in the data system. We selected 

this timeframe to capture contracts with the two most recent years of data 

available in FPDS-NG at the time of our review. Using this data, we 

determined the specific number of contracts and orders awarded, 

including the total dollars obligated, and identified the two agencies with 

the greatest share of consolidated contracts. Of the 358 consolidated and 

bundled contracts awarded government-wide, we identified 290 contracts 

reported by DOD and GSA. DOD had the largest amount with 266 

consolidated contracts and 8 contracts that were also bundled. GSA had 

16 consolidated contracts with obligations, the second largest number 

reported.

According to the Federal Procurement Data SystemNext Generation (FPDS-NG), DOD and the General Services 

Administration (GSA) accounted for more than 80 percent of the reported 

use of consolidated and bundled contracts and orders awarded in fiscal 

years 2011 and 2012. For this report, we assessed the extent to which (1) 

DOD and GSA have consolidated contracts; (2) DOD and GSA 

justifications for contract consolidation complied with relevant laws and 

regulations; (3) DOD, GSA, and the Small Business Administration (SBA) 

addressed small business impacts of consolidation, including bundling; 

and (4) SBA collected and reported information on consolidated contracts 

that are considered bundled.

From the 290 DOD and GSA consolidated contracts and orders identified, 

we selected 157 for review through two different processes. For DOD, we 

selected a systematic random sample of 133 of the consolidated

contracts identified in FPDS-NG. For this sample, we ensured that we 

 1

National Defense Authorization Act for Fiscal Year 2013, Pub. L. No. 112-239, §1671.

2

H. R. Rep. No. 112-329, at 674–675 (2011) (Conf. Rep.).

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 22 GAO-14-36 Small Business Contracting 

had a representative proportion of contracts for base support services 

and construction—the two categories specified in our mandate—by 

reviewing the North American Industry Classification System (NAICS) 

code for facilities operation support to identify base support service 

contracts and the product service code to identify construction contracts.

We also selected all 8 DOD contracts identified as bundled for a total of 

141 DOD contracts. For GSA, we selected all 16 contracts that FPDS-NG 

identified as consolidated for our review. 

We contacted DOD and GSA contracting officials to confirm that the 157 

selected contracts and orders identified as consolidated or bundled in 

FPDS-NG were correctly coded. For most of the contracts that were 

miscoded, contracting officials provided verification that they corrected 

the miscoding, such as by providing contract action reports showing 

updates to FPDS-NG. Of the 141 DOD contracts reviewed, DOD 

identified 48 as being incorrectly coded as consolidated in FPDS-NG. 

GSA officials reported that all 16 had been miscoded as consolidated. 

Overall, we confirmed 100 consolidated contracts, including two that were 

also bundled.

In addition, to supplement our random sample of consolidated contracts, 

we spot checked the accuracy of contract categorization in FPDS-NG for 

a nonprobability selection of contracts that were coded as some other 

category of contract. First, we selected five contracts that DOD and GSA 

stated were incorrectly coded as consolidated or bundled and reviewed 

contract documentation to confirm that there was no indication of potential 

consolidation or bundling. For DOD, we judgmentally sampled four 

contracts that were miscoded from the defense agencies that had a base 

and all options value above $6 million, which is the threshold for 

consolidation in defense acquisition regulations. We also judgmentally 

selected and reviewed one of GSA’s 16 miscoded contracts that met the 

dollar threshold of $2 million, as set by the 2010 Small Business Jobs Act. 

Second, we drew a population size from the FPDS–NG using as criteria 

all non-consolidated and non-bundled DOD contracts awarded in fiscal 

years 2011 and 2012 that had the NAICS code for base support services. 

To draw a reasonable judgmental sample, we selected contracts awarded 

by the Air Force, Army, and Navy command units from which we had 

previously obtained consolidated contract documentation. We included 

contracts that met conditions that would affect whether they were 

considered consolidated or bundled, including contracts with a base and 

all options value of more than $6 million to meet the consolidation 

threshold in DOD guidance and contracts that might be bundled because 

they were performed in the United States, foreign funds were not 
Appendix I: Objectives, Scope, and 

Methodology

Page 23 GAO-14-36 Small Business Contracting 

included, and the contract was not awarded to a small business. Of the 

eight contracts we reviewed, one was a consolidated contract that had 

not been identified as such in FPDS-NG.

We also reviewed contracts identified as consolidated or bundled through 

sources outside of FPDS-NG data. We examined the Federal Business 

Opportunities (FedBizOpps) archives for records of bundled contracts 

posted between fiscal years 2010 and 2013. Through this review we 

identified one bundled contract that had not been identified as such in 

FPDS-NG. Additionally, DOD officials confirmed two other contracts as 

consolidated that were not identified in our initial FPDS-NG data.

Based upon finding substantial incorrect coding in FPDS-NG, we 

concluded that the systematic, random sample of 133 consolidated 

contracts could not be generalized to the universe of consolidated 

contracts identified via FPDS–NG in fiscal years 2011 and 2012. 

Therefore, we were only able to describe and attribute to those verified 

consolidated contracts that we reviewed.

To assess the extent to which federal agencies’ justifications for 

consolidation comply with relevant laws and regulations, we compared 

contracts to the provisions of the Small Business Act, prior to the 2010 

amendments, as reflected in the Defense Federal Acquisition Regulation 

Supplement to require agencies to demonstrate that consolidation and 

bundling are necessary and justified before issuing such contracts. We 

also reviewed regulations issued in the Federal Acquisition Regulation 

and guidance issued by the military departments related to consolidated 

and bundled contracts. In addition, we interviewed DOD and GSA 

contracting officials, including senior officials at DOD’s Office of Small 

Business Programs and GSA’s Office of Small Business Utilization, to 

request documents on additional guidance or training procedures to 

assist staff in processing consolidated and bundled contracts per the 

stipulations outlined in acquisition regulations.

We obtained documentation of the verified consolidated and bundled 

contracts to check for compliance. For both consolidated and bundled 

contracts, we reviewed the acquisition plan, market research, the SBA 

small business coordination record, the justification letter with the 

required signature, and subcontracting plans. For bundled contracts, we 

additionally assessed benefit analysis and announcements on the 

FedBizOpps website to confirm market research occurred 30 days prior to 

the solicitation date. For cases in which discrepancies existed between 

contract documentation from the agencies and what was required under 
Appendix I: Objectives, Scope, and 

Methodology

Page 24 GAO-14-36 Small Business Contracting 

the provisions, we followed up by contacting contracting offices to request 

either further documentation or an explanation, or both. We also spoke 

with senior SBA officials and procurement center representatives (PCR) 

and officials from the agencies’ small business programs to confirm 

whether contracts were considered consolidated or bundled.

We assessed the extent to which DOD and SBA address small business 

impacts from consolidated and bundled contracts by reviewing FPDS-NG 

data for the DOD contracts to determine whether they were awarded to a 

small business. We examined contract documentation, including 

acquisition strategies, consolidation memos, and coordination records, to 

identify consolidated contracts with requirements that were previously 

performed by small businesses and steps taken to address the impacts. 

We also interviewed responsible contracting officials, agency small 

business specialists, and SBA officials for selected contracts to discuss 

their coordination processes and actions to address small business 

participation.

We assessed the extent to which SBA collects and reports information on 

bundled contracts by interviewing senior SBA officials and PCRs to 

assess coordination efforts with contracting officials and agency small 

business specialists. We also collected and reviewed SBA documents, 

such as bundling alert forms, to track and report consolidated and 

bundled contracts within the agency.

We conducted this performance audit from December 2012 to November 

2013 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: Comments from the Department 

of Defense

Page 25 GAO-14-36 Small Business Contracting 

Appendix II: Comments from the Department 

of Defense
Appendix II: Comments from the Department 

of Defense

Page 26 GAO-14-36 Small Business Contracting 
Appendix III: Comments from the General 

Services Administration

Page 27 GAO-14-36 Small Business Contracting 

Appendix III: Comments from the General 

Services Administration
Appendix IV: Comments from the Small 

Business Administration

Page 28 GAO-14-36 Small Business Contracting 

Appendix IV: Comments from the Small 

Business Administration
Appendix IV: Comments from the Small 

Business Administration

Page 29 GAO-14-36 Small Business Contracting 
Appendix V: GAO Contacts and Staff 

Acknowledgments

Page 30 GAO-14-36 Small Business Contracting 

William T. Woods, (202) 512-4841 or woodsw@gao.gov

In addition to the contact named above, W. William Russell, Assistant 

Director; Jennifer Dougherty; Jenny Shinn; Cheryl M. Harris; Julia 

Kennon; Sylvia Schatz; William Shear; Paige Smith; Danielle Green; and 

Roxanna Sun made key contributions to this report.

Appendix V: GAO Contacts and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(121105)
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