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85–085 2013

BUNGLING BUNDLING: HOW CONTRACT BUNDLING 

AND CONSOLIDATION REMAIN CHALLENGES TO 

SMALL BUSINESS SUCCESS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CONTRACTING AND 

TECHNOLOGY 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

OCTOBER 10, 2013 

Small Business Committee Document Number 113–041 

Available via the GPO Website: www.fdsys.gov 

SBREP-219 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

BLAINE LUETKEMER, Missouri 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JAIME HERRERA BEUTLER, Washington 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

DAVID SCHWEIKERT, Arizona 

KERRY BENTIVOLIO, Michigan 

CHRIS COLLINS, New York 

TOM RICE, South Carolina 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

YVETTE CLARKE, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRAD SCHNEIDER, Illinois 

RON BARBER, Arizona 

ANN McLANE KUSTER, New Hampshire 

PATRICK MURPHY, Florida 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Richard Hanna ................................................................................................ 1 

Hon. Grace Meng ..................................................................................................... 2 

WITNESSES 

Juanita Beauford, President, Association of Procurement Technical Assistance 

Centers, Newark, DE ........................................................................................... 4 

Robert A. Burton, Senior Partner, Venable LLP, Washington, DC ..................... 6 

Gloria Larkin, President, TargetGov, Baltimore, MD, testifying on behalf 

of Women Impacting Public Policy ..................................................................... 8 

Margot Dorfman, CEO, U.S. Women’s Chamber of Commerce, Washington, 

DC .......................................................................................................................... 10

APPENDIX 

Prepared Statements: 

Juanita Beauford, President, Association of Procurement Technical Assistance Centers, Newark, DE ..................................................................... 25 

Robert A. Burton, Senior Partner, Venable LLP, Washington, DC ............. 30 

Gloria Larkin, President, TargetGov, Baltimore, MD, testifying on behalf 

of Women Impacting Public Policy .............................................................. 43 

Margot Dorfman, CEO, U.S. Women’s Chamber of Commerce, Washington, DC ..................................................................................................... 51 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

Associated General Contractors of America - AGC ....................................... 54 

National Association of Surety Bond Producers - NASBP ............................ 64 

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(1) 

BUNGLING BUNDLING: HOW CONTRACT 

BUNDLING AND CONSOLIDATION REMAIN 

CHALLENGES TO SMALL BUSINESS SUCCESS 

THURSDAY, OCTOBER 10, 2013 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON CONTRACTING AND TECHNOLOGY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 11:31 a.m., in Room 

2360, Rayburn House Office Building, Hon. Richard Hanna [chairman of the Subcommittee] presiding. 

Present: Representatives Hanna, Bentivolio, Meng, Chu, and 

Clarke. 

Chairman HANNA. Thank you, everyone, for being here. This 

morning we are here to talk about contract bundling and what consolidation means for small business, specifically what unjustified 

consolidation means for small business. In this Subcommittee we 

look at a lot of different procurement tools and have always been 

careful to say that no one type of contracting methodology is inherently good or bad. But that it is how government uses a tool that 

matters. In no case is it truer than in bundling and in consolidation. 

In the Small Business Act, Congress tells agencies how to determine whether bundling and consolidation—whether or not they are 

being appropriately used. The law provides definitions of the methodologies, explains what benefits would justify the use of the strategy, and requires agencies to mitigate justified bundling and consolidation and prohibits unjustified bundling and consolidation. 

When bundling and consolidation are justified, they deliver real 

benefits for the taxpayer. However, unjustified bundling unnecessarily excludes small businesses from competing for Federal contracts, which results in higher prices for taxpayers. Thus, this system only works if agencies correctly identified contracts as bundled 

and consolidated. 

While we don’t have all of the data yet, agencies are reporting bundling of 38 contracts, worth $2.8 billion in fiscal year 2013, and 

consolidating another 98 contracts worth $29 billion. This would 

mean that about 6 percent of the dollars we spend are bundled or 

consolidated, and that amounts to 136 of 10 million-plus contracts 

awarded that were actually bundled. 

Unfortunately, we know this number is significantly underreported. For example, during our June hearing on strategic 

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2 

sourcing we heard that agencies are turning more and more to consolidating and bundling contracts for goods and services normally 

procured from small businesses. However, the strategic sourcing 

contracts are not being reported as bundled or consolidated. 

Likewise, while agencies did not award all of the top 20 contracts 

predicted for fiscal year 2013, of those awarded none included a 

bundling or consolidation. None included a bundling or consolidation justification, even though these contracts were expected to exceed $105 billion. 

While it is easy to point out large omissions, it is often the smaller contracts, those in tens or hundreds of millions of dollars that 

represent the greatest loss of opportunity for small business. I hope 

to hear from our witnesses today on how large this problem is, 

what we can do about it, and frankly, at this time to see what consequences we might apply to the agencies and how we can correct 

this circumstance. 

Further, I am concerned other aspects of the law are not being 

enforced. For example, after a bundling contract is awarded, the 

government is supposed to report back on the anticipated savings 

or benefits that justified the bundling and explains what those benefits were. To date, not one, not one such report has been completed. 

I am hoping our witnesses today will help us understand the 

scope of the problem, what we need to do to get reliable data on 

bundling and consolidation. I am also looking for their ideas to hold 

agencies accountable for unjustified bundling and consolidation 

since the current statutory provisions are being observed in the 

breach. Finally, I am seeking their opinions on other ways we can 

improve the law to ensure that small businesses have a piece of 

this pie. 

At a time when we are focused on the financial health of the 

country, I believe that part of the solution is to find ways to improve competition, and thereby reduce prices. Small businesses are 

a critical part of that solution since their participation in competition creates jobs and encourages innovation. I look forward to your 

testimony, and thank you all again for being here today. 

I turn to my friend, Ms. Meng, Grace Meng, ranking member for 

her opening comments. 

Ms. MENG. Thank you, Mr. Chairman. Thank you to our witnesses for being here today. 

Today small businesses are looking for opportunities to expand 

and to grow stronger. As the catalyst for nearly two-thirds of employment gains, small business expansion is essential for the economy. 

One way Congress can increase the job-creating power of small 

firms is through the Federal procurement marketplace. In fact, 

during the last decade the government has doubled its contracting 

efforts to more than $500 billion per year. This makes the U.S. 

Government one of the largest single buyers of goods and services 

in the world. 

In order to ensure that small firms successfully compete for these 

Federal contracts, several tools and resources have been put in 

place. This includes the 23 percent small business procurement 

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3 

goal, as well as protections that help level the playing field for 

smaller enterprises. 

Programs at the Small Business Administration provide a foundation for many entrepreneurs to enter the Federal marketplace 

and provide a springboard for growth. Together, these goals, policies, and programs have encouraged agencies to recognize that 

small businesses can provide high-quality goods and services at a 

competitive price to the taxpayer. 

For many small firms, however, these resources are simply not 

enough to overcome one of the biggest hurdles they face: contract 

bundling. Although we must be cognizant of the cost to Federal 

agencies, we must ensure that bundling does not limit the accessibility of small businesses to Federal contracts, especially while the 

government is falling short of its 23 percent goal. 

Last year, more than $50 billion or 10 percent of total contracting dollars was awarded through bundled or consolidated contracts. As a result of bundling, small businesses missed out on contracting opportunities worth more than $15 billion. By bundling 

large contracts such as these, the government effectively shuts out 

many smaller companies from competing for work that they have 

the skills and the expertise to perform. 

Splitting these megacontracts into smaller pieces would enable 

more small businesses to compete for Federal agency work. By 

doing so, the government would be able to increase competition, accessing qualified companies and the high-quality service they bring 

to the table. 

At the forefront of this battle are procurement center representatives, small business specialists, and procurement technical assistance centers, whose already depleted ranks have been further reduced by sequestration. Unfortunately, they are fighting an uphill 

battle. Last year, SBA’s CCR challenged just 28 bundled contracts 

out of more than 17 million contracting actions and only 6 were actually unbundled. This is simply not enough oversight to make a 

difference. Ensuring that these bundled and consolidated contracts 

are more thoroughly examined is critical to giving small businesses 

an equal opportunity in this marketplace. 

These challenges, while significant, pale in comparison to the impact that the shutdown is having on small business contractors. 

With the government typically spending $1.4 billion on contracts 

per day, the shutdown is causing severe disruption and confusion 

for small businesses. For many firms it is unclear when they will 

be paid for their work, which in turn is causing uncertainty for 

their employees. 

In 2012, my district received an average of $117,000 a day, or $2 

million a month, in loans from the SBA. These loans are not being 

processed. As a result, small businesses are left without access to 

the opportunities and resources they have come to depend on for 

their livelihood. 

Given the shutdown, I am not only looking forward to testimony 

about contract bundling today, but also concerning the impact that 

the government’s closure is having on our small firms. I am hopeful 

that we can reopen the government and in the future take steps 

to reduce the prevalence of bundling across Federal agencies. 

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4 

With that said, I want to thank all of the witnesses in advance 

of their testimony again and their input on these important issues. 

Thank you Mr. Chairman. I yield back. 

Chairman HANNA. Thank you. 

It is my job to explain the lights. It is a little like your stewardess explaining how the seat belts work. So red is bad, green is 

good. We are pretty flexible, so we want to hear what have you to 

say. 

In any event, our first witness today is Juanita Beauford, president, Association of Procurement and Technical Assistance Centers, called PTACs, and director of the University of Delaware 

PTAC program. There are currently 94 PTAC programs across the 

country operating at 300 locations, and these individuals assist 

small businesses with Federal contracting as Ms. Beauford is 

uniquely situated to speak to the experience of small contract bundling and small businesses and consolidation. 

Ms. Beauford, thanks for being here, and you may begin. 

STATEMENTS OF JUANITA BEAUFORD, PRESIDENT, ASSOCIATION OF PROCUREMENT TECHNICAL ASSISTANCE CENTERS, 

NEWARK, DE; ROBERT A. BURTON, SENIOR PARTNER, 

VENABLE LLP, WASHINGTON, DC; GLORIA LARKIN, PRESIDENT, TARGETGOV, BALTIMORE, MD, TESTIFYING ON BEHALF OF WOMEN IMPACTING PUBLIC POLICY; AND MARGOT 

DORFMAN, CEO, U.S. WOMEN’S CHAMBER OF COMMERCE, 

WASHINGTON, DC 

STATEMENT OF JUANITA BEAUFORD 

Ms. BEAUFORD. Thank you, Chairman Hanna, Ranking Member 

Meng, and distinguished members of the Subcommittee. Thank you 

for the opportunity to testify here today. I am honored to speak before you on behalf of the Association of Procurement Technical Assistance Centers, APTAC, and the small businesses we serve, and 

to express our gratitude for your leadership on their behalf. As you 

said, my name is Juanita Beauford, president of APTAC and the 

professional organization of now 97 procurement centers nationwide. 

Created by Congress in 1985, PTACs assist local businesses at 

little or no cost by preparing them to become capable government 

contractors, believing that a broad base of small business suppliers 

provide the highest quality and best value to our government while 

creating a strong and vibrant economic base for our communities. 

Last year we helped over 70,000 small businesses win more than 

112,000 government contracts, valued at over $14.1 billion. 

We applaud your efforts to reexamine the issue of bundling and 

consolidation. Many of our members report frustration about dwindling bid opportunities as agencies increasingly rely on large acquisition mechanism such as strategic sourcing, government-wide acquisition contracts, multi-agency contracts, omnibus ‘‘single solution’’ contracts, and multiple year indefinite delivery indefinite 

quantity contracts, as well as bundling and consolidation. 

There is a clear perception that the number of solicitations appropriate for small businesses is shrinking significantly, while 

small businesses are additionally disadvantaged by the lack of acSBREP-219 with DISTILLER

5 

cess to contracting officers and the trend away from Best Value 

tradeoffs and towards lowest price technically acceptable. 

We cannot quantify the extent to which perceptions are accurate. 

As you know, the data is incomplete and difficult to find. And we 

hear little about efforts to challenge or mitigate consolidation practices. Agencies strive to be good stewards over tax dollars, often 

with underfunded acquisition offices. Streamlined vehicles are attractive because they are easy and promise cost savings. 

I suspect there is confusion both about what constitutes bundling 

and that there are requirements to make solicitations accessible to 

small businesses. Enforcement of such requirements is simply not 

happening in many cases. Simplifying definitions could be an important place to start. Having different definitions for bundling and 

consolidation is itself difficult. Select one term and define it simply; 

for example, two or more requirements that would reasonably be 

provided or performed under two or more separate contracts. 

To bring this under the umbrella, all vehicles that present barriers to small businesses while making communication about and 

measurement of the issue easier, then define the criteria under 

which consolidated contracts may be appropriate or require review 

or justification. This would make clear the newer mechanisms, 

such as Strategic Sourcing, GWACs, et cetera, indeed constitute 

consolidated solicitation, which is the first step in determining 

their prevalence and impact. Simplifying the reporting process and 

identifying a better platform for making the information available 

to TCRs and the public could also be helpful, and we have included 

an example in our addendum to our written testimony. 

Also intended to provide accountability, it appears that requirements are often sidestepped. This information must be tracked and 

analyzed so that effective strategies for protecting the ability of 

small businesses to participate in the Federal marketplace can be 

developed and implemented. But finding realistic enforcement triggers and providing adequate resources to implement them is also 

critical. The fact that enforcement actions are rare undermines existing regulations. 

But the real challenge is to convince government buyers that 

their interests can be well served by small businesses. To this extent, we encourage the Subcommittee to consider initiatives to educate agency acquisition staff about statutory and regulatory provisions with regards to bundling and consolidation, while emphasizing the importance of a robust base of small business suppliers 

and the specific benefits small businesses can bring to agency requirements. 

Contracting officers may not be aware of these benefits, much 

less best practices for accessible contract vehicles and small business outreach. There are success stories out here. Highlighting 

them while training contracting officers on how and why to contract with small businesses could be critical to overcoming the 

trend towards consolidation. Buying from small businesses must be 

seen as an appealing option. 

To the extent that APTAC or the PTACs can help, please call 

upon us. PTACs are proud to collaborate with local Federal offices, 

and APTAC has partnered with agencies for national outreach. We 

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6 

would gladly work with additional agencies to open more opportunities to small businesses. Thank you. 

Chairman HANNA. Thank you. 

Our second witness is Robert A. Burton. Mr. Burton is a senior 

partner in Venable LLP in Washington, D.C., where he is a nationally recognized Federal procurement attorney. Prior to joining 

Venable, Mr. Burton spent 7 years at the Office of Federal Procurement serving as Deputy Administrator, as well as Acting Administrator for 2 years. 

Mr. Burton, thank you for being here. 

STATEMENT OF ROBERT A. BURTON 

Mr. BURTON. Chairman Hanna, Ranking Member Meng, and 

members of the Subcommittee, I very much appreciate the opportunity to testify today and discuss how contract bundling and consolidation remain difficult challenges for small businesses and why 

increased congressional oversight is needed. 

Prior to joining the Venable law firm in 2008, I did serve as the 

Deputy Administrator of the Office of Federal Procurement Policy, 

oftentimes referred to as OFPP. While serving in this capacity I 

worked on initiatives to increase contracting opportunities for small 

businesses and assisted with the development of the 2002 Office of 

Management and Budget report on contract bundling, which ultimately resulted in amendments to the Federal Acquisition Regulation and the regulations issued by the Small Business Administration. 

The bundling report was part of the President’s small business 

agenda and focused on increasing agency reporting on bundled contracts and mitigating the negative effects of justified bundling on 

small businesses. 

The 2002 report also resulted in the regulatory requirement for 

bundling reviews of task orders under the GSA schedules and other 

multiple award contract vehicles, which was a significant step forward because the majority of our Federal procurement dollars are 

actually awarded through task orders under umbrella contracts. 

In my testimony today, Mr. Chairman, I would like to focus on 

three factors that in my view have undermined the effectiveness of 

the regulations and the laws passed by Congress that were intended to mitigate the effects of contract bundling and contract 

consolidation. And these three factors are, one, the lack of accurate 

and reliable data on bundled and consolidated contracts; two, the 

lack of agency accountability for not following applicable laws and 

regulations on this subject; and three, the lack of recourse for small 

businesses harmed by unjustified contract bundling or consolidation. 

With respect to the first issue, the unavailability of accurate 

data, it appears that agencies simply have failed to report their use 

of bundled requirements as required under the procurement regulations. Indeed, the SBA Web site that tracks agencies’ bundling 

reports which must be filed on an annual basis does not provide 

any reports for fiscal year 2010. Further, many agency Web sites 

do not maintain a list of bundled procurements as required under 

the 2010 Small Business Act amendments. 

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And finally, by statute, the Federal Procurement Data System, 

otherwise known as FPDS, must collect data regarding bundling of 

contract requirements when the contract price exceeds $5 million, 

including all options. However, the FPDS data is unreliable and incomplete, primarily because of lack of agency reporting and differing agency interpretations and applications of the word bundling. 

The second factor is the agency’s failure to comply with the bundling and consolidation regulations. This failure is nowhere more 

apparent than in agencies’ failure to prepare the required written 

justification for both contract bundling and consolidation as mandated by law. 

For example, just recently I had a client who was one of five 

small businesses that provided a specific set of services to a Federal agency. The agency decided to recompete their contract and 

converted a multiple-award contract into a single-award contract. 

All five incumbents lost the recompete, which has had a significant 

negative impact on their financial health. 

The agency’s justification for the single-award consolidated contract was requested, but my understanding is the agency never 

prepared a justification analyzing the potential negative impact the 

consolidation might have on small businesses. In similar consolidation cases that I have personally worked on, the agencies have simply been unable to provide the required written justification for the 

bundling or consolidated procurement. 

Finally, I would like to address the third factor that in my opinion has hindered the implementation of the bundling and consolidation regulations. This is the lack of recourse for small businesses 

that have been negatively impacted by agency noncompliance with 

the applicable regulations. In this regard, I recommend that Congress provide for an independent review of agency contract bundling and consolidation actions. This review should be conducted by 

an independent review board or office within the government which 

does not have any incentive to justify unsupported agency contract 

consolidations. 

Arguably, the Government Accountability Office, GAO, may be in 

the best position to provide this type of unbiased and independent 

review. This administrative review should be separate from the formal bid protest reviews currently conducted by GAO, and should 

be housed in a different GAO office. At a minimum, third-party 

independent reviews will highlight the fact that most agencies are 

not preparing the required justifications for bundled or consolidated procurements. Moreover, this type of review is critical in the 

face of the growing trend toward consolidation through new government-wide strategic sourcing contracts and related initiatives. 

In conclusion, I think it is evident that agency noncompliance 

with the bundling and consolidation laws and regulations will simply require increased congressional oversight. This is critical to ensure that small business participation in the Federal procurement 

process is protected and that agencies justify the growing number 

of contract consolidations. 

Mr. Chairman, this concludes my statement, and I will be 

pleased to answer any questions that you or members of the Subcommittee may have. Thank you. 

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8 

Chairman HANNA. Thank you, thank you. 

Our third witness today is Ms. Gloria Berthold Larkin, testifying 

on behalf of Women Impacting Public Policy, or WIPP, where she 

serves as Educational Foundation vice chair. WIPP is a nationally 

nonpartisan public policy organization advocating on behalf of its 

coalition of 4.7 million businesswomen. Ms. Larkin is also president 

of TargetGov, a company that helps small businesses sell to government customers. 

Ms. Larkin, thanks for being here and you may begin. 

STATEMENT OF GLORIA LARKIN 

Ms. LARKIN. Thank you, Chairman Hanna and Ranking Member 

Meng and distinguished members of the Subcommittee. I appreciate this opportunity to testify this morning. My name is Gloria 

Larkin, and I am president of TargetGov. And I also serve as the 

vice chair of the Educational Foundation of Women Impacting Public Policy. 

I have been in business since 1997, and my firm helps companies 

of all types pursue, propose, and win Federal Government contracts. As a result, we do have specific experience in the challenging world of bundled and consolidated contracts. 

I am here today representing Women Impacting Public Policy, or 

WIPP, a national, nonpartisan public policy organization advocating on behalf of its coalition of 4.7 million businesswomen nationwide, including 75 business organizations. WIPP plays a key 

role in developing women-owned businesses into successful government contractors through our Give Me 5 and ChallengeHER programs. 

In our view, bundling and consolidation continues to hamper 

small business in the Federal marketplace. We believe that contracts that can be serviced by small business should not be subject 

to any form of consolidation. 

It is our recommendation the following actions be taken to minimize unnecessary and unjustified consolidation. First, we would 

like to improve the collection of statutorily required data on consolidation. Second, complete the related regulatory actions. And 

three, increase training and outreach to small business vendors. 

What are these actual barriers to success? According to WIPP 

members, these are the key reasons that they are wary of pursuing 

these large contracts. 

First, it is the time and cost required. It is not unusual for large 

businesses to invest nearly $250,000 in preparation to win these 

government contracts. The timeline is equally large. Vendors must 

enter the market 12 to 18 months ahead of time before the contract 

is actually competed. At that same time, small businesses must 

choose between going to vendor outreach or industry days or making money on their existing contracts so that they can simply pay 

their employees. 

Second, size and bonding questions are major concerns. As an example, let’s take an engineering firm with a size standard of under 

$14 million in annual revenue. Let’s say they are pursuing a consolidated contract worth $100 million as a prime contractor. They 

are unlikely to win because the Federal Government requires that 

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they show past performance of a similar size contract. If they could 

do a $100 million contract, they would not be small business. 

Bonding requirements present similar barriers. As these consolidated contracts increase in size, far exceeding the size standard for 

small business, there is only one real alternative to competition, 

and that is teaming. But teaming itself is fraught with cost, risk, 

and dangers to all parties. The costs involved in teaming must be 

borne directly by the small business, and those costs are not allowable in the contract accounting process. 

And third, winning does not mean that you have actually won 

anything. Should a business or a team be successful and actually 

win a bundled contract, it is only the first step. No money is actually paid on products or services until each awardee further pursues individual task orders on a competitive basis. Therefore, the 

winners have simply won the right to compete over and over and 

over again with other winners. 

The growth of consolidated contracts essentially force small businesses to form complicated teaming agreements with a wide variety 

of partners. All told, these enormous bundled contracts inherently 

limit small business from competing. 

I will wrap up with WIPP’s following recommendations to the 

Committee. Number one, improve the collection and sharing of 

bundled data. It seems to be a common thread here. To be the honest, I don’t think we actually know how much bundling and consolidation is really happening, and that can’t be good for anyone. 

Let’s complete the regulatory process for bundling regulation. We 

do applaud SBA’s recent October 2nd final rule, but my understanding is that it could take years to implement even after FAR 

Council adoption. 

And number three, let’s increase education efforts of small business vendors regarding the consolidation and bundling process. 

More partnerships are needed between agencies and our business 

community. As new rules and regulations are released, small businesses need to understand the consolidation process, as well as the 

appeal and protest processes for possibly unjustified or unnecessary 

consolidation or bundling. 

It is our hope that our identification of these barriers and recommendations are helpful to your efforts to assist small businesses 

to become successful Federal contractors, thereby supporting the 

economy with the jobs across the Nation that we desperately need 

right now. Thank you, and I am very happy to answer questions. 

Chairman HANNA. Thank you. 

I will now yield to Ranking Member Meng to introduce the minority witness. 

Ms. MENG. Thank you. It is my pleasure to introduce Ms. Margot 

Dorfman. Ms. Dorfman is the founder and CEO of the U.S. Women’s Chamber of Commerce. The Women’s Chamber represents 

500,000 members, three-quarters of whom are small business owners and Federal contractors. Through her leadership this organization has championed opportunities to increase women’s business, 

career, and leadership advancement. Additionally, Ms. Dorfman 

has extensive background in business, including over 10 years in 

executive positions with General Mills and other Fortune 500 

firms. 

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Welcome, Ms. Dorfman. 

STATEMENT OF MARGOT DORFMAN 

Ms. DORFMAN. Thank you. And Chairman Hanna, Ranking Member Meng, and members of the Subcommittee, I greatly appreciate 

being here today, and I am here to testify on behalf of the U.S. 

Women’s Chamber of Commerce and of the millions of women that 

we represent across the United States, along with our 500,000 

members, three-quarters of whom are American small business 

owners and Federal contractors. 

Whenever I am asked to provide testimony on key issues impacting business, I first go directly to our members to receive boots-onthe-ground input. Here is what I heard this week. From Eileen 

Pannetier, Comprehensive Environmental: The Air Force periodically puts out worldwide environmental contracts encompassing almost all of their environmental work. Given the size of these bundled solicitation they are unattainable for small business. 

Jennifer Dickerson of EnRep: The Department of Energy continues to bundle scopes of work stating they do not have the resources to manage smaller contracts and that the risk is too great. 

If smaller scope of work is not segregated out DOE will continue 

to receive an F grade from the SBA in meeting their small business 

goals. There is not accountability by the SBA, the DOE, the primes, 

and unfortunately, the small business contractors suffer. 

Cheryl London with Cherco: Because of bundling we have been 

precluded from any profitable business that the government has for 

our type of work. The jobs are contracted out by agency and facility 

and cover any aspects of construction at those facilities, often for 

years. 

Lynn Sutton of Advantage Building Contractors: The project we 

choose to pursue is the most important decision we can make for 

our business. This economy has left few standing. Bundling contracts is an extreme hardship, especially for the construction industry. 

And I have another member: Contract bundling is more expensive than direct contracting. Fee, G&A, and engineering hours are 

added to the prime’s contract to, quote/unquote, ‘‘manage the sub.’’ 

The sub was working independently and directly with the government prior to the bundling at a lower total cost. 

While this Committee has been active in seeking to eradicate 

bundling and consolidation of Federal contracts, our members 

make it clear. The issues of bundling, consolidation, and the everpopular euphemism strategic sourcing are alive and well in the 

Federal marketplace due in part to the following. 

One, there was a systematic lack of accountability in Federal 

contracting. Year after year, the Federal Government misses the 

required 23 percent mark and also the paltry 5 percent goal for 

women-owned firms and does nothing to end the charade of what 

acquisitions get counted as eligible for small business target, 

underfunds the procurement center representatives, and fails to 

hold senior acquisition and agency leaders accountable for the systemic failures. 

Two, congressional leaders fail to understand that bundling and 

consolidation actually represent decreased competition as many 

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competitive vendors are left out due to the size and scope of single 

competition. 

Three, now we have legislation and rulemaking that claims to be 

the solution for ending bundling and consolidation, but when we 

look at it from our view, these rules simply detail the basis for providing a legal paper trail to justify bundling and consolidation. 

And four, posting an agency’s intent to bundle or consolidate 30 

days ahead of publishing the offer may look like transparency and 

may make for a nice rebuttal to complaints, but if you are trying 

to be a small business keeping up with yet another Federal Web 

site, taking on an agency at the last minute, potentially incurring 

legal fees and potentially running agency-level relationships—or 

ruining them—then when agency acquisition leaders have made 

their strategic plans long, long ago, this is simply just not feasible. 

If you truly want to prevent bundling and consolidation, then 

just say no rather than provide the blueprint for how to justify it. 

Increase the number of and clout of the procurement center representatives, get more influence at the agency’s strategic planning 

stage, require the SBA to provide annual reporting that goes much 

further than the woefully inadequate small business goaling reports, and last but certainly not least, stop shutting down the government. 

I guarantee you the sudden stops and starts, the lack of certainty 

in agency funding, and the lack of accountability that follows this 

sort of mess will absolutely lead acquisition professionals to do 

whatever they can to just let out contracts as fast as possible to 

all the big businesses lined up at their doors ready to take our tax 

dollars as fast as possible. 

And while I am on the subject of shutdowns, you need to stop 

this nonsense. You are killing our businesses. Our members were 

just getting their feet on the ground, and you pulled the rug out 

again. My members have started laying off employees already. 

They have no way to recover the cost of the lost revenues from the 

shutdown. You are hurting their businesses. You are hurting their 

families. You are hurting their employees, their employees’ families, and you are hurting ultimately their local economies. I ask 

that you stand down and open the government today. Thank you. 

Chairman HANNA. Thank you, and I appreciate your frankness. 

Now, we have almost unanimity here, so that is also nice. I am 

going to give Mr. Bentivolio first crack at this, and you may begin. 

Mr. BENTIVOLIO. Thank you very much, Mr. Chairman. 

And thank you all for being here today. This is very important, 

specifically since I went back to my district not long ago and talked 

to some businessmen who—business folks—who said that the government gave a big contract to an organization and they couldn’t 

bid on that even though they originally were part of the bidding 

process, but they were shut out. And then they had a product that 

they could make cheaper, better quality, but they weren’t authorized because the general contractor didn’t—I guess they didn’t meet 

those qualifications for that general contractor. 

And my question is, I guess, does the general contractor get to 

pick and choose who he wants basically? I mean, we like to think 

they go to the lowest bidder, but that is not always the case. It 

would naive to think so, right? 

SBREP-219 with DISTILLER

12 

So what I am asking I guess is, the government has protocols for 

giving minorities preference, veterans preference, those kinds of 

things, but when it goes to a general contractor are they still obligated or can they follow their own rules, make up their own rules? 

Anybody? 

Ms. DORFMAN. I could speak to our members and their experience in this. Essentially what often happens is the prime contractor 

has to come up with a subcontracting plan to include the women, 

minorities, whatever the goals are. Once they go get the contract, 

they come back, they often take that work in-house and do not use 

the firms that they had go through a very expensive process of providing them a quote of how much the work would go. 

Mr. BENTIVOLIO. Wow, I can see your point. I can see your point. 

It is pretty unfair. 

Mr. Burton, I had a question for you, but I can’t remember exactly what it is, but I got the impression, somebody said something 

about strategic sourcing, and, Mr. Burton, have you noticed anything in the process where a government bureaucrat, for instance, 

you know, likes to pick and choose winners and losers, or something along those lines? I am trying to think something you said. 

I made a note here, but I can’t remember exactly the rest of the 

note. 

Mr. BURTON. Well, strategic sourcing is clearly a very popular 

initiative right now, and there is nothing wrong with strategic 

sourcing. When I was in the government I led an initiative on strategic sourcing back in the 2005 timeframe. 

The problem is, I think the government is pressing rather aggressively to do everything in a consolidated fashion. It may have 

short-term savings, and that is appealing, but I am convinced that 

strategic sourcing, if it is not done correctly, will actually result in 

higher prices for the taxpayers in the long run. 

For example, there are many vehicles that are being used right 

now where the small business participation rate will decrease dramatically once the contracts are consolidated. In the long run, I 

think there will be fewer small business participants and less competition when these contracts are recompeted, say 5 years from 

now. And I think, as you know, less competition usually results in 

higher prices. 

So I think in the long run, the strategic sourcing effort taken to 

the degree it is being taken will actually increase costs for the 

American taxpayers and less opportunities for small businesses. 

Mr. BENTIVOLIO. Okay. And I do remember now. You found some 

abuses in the program. And there are protocols to remedy when 

somebody hollers foul, there was something you said about a limit 

on finding justice in the system, I guess. 

Mr. BURTON. Well, small businesses really have no recourse. And 

yes, agencies are simply not following the rules. I was actually, 

when I moved to the private sector, rather startled by how much 

noncompliance there is. And when I asked for written justifications 

from agencies that they need to do by law to support their consolidated procurements, they were unable to provide those justifications. They don’t exist. And I think this is rampant throughout all 

of the agencies. That is disturbing. 

SBREP-219 with DISTILLER

13 

Second, small businesses when confronted with that type of situation really have no choice but perhaps to file a pre-award bid protest, which is very expensive, and oftentimes they don’t want to do 

it. They feel like it is going to irritate the agency. They probably, 

if they irritate the agency, won’t get the award in the final analysis. So they don’t really want to do a pre-award bid protest. 

That leaves them without any recourse. And I do think there 

needs to be some type of more informal independent review available just to look at whether or not the consolidated procurement is 

justified and whether or not it has a negative and unjustifiable impact on small businesses. 

That review could be limited, fairly narrow in scope, where the 

GAO bid protests usually get involved in a number of different 

issues. And quite frankly, the pre-award bid protest usually results 

in a negative finding for contractors in situations such as this. 

Mr. BENTIVOLIO. Thank you very much. 

I see my time has expired, Mr. Chairman. Thank you. 

Chairman HANNA. Ms. Chu. 

Ms. CHU. Thank you, Mr. Chair. 

I want to commend all of the panelists because you gave a very 

clear picture of a system that seems to have broken down. 

And, Mr. Burton, I wanted to follow up on some of the things 

that you said about lack of reliable data and lack of an enforcement 

mechanism. You said that there was a lack of reliable data on how 

much bundling and consolidation is going on and that the agencies 

are not even giving their justification for bundling, and it is hard 

to even fix the problem when we don’t even know how much of it 

is going on. 

So moving forward, how can we incentivize agencies to accurately 

report the data? Is self-reporting the best way to do it? How can 

we accurately measure the extent of bundling and consolidation 

that has occurred in the last 15 years? 

Mr. BURTON. I think it is a very difficult challenge. The data in 

FPDS has always not been terribly accurate. What strikes me on 

this topic is that there is in many cases no data, and I think as 

far as data is concerned, this area has some of the worst data of 

anything in the Federal Procurement Data System. So we are dealing with a very significant problem. FPDS probably will never have 

100 percent accurate data, but the problem here is the total disregard for the requirements to report bundling. 

And I think, first, we need to have the responsibility and accountability in agencies centralized in one office. I would recommend that be the senior procurement executive. Right now, 

there are different people in the agencies responsible for bundling 

versus consolidated procurements. It makes no sense whatsoever. 

So I would recommend, A, just one definition. I don’t think we 

need two definitions of bundling and consolidated procurement. 

And then I think that you need to centralize within the agency 

somebody to be accountable. And what we did in some instances 

was actually hold their feet to the fire and have this as an element 

of their performance appraisal. In some instances that did get attention. 

And I think this is serious enough that I would actually be that 

prescriptive if I were Congress, I would be that prescriptive with 

SBREP-219 with DISTILLER

14 

respect to holding accountable officials. First of all, having someone 

that is a single point of contact, and if it is not the senior procurement executive, it still should be a very high-level official within 

the government. And then to have that official responsible to report 

to Congress, to have that official maybe judged by their performance in this area for purposes of their performance appraisal. 

I think that is certainly a place to start. I will say that I think 

this is going to be a very difficult problem to correct, though, no 

matter what oversight Congress exercises. But the need for oversight I think is very clear. 

Ms. CHU. And what is really evident is that there is really no enforcement mechanism whatsoever at this point. That is what I understand, right? And what kind of enforcement mechanism would 

there be to ensure that agencies comply on this? 

Mr. BURTON. You know, one thing I think is a real challenge, and 

I noticed this when I was in the government. Certain agencies 

don’t necessarily like to say that other agencies are doing a poor 

job. And I found that true with the Small Business Administration, 

which is actually, as you know, headed by a political appointee, 

and the other agencies in the Federal Government are headed by 

political appointees. And one thing I found that was very difficult 

was to get agency political appointees to criticize agencies headed 

by other political appointees. 

That is why I am recommending that the review and the identification of problems in this area be housed somewhere else. And I 

think you need to get it out of SBA in the final analysis, and I 

think it needs to go, and I can’t think of any other organization 

that is viewed as independent and as objective as GAO. And that 

is why I think GAO needs to set up a separate office to actually 

conduct these reviews and in appropriate cases hold the agencies 

accountable. They do a pretty good job on them. 

Ms. CHU. And I was also shocked by the fact that small businesses have so little ability to appeal these actions or to challenge 

any decision; that they have to demonstrate. It is hard to demonstrate standing or protest in a timely fashion or have a lack of 

jurisdiction on the part of the protest. Could you expand on that, 

on how we could fix this? 

Mr. BURTON. That is very true. Your points are very well taken. 

And really the only recourse that is available to a small business 

would be what is called a pre-award bid protest. But oftentimes in 

that situation the small business does not have a lot of information 

necessarily to challenge the agency decision to consolidate the procurement. Some people will tell you, though, well, they do have recourse. They can take it to GAO in a pre-award bid protest. These 

tend to be very expensive. As I mentioned, small businesses are reluctant that, you know, they are worried that there might be some 

type of retribution if they did file such a formal procedure, which 

is very public. And it is very expensive. 

And what is really disturbing is that the cases that I am familiar 

with have resulted in negative decisions for small businesses because an extraordinary amount of discretion is afforded the agencies in making these determinations whether to consolidate or not. 

And even if the agency can show savings, and they might be able 

to show savings, I don’t think the savings are significant in many 

SBREP-219 with DISTILLER

15 

cases, and I think that the interests of small businesses should be 

paramount and should be actually weighted heavier than any secondary savings that might be realized by the agency. 

Ms. CHU. Thank you. I yield back. 

Chairman HANNA. Ms. Clarke. 

Ms. CLARKE. I thank you, Chairman Hanna and Ranking Member Meng. 

And I would like to thank our witnesses today for sharing your 

expertise and your testimony. 

I would like to take a moment to say that I understand the significance and the gravity of this extremely important issue facing 

our small business community and have myself been very vocal on 

the need to address the inherent disregard for small business opportunities in bundling, especially on minority and women-owned, 

veteran-owned small businesses. Given the seriousness of this 

issue, I truly wish this hearing were occurring under normal circumstances, however, with our Federal contracting and procurement agencies present here today to hear your testimony. 

However, the current congressional climate we are confronted 

with could not be any less ideal, indeed harmful for our small business community and our Nation. With all due respect, Mr. Chairman, we are now in the 10th day of a Republican-forced government shutdown, which has already cost our still recovering economy $1.6 billion to date at a rate of $160 million daily. 

In my district alone, the Republican-forced shutdown has cost my small business constituents nearly $800,000 in SBA approved 7(a) 

loans and 504 real estate and equipment loans. These are loans 

that are needed to sustain and grow small businesses that are the 

engines of our local, State, and national economy. 

So I find it ironic that we are having a hearing regarding issues 

in the bundling process when the very Federal Government that is 

at the heart of this discussion is essentially nonoperational. Bids 

that have been submitted are not being processed; payments for 

completed work are not being processed; and smaller contractors 

who don’t have the cushion to survive a prolonged shutdown are 

laying off workers and dipping into lines of credit just to survive. 

So again, while I understand that this is a very important issue, 

I am having a bit of trouble concentrating on the trees for the forest. So perhaps you are prepared to discuss this today, but I have 

a question, a very simple one. Given the current environment, it 

is critical that we hear and understand what you are hearing regarding the impact of this shutdown on your membership and the 

damage that it is doing to our small business community. 

And I thank you, Ms. Dorfman, for including at least your understanding in your comments. But I am open for our other folks who 

have testified here today to just share with us, because I think it 

is critical we put this in context. 

Ms. LARKIN. May I? Gloria Larkin, representing WIPP. We are 

in our conference, our annual conference right now, so yesterday 

we had the advantage of having a room full of businesswomen raise 

their hands and indicate how many companies had received stopwork orders, putting their staff, their employees out of work. 

We are living it right now. I have a client in Tennessee who has 

an $8 million payment that they are waiting on from the governSBREP-219 with DISTILLER

16 

ment. They have to lay off their staff because they don’t have cash 

flow to run. 

So this is hitting us deeper than anyone imagined. My staff, my 

personal staff in my business, their spouses are employed by the 

government, and they are wondering if they are going to be able 

to make house payments now. 

Ms. CLARKE. Thank you. 

Ms. DORFMAN. If I could just add, I have a member here today 

who her subcontract was absorbed into the prime because it would, 

quote/unquote, ‘‘be cheaper.’’ And the other issue that really impacts women especially is that we don’t have access to capital. We 

talk about lines of credit, but a lot of my members can’t get lines 

of credit or loans for their business without the husband’s signature, and so they don’t have that cushion at all. They can’t plan. 

When you have a shutdown and you need to fill in the gaps, you 

can’t do that if you don’t have access to the capital you need. So 

there is just levels and layers of challenges with this whole shutdown. Thank you. 

Ms. BEAUFORD. Juanita Beauford, PTAC of Delaware. And I 

think that I speak for all the PTACs across the country, but in my 

State of Delaware we are seeing similar things, termination for 

convenience. We are seeing delay in contract, no task orders issued 

on contracts that have been awarded; layoffs of staff people by our 

small businesses. So I don’t think that is much different than any 

other program or PTAC across the country, and we assume it is 

going to just get worse as it goes on. 

Ms. CLARKE. I thank you. And I yield back. 

Chairman HANNA. Thank you. 

Ms. Dorfman, you said something I found interesting, and that 

is that in your written, and in your testimony here today, you mentioned that you thought that the whole idea of bundling was somehow misguided, that it might just be let go away. And if I have 

that correct, maybe I do not, but I found it interesting, there is almost unanimity in terms of how people feel about the way this is 

handled. Is it the case that if the rules were actually followed that 

there are enough rules in place to do what it is we all want to see 

done? Anybody can answer that. Or is it an enforcement issue? 

Ms. DORFMAN. Well, I believe a lot of it is an enforcement issue 

and there could be improvements upon the language to strengthen 

the enforcement. What I don’t see is a top level-down commitment. 

Where are the heads of the agencies? Why aren’t they saying to 

their people down below, you must make your small business goals, 

you must make sure there is due access to small businesses to 

gather these contracts and perform on them. What people don’t 

really think about is, they are thinking, oh, we are going to save 

money this way, but the reality is if you cut out competition, you 

know, fair market trade, then the taxpayer is going to pay more. 

Chairman HANNA. Right. And the word was used task orders, by 

Mr. Burton, I think. Was that you? 

Ms. LARKIN. Me. 

Chairman HANNA. Oh, thank you. That is just a different word 

for change order. But it is different for you? 

Ms. LARKIN. No. 

Ms. BEAUFORD. No. 

SBREP-219 with DISTILLER

17 

Chairman HANNA. What we are really describing here is a way 

for contract officers—this may be overly simplistic—but to make 

their life easier and actually limit competition by simply giving 

work to the people that are already in front of them, people that 

they have experience with, people they know are large enough, 

therefore providing the least opportunity for problems in terms of 

the work, or maybe in their workload. Is that somehow fair? 

Ms. LARKIN. I would like to answer that. Gloria Larkin. About 

10 years ago, we were spending about $220 billion and we had over 

100,000 people employed in contracting and acquisition handling 

that workload. Today we are spending over $500 billion and we 

have fewer, I believe, than 40,000 people in the contracting and acquisition workforce. It is simple math. They have to have larger 

contracts managed by fewer people. 

It is not a fact that these folks aren’t doing their job. It is a fact 

that they have too much to do with too large of contracts. So one 

of the solutions to this is to take a look at our professional contracting and acquisition staff—who are not contractors, by the way. 

We have gone that route and we have contractors making decisions 

about what other contractors are going to get the contracts. Sounds 

a little crazy in the government contracting market. 

So it is a matter of having enough professional contracting and 

acquisition staff employed by the government to manage these 

unbundled contracts. 

Chairman HANNA. Mr. Burton, would you like to speak to that? 

You get the allegation. I don’t need to repeat it. And I am sure you 

are right. I just would like your opinion, Mr. Burton. 

Mr. BURTON. Let me address the task order issue because I think 

this is a very significant issue. Task orders are actual contracts, in 

effect, that are awarded under an umbrella contract. We see many, 

many more of these types of multiple award contract vehicles 

where there is a contract in place and agencies then submit task 

orders for products or services under those big umbrella contracts. 

The GSA schedules are the best example of where you have an umbrella contract, and then many task orders are submitted by various agencies under that. 

The accountability for task orders is something I am very concerned about. In 2010, Congress did address this issue in amendments to the Small Business Act, and they made it very clear that 

written determinations for consolidation are required. What is not 

clear is whether written justifications are required for task orders 

under that larger contract. 

And I think that clarity is very important here, because some 

agencies I think are playing games with respect to these definitions, contract versus task order, and they are saying, well, we can 

consolidate task orders underneath the umbrella contracts. 

Chairman HANNA. What you are saying is that we are basically 

hurting ourselves by eliminating competition and in fact even allowing opportunities for corruption, perhaps. 

Mr. BURTON. Well, I don’t know. But, I mean, I think this is 

something that can be—— 

Chairman HANNA. Sure. As an aside, I was in construction for 

30 years, did over 3,000 projects, and I have seen this many, many 

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staffing. Lack of accountability. The idea that we actually let this 

happen and there is nobody watching over people in a way that 

makes them accountable for what are billions of dollars worth of 

expenditures. 

I am going to yield to Ranking Member Meng. 

Ms. MENG. This question is for Ms. Beauford, but anyone is welcome to answer. 

Your association has staff that works continuously with small 

businesses trying to enter the Federal marketplace. What is their 

experience regarding how bundling affects a business’ ability to 

compete for contracts? And if there is a belief that a contract has 

been improperly bundled, what guidance or advice do you give 

them? 

Ms. BEAUFORD. I will give you an example. Aberdeen Proving 

Ground consolidated four commands, their IT, which ended up 

being over $5 billion, something like that. We put a team of six 

small businesses together to go after the small business suite 

under that consolidated contract. We spent 18 months. When the 

contract was finally awarded, it was awarded to the large companies, and as of July they had still not awarded the small business 

suites. 

Now, this has been over 2 years for that. What we found is that 

as we went further and further in the process, modifications kept 

coming out on this contract, and it was pushing the small business 

owner further and further away from competing for it, making it 

more and more difficult. 

So they are very aware of the consolidation. I understand that 

Ms. Larkin has spoken about teaming. That is not the optimal way 

we would like to go, but in this environment we try to counsel a 

business more on teaming because it is better to get a piece of the 

pie than none at all. 

And if I can go back and mention what Mr. Burton said, I also 

find that as we are having a mass exodus of contracting officers 

from the Federal Government, we are also having an influx of very, 

very young people taking their place. And contracting takes sometimes decades to master, so you are going to find an increase in 

protests because people really don’t know what they are doing, and 

with no recourse, as Mr. Burton said, for the small business. When 

they do try to complain, you know, it is just a big, if I may say, 

mess on their part. That is an example of what we have dealt with, 

with consolidation. 

Ms. MENG. A question to Ms. Dorfman. There are various factors 

that are taken into account when determining when bundling and 

consolidation are allowed. However, an agency can still bundle or 

consolidate goods or services if they find that it is necessary and 

justified. While there are still requirements to procure goods 

through these methods, have you found that agencies are overusing 

this tool to circumvent the safeguards that exist to prevent abuses? 

Ms. DORFMAN. Absolutely. It appears that it has become quite 

textbook to go ahead and set it aside for the big firm without consideration for small firms, and so there is definite overusage of 

that. 

Ms. MENG. I yield back. 

Chairman HANNA. Mr. Bentivolio. 

SBREP-219 with DISTILLER

19 

Mr. BENTIVOLIO. Thank you very much, Mr. Chairman. 

You have given me a really good overview of the problem and the 

situation. I have two questions. Once a contract is bundled, is there 

any way to unbundle it? No? Ms. Dorfman? 

Ms. DORFMAN. The PCRs are supposed to be looking out for those 

contracts that are coming off that their intention is to bundle and 

pull them down and pick them apart and set aside parts of that 

for small businesses. The challenge that there is, there are not 

enough PCRs for the country, and it is not funded well, so if we 

don’t have the right kind of staffing—I think part of the conversation here has been we need more staff, but we need the funding 

to go with it. And when you look at the IDIQs, that is part of the 

issue as well, that there will be some contracts that are set aside 

and then suddenly there is no funding for that portion of the IDIQ 

and the small business is out contracts. So I definitely see some 

issues. 

Mr. BENTIVOLIO. Mr. Burton? 

Mr. BURTON. Early in the process you can definitely unbundle, 

and that is the whole idea of having the review and the justification done upfront. And that is the remedy to, if the agency feels 

there has been unjustified bundling, then it needs to unbundle it 

and uncouple it before the solicitation actually goes on the street. 

Mr. BENTIVOLIO. And you need a mediator, it sounds like, when 

a small business is unjustly discriminated against in a bidding 

process, correct? 

Mr. BURTON. Well, I think that it would be helpful to have an 

independent reviewer, and I think you could use that word mediator, somebody outside of the agency process that does not have a 

vested interest in the procurement process—— 

Mr. BENTIVOLIO. Do you have any recommendations for who 

would do that? 

Mr. BURTON. Well, I have struggled with that, and the General 

Accountability Office, the Government Accountability Office is the 

one that occurs to me probably is best positioned to do that. I am 

sure there will be some resource issues in that regard that will be 

raised as an obstacle. But I think a separate office from the bid 

protest group at GAO. And there are teams within GAO, and I 

think the acquisition team might be a very good one to actually 

conduct this type of independent review. 

Mr. BENTIVOLIO. Okay. Do you think this committee should pursue legislation on bundling and consolidation, and what should 

that legislation look like or incorporate? 

Mr. BURTON. I think that the answer is yes. I think that legislation is required. One thing I found when I was in the government, 

it did seem that agencies paid attention to actual statute more so 

than other memos and regulations even. 

So I do think legislation is required. I think the legislation 

should actually specify the independent review board or office that 

will conduct reviews of bundling and consolidation. I think that to 

simplify things there should be just one definition. I would use the 

word consolidation because I think it is broader than bundled. And 

I think I would just have one definition. 

And actually, you know, the definitions are not that complicated. 

They are fairly clear. But to simplify things even more, maybe we 

SBREP-219 with DISTILLER

20 

should just have one definition, and I think consolidated procurement is what I would go with. Because agencies are trying to argue 

that this isn’t bundling, and so therefore we don’t need to have a 

lot of these protections and justifications and so forth, this is mere 

contract consolidation, not technically bundling. I think we need to 

do away with that whole distinction because consolidated procurements alone are hurting small businesses dramatically. It doesn’t 

have to necessarily be a bundled procurement where the agency 

has to show that it is actually unsuitable work for small businesses. In most instances work is suitable for small businesses. 

Mr. BENTIVOLIO. Would you incorporate in that legislation a 

process where we have that mediator step then in case of a protest? 

Mr. BURTON. Yes. 

Mr. BENTIVOLIO. Because I am not interested in making the government any bigger and putting watchers over watchers, you know. 

I am not interested in doing that. It just costs taxpayers money for 

a job they should be doing anyway, right? They should be objective 

in the way they pursue, and if it is—well, anyway, would you put 

that in there? 

Mr. BURTON. Yes, sir, I would. 

Mr. BENTIVOLIO. Streamlining that process, make it easier for 

veterans and women and anybody else that wants to protest? 

Mr. BURTON. And I would use the word challenge. 

Mr. BENTIVOLIO. Challenge. 

Mr. BURTON. I don’t think I would use the word protest because 

it immediately brings up the formal process at GAO. I think you 

want this to be much more simplistic. It is just a challenge with 

respect to the agency decision to consolidate and reduce opportunities for small businesses. I don’t think you have to hire a lot of staff 

in order to do this simple review, but I do think it needs to be 

somewhat independent of the actual agency, because my experience 

is the agency will support the contracting official’s decision to consolidate. 

Mr. BENTIVOLIO. Great. Thank you very much, sir, and I appreciate your time here today, all of you. Thank you very much. 

Mr. BURTON. Thank you. 

Chairman HANNA. A couple things. You used the word vested interest, which opens up a whole number of issues in my mind in 

terms of contracting. And Ms. Larkin, they are understaffed, right? 

Ms. LARKIN. Uh-huh. 

Chairman HANNA. But yet even though they are understaffed, 

that doesn’t necessarily solve the problem if it is a fundamental 

problem in terms of how they view their job and perceive the opportunity they have to make their job easier rather than harder, 

so that I don’t think you can lay it all on that. The numbers suggest that it is a policy that is avoided at all costs, that there is no 

incentive for them to pursue unbundling or simpler, easier, more 

competitive numbers of contracts, if that were the case. You don’t 

have to agree with me. 

What do you mean, Mr. Burton, by vested interest? Because one 

would assume that somebody awarding a contract would have no 

vested interest, although I personally think that—I want to hear 

your version or anyone’s version of why the process is naturally 

SBREP-219 with DISTILLER

21 

going towards this, something other than just a lack of number of 

people to do it. Mr. Burton, am I clear in my question? 

Mr. BURTON. Yes, sir. I think that the acquisition workforce issue 

is significant. I do think that that is certainly a major issue here 

with respect to having fewer contracts to award, having fewer contracts to manage. There is enormous pressure on the acquisition 

workforce to do things quickly. Strategic sourcing is something that 

has been embraced by the administration as the number one acquisition reform agenda item, and there is a lot of pressure to produce 

with respect to strategic sourcing. That equals consolidated procurements. 

And all of this combined is giving contracting officers great motivation to justify the consolidation. It is usually done on the basis 

of cost savings, and in some instances there may even be some 

short-term cost savings. 

What is happening, sir, is that agencies, agency officials within 

the procurement community do not necessarily want to challenge 

a contracting officer’s determination. They are very deferent to the 

contracting officer. But in most instances I do not think there is 

supporting data, I do not think there is actual cost analysis available, and just asking for that information to be produced I think 

will show the seriousness of this problem. 

But you are in an environment right now, for a number of factors, as you point out, separate and apart, just related to the lack 

of acquisition personnel, but there is a number of factors pressing 

for consolidation, and that is clearly hurting small businesses. That 

is why I think Congress will have to be very aggressive on this subject and will have to exercise increased oversight. 

Chairman HANNA. Interesting. 

Ms. DORFMAN. If I may, I do think there is a challenge with the 

lack of workforce, especially now where we are losing so many seasoned professionals. But I would like to remind everybody here that 

an investment in small business, which would mean putting funds 

into some of these mechanisms to protect small business and ensure small business growth, you know, the SBA, any of the small 

business, it is an investment. When you grow small business, you 

are going to grow employment, you are going to grow your tax 

base, and it just becomes a win-win-win. 

So instead of looking at this is going to cost the country, I think 

this is really key that we invest in small businesses so that we can 

grow our tax base, we can ensure that we have growth in jobs, and 

that, I believe, will turn the country around from an economic 

standpoint just alone. 

Chairman HANNA. Sure. So there is a momentum, an inertia involved in this that is moving towards the larger, moving towards 

less work for the procurement officer for a whole host of reasons 

that by definition, and we don’t have to, I don’t think anyone would 

argue this, but we eliminate or reduce competition just by tasking. 

You are actually saying that someone gets a project but doesn’t 

have to necessarily have competition, and that is a great benefit to 

the particular contractor, but everybody else who might do it 

cheaper, better, faster, or who is smaller, would have that opportunity if we just bundled it. 

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So in terms of the people it might take or the outside board to 

look at this, people it might take to do this work that we would 

all be happier with if it were unbundled, I would suggest that there 

might be opportunities with the tens or hundreds of billions of dollars we spend that just the increased competition alone may help 

pay for an enormous portion of that. That is a conjecture, but what 

do you think of that? 

Ms. DORFMAN. I agree. 

Ms. LARKIN. Increased competition would be a wonderful thing. 

In the SeaPort-e contract, which is the Navy contract, largest bundled contract in the history of the United States, $50 billion since 

its inception in 2004, do you realize that 20 companies have shared 

$29 billion of that contract? There is no competition there. 

Chairman HANNA. I think Juanita mentioned that in her testimony, too, or in her written testimony. 

Ms. LARKIN. Thank you. 

Chairman HANNA. I could keep you here a lot longer, but, I 

mean, we have kind of run through this. Since we do have a couple 

minutes, would anyone like to say anything else that may be a 

question that I haven’t asked or someone else hasn’t asked that 

you find germane and would like to get out there? 

Mr. BENTIVOLIO. Mr. Chairman, yeah, may I? 

Chairman HANNA. Yes. 

Mr. BENTIVOLIO. Ms. Dorfman, you said earlier that enforcement 

of subcontracting from a general contractor, they had certain protocols that they had to follow, they put a plan in on how they are 

going to fulfill that contract, right, like an operational plan or a 

build plan, a business plan, if you will? All right. And they don’t 

follow it. Is there any penalties for that, would you suggest? 

Ms. DORFMAN. There is no teeth right now in that, so they can 

do that. 

Mr. BENTIVOLIO. Okay. So Mr. Burton suggested legislation, 

some things we should put in some legislation. Would you recommend putting some teeth in it to force, what, to force the—— 

Ms. DORFMAN. To ensure that they are following the subcontracting plan, that when they have engaged with a small business 

to be part of the contract, and when the contract is awarded that 

they do use that small business for that contract. 

Mr. BENTIVOLIO. Okay. I am on another committee, Oversight 

and Government Reform, and we are investigating government 

agencies for some abuses of their power. Now, it really comes down 

to, though, if a contractor is not fulfilling or following his business 

plan for that particular contract and the government agency is not 

enforcing it, don’t you think we should have some teeth for that 

government agency? I mean, it makes sense to me, right? I mean, 

if they look the other way and choose not to enforce it, which is 

happening so often in this—well, that has come to light in the last 

several months—wouldn’t you think that, you know, we should 

have some recourse? Because right now all they do is retire and 

say, thank you, Fifth Amendment. 

Ms. DORFMAN. There definitely has to be a mechanism to ensure 

that the small businesses are getting their portion of that contract. 

So I would agree. 

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Mr. BENTIVOLIO. So you would recommend that we put some 

teeth into forcing the government agencies to provide proper oversight, which is their responsibility to our taxpayers, correct, as well 

as the contractor that took that bid? 

Ms. DORFMAN. We do need mechanisms in there that would ensure that the agency is doing their due diligence as well as the 

prime contractor living within the plan, keeping the plan, the contracting plan. 

Mr. BENTIVOLIO. But there could be changes and, you know, they 

may find maybe that subcontractor didn’t, you know, isn’t going to 

fulfill, they found out something new, and they have to change it, 

but there should be some protocol for change, right, correct? I 

mean, legitimate reasons. They could say, well, in this particular 

case we can’t use this subcontractor, things change. 

Ms. DORFMAN. Things may change, but unfortunately this is a 

systemic issue where it happens frequently where our small businesses, they fulfill a piece of the precontract, the pre-award. I 

mean, they have to go and put together a proposal for the prime 

contractor. The prime contractor wins the award and then systematically does not use the small business that took the time and 

money from, you know, from their pockets. I mean, they are basically robbing the small business because the small business has 

paid, has invested lots of money in preparing this, and then they 

get nothing at the end of it. 

Mr. BENTIVOLIO. So we need—— 

Ms. DORFMAN. There needs to be some mechanism in there to ensure that the small business is getting the part of the contract that 

originally was put there. But so often they just take it in-house. 

Mr. BENTIVOLIO. For small business we should write some legislation that opens the door for small business and keeps the door 

open, right? 

Ms. DORFMAN. [Nonverbal response.] 

Mr. BENTIVOLIO. Great. Thank you very much. I appreciate your 

time today. 

Ms. BEAUFORD. Can I speak to that for a minute? 

Mr. BENTIVOLIO. Sure. 

Ms. BEAUFORD. There is some regulations right now for prime 

contractors to use the subcontractors that are written into their 

subcontracting plan, and if they don’t, they have to give justification as to why they are changing. They can change, but it is already regulations out there supporting that. 

What I find is that, even with the PCRs, who should have oversight over these contracts, they have a grieving process with the 

agency. However, in the final analysis the agency will make the 

final decision. If we are going to have the PCRs review an agency, 

we need to give them authority to have final decision on that. But 

if the contracting officer has the final decision on whether or not 

this contract is going to go to this company or not, even though I 

come in as a PCR and tell you that this is really not the way this 

should go, it doesn’t matter. They don’t have any authority, the 

PCRs, over the agency. 

Mr. BENTIVOLIO. And improve the challenge process. Thank you. 

Chairman HANNA. Thank you, everyone. I want to thank Emily 

Murphy, our chief counsel. She does a great job. 

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Chairman HANNA. If there are no further questions for the witnesses, I want to thank you for being here today. 

Seventeen years after the committee passed the first law addressing contract bundling it is simply inconceivable that these 

agencies are not correctly identifying bundling and consolidating. 

Bundling and consolidation pose threats to competition and the viability of small business, our small business and our industrial base. 

So we owe it to the taxpayers to make sure that any contract bundling is justified and mitigated. I look forward to working with 

Chairman Graves and other members of this committee to address 

these problems that we learned about today. 

Thank you very much, everyone, for being here. 

I ask unanimous consent that members have 5 legislative days 

to submit statements and supporting materials for the record. 

Without objection, so ordered. 

This hearing is now adjourned. Thank you. 

[Whereupon, at 12:55 p.m., the subcommittee was adjourned.] 

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A P P E N D I X 

Testimony of 

Juanita H. Beauford, President 

Association of Procurement Technical 

Assistance Centers (APTAC) and 

Program Manager of the University of Delaware PTAC 

To a Hearing of the U.S. House of Representatives’ Small 

Business Committee’s 

Subcommittee on Contracting and the Workforce 

Chairman Hanna, Ranking Member Meng, and distinguished 

Members of the Subcommittee, thank you for the opportunity to 

testify today. I am honored to speak before you on behalf of the Association of Procurement Technical Assistance Centers and the 

small businesses we serve across the country. 

First, I would like to express my gratitude for your leadership 

and efforts on behalf of small businesses. 

My name is Juanita Beauford. I am President of the Association 

of Procurement Technical Assistance Centers—APTAC—which is 

the professional organization of the 98 PTACs nationwide. I am 

also Program Manager of the University of Delaware PTAC. As you 

may know, the Procurement Technical Assistance Program was 

created by Congress in 1985 to help small businesses compete for 

federal, state and local government contracts. It is funded and administered through the Defense Logistics Agency and supported by 

state or local governments, educational institutions, or non-profits 

which must provide a non-federal funding match of up to 50%. Our 

purpose is to assist local small businesses at little or no cost by 

preparing them to become capable government contractors, on the 

belief that a broad base of small business suppliers provides the 

highest quality and best value to our government agencies and at 

the same time creates a strong and vibrant economic base for our 

communities. Last year we helped over 70,000 small businesses 

win more than 112,000 government contracts valued at over $14.1 

billion. 

We applaud your efforts to re-examine the issue of ‘‘bundling’’ 

and ‘‘consolidation’’ of federal contract opportunities. Many of our 

members—procurement counselors across the country—report frustration and concern among their small business clients about dwindling bid opportunities as agencies increasingly rely upon larger acquisition mechanisms such as Strategic Sourcing, Government-wide 

Acquisition Contracts (GWACs), Multi-Agency Contracts (MACs), 

Omnibus ‘‘Single Solution’’ contracts, and multiple year Indefinite 

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Delivery Indefinite Quantity (IDIQ) contracts in addition to more 

traditional bundling and consolidation. There is a clear perception 

that—as agencies prioritize strategies to streamline acquisitions 

and achieve price reductions—the number of solicitations appropriate for small businesses is shrinking significantly, and small 

businesses are disadvantaged generally by lack of access to contracting officers and a trend away from Best Value trade-offs and 

toward Lowest Price Technically Acceptable. 

We cannot quantify the extent to which these perceptions are accurate or the degree to which change is occurring—either for better 

or worse. We have anecdotal evidence and the observation of procurement counselors with many years of experience that small 

businesses are losing opportunities and concerned the environment 

worsening. But as you know, hard data about bundled or consolidated contracts is incomplete and hard to find. Likewise, we hear 

little about efforts to challenge or mitigate consolidation practices, 

despite statutory and regulatory provisions to do so. 

It is a difficult problem. Agencies strive to be good stewards of 

tax dollars, often with understaffed and under-funded acquisition 

offices. Streamlined acquisition tools are attractive because of their 

ease of use and promise of cost savings. I suspect that there is confusion about—or even ignorance of—what constitutes bundling or 

consolidation, not to mention the fact that there are requirements 

that solicitations be accessible to small business wherever possible. 

And it is clear that enforcement of such requirements is simply not 

happening in many cases. 

Simplifying the definition could be an important place to start. 

As new types of contract vehicles evolve, the complexity of the current definitions makes it easier for agencies to find loopholes or 

work-arounds—or simply believe that these definitions do not apply 

to their contracting vehicle. Having different definitions for ‘‘bundling’’ and ‘‘consolidation’’ is itself difficult. Whatever utility was 

once served by the distinction is—I believe—outweighed by the confusion caused. Selecting one team—perhaps ‘‘consolidation’’—and 

defining it simply—ie: ‘‘2 or more requirements of the federal agency for goods or services that could reasonably be provided to or performed for the federal agency under 2 or more separate contracts’’ 

would bring under the umbrella all of the vehicles which present 

barriers to small business. It would also make communications 

about—and measurement of—the issue much easier. 

From there, criteria under which consolidated contracts may be 

considered appropriate and/or require review or justification can be 

determined. Certainly, there are many circumstances in which consolidated procurements may be the best option. But it would at 

least make clear that newer mechanisms like strategic sourcing. 

GWACs, MACs, IDIQs, etc. indeed constitute consolidated solicitations, which is the first step in determining the prevalence—and 

impact—of these practices. 

Simplifying the reporting process—and identifying a better platform for making the information available to SBA’s Procurement 

Center Representatives (PCRs) and the public—could be helpful as 

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mat as an addendum to our written testimony. While the reporting 

requirements in the Small Business Act and Jobs Act may have 

been intended to provide accountability, it appears that they are 

often side-stepped, perhaps because they are so rigorous. Those 

‘‘Justification for Fair Opportunity Exception’’ notices that are posted to FedBizOpps are difficult to find. It is critical that there be 

an ability to track and analyze this information if effective strategies for protecting the ability of small business to participate in the 

federal marketplace are to be developed and implemented. 

Defining realistic enforcement triggers, and providing adequate 

resources to implement them, is also critical. The current situation 

in which enforcement actions are rare—and successful actions 

rarer still—only undermines the current regulations. 

At the end of the day, the real answer—and challenge—is to convince government buyers that their interests can be well served by 

contracting with small business. I don’t believe this problem can be 

solved by case-by-case challenges from PCRs, small businesses or 

trade associations. 

To this end, we encourage the Subcommittee to consider initiatives that could educate agency acquisition staff at all levels about 

statutory and regulatory provisions with regard to bundling/consolidation, including circumstances in which justification are required and provisions allowing small business set-asides, reserves 

and other tools that foster small business inclusion. This would 

also provide an opportunity to emphasize the importance of maintaining a robust base of small business suppliers generally as well 

as the specific benefits that small business contractors can bring to 

individual agency requirements. You understand—as we do—that 

it is false to believe that striving for the lowest possible price or 

the most streamlined contract vehicle necessarily delivers the best 

value to the taxpayer. But contracting officers may not be aware 

of all the benefits that working with small business vendors offers, 

much less best practices for crafting accessible contract vehicles 

and reaching out to the small business community. There are success stories out there—buying activities with strong local relationships (or relationships with local PTACs), and agencies like DLA’s 

Land and Maritime which have energetic small business outreach 

programs. Collecting and highlighting these examples to share government-wide might be helpful. Substantial and widespread training of Contracting Officers on how and why to contract with small 

businesses could be critical to overcoming the current cultural 

trend toward consolidation; buying from small businesses must be 

seen as an easy and appealing option. 

To the extent that APTAC or the PTACs can help on any of these 

fronts, we hope you will call upon us. PTACs around the country 

are proud to collaborate with local federal offices to sponsor outreach events, identify potential vendors for specific requirements 

and support small businesses in their efforts to market and bid. 

APTAC has partnered with DLA Land and Maritime to promote 

their Training, Knowledge and Opportunity (TKO) events and facilitate and distribute recorded webinars on DIBBS and their First 

Destination Transportation and Packaging Initiative (FDTPI). We 

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would gladly work with other agencies to help them open more opportunities to small business. 

Thank you again for the opportunity to appear before you today. 

I hope my testimony has been helpful. I know I speak for all of the 

PTACs when I say that it is a privilege for us to assist small business in the government marketplace, and we are eager to support 

this Subcommittee, the full Committee and the agencies in endeavors that will better utilize this invaluable national resource. 

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Addendum to the Testimony of Juanita Beauford, President 

Association of Procurement Technical Assistance Centers 

Possible reporting format to facilitate tracking of consolidated contracts: 

Require the Contracting Officer (CO) to stipulate up front whether or not his/her requirement constitutes a bundled or consolidated 

contract, and if so, what is the justification. This could be accomplished via a simple yes/no drop-down field in the system used to 

submit solicitations to FBO or in another acquisition tracking vehicle if more appropriate. Language with the relevant definition(s) 

could be included on the form itself as an aid. A second drop-down 

field with the various categories of justification for bundling could 

follow immediately thereafter and be required for any ‘‘yes’’ answer 

to the bundled/consolidated question. 

At the very least, such a mechanism would remove the ability for 

a CO to ‘‘duck the question’’ with regard to consolidation and would 

improve tracking. Regularly publishing a listing of bundled/consolidated contracts—or ensuring that the reporting vehicle is easily accessible and searchable so that others can publish such a report— 

will also increase transparency, allowing small business contractors 

and their supporters to better assess the degree to which they are 

being excluded from potentially appropriate opportunities. 

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1For the purposes of this testimony, consolidation and bundling will both be used to refer to 

the contracting practice of merging smaller contracts into a single larger contract, through bundling will be specifically used when considering the practice of consolidation with a finding that 

the new contract is not longer suitable for small business concerns. 2 15 U.S.C. § 631 

Bungling Bundling: How Contract Bundling and Consolidation Remain Challenges to Small Businesses Success 

Chairman Hanna, Ranking Member Meng, and distinguished 

Members of the Subcommittee, thank you for the opportunity to 

testify this morning. 

My name is Gloria Larkin and I am President of TargetGov at 

Marketing Outsource Associates, Inc., and serve as Vice-Chair of 

the Educational Foundation of Women Impacting Public Policy 

(WIPP). I have been in business since 1997 and my firm helps companies of all types pursue, propose, and win federal contracts. As 

a result, we have specific experience in the challenging world of 

bundled and consolidated contracts. 

I am also here today representing Women Impacting Public Policy (WIPP). WIPP is a national nonpartisan public policy organization advocating on behalf of its coalition of 4.7 million business 

women including 75 business organizations. WIPP plays a key role 

in developing women-owned businesses into successful federal government contractors through its Give Me 5 and ChallengeHER programs. 

In our view, bundling and consolidation continues to hamper 

small businesses in the federal marketplace. We believe that contracts that can be serviced by small businesses should not be subject to any form of consolidation.1 It is our recommendation the following actions be taken to minimize unnecessary and unjustified 

consolidation: 1) improve the collection of statutorily required data 

from agencies to measure the impact of bundling and consolidation 

on small businesses; 2) complete the regulatory actions required in 

the National Defense Authorization Act for FY2013 (P.L. 112–239) 

and the Small Business Jobs Act of 2010 (‘‘Jobs Act’’ P.L. 111–240); 

and 3) increase outreach to small business vendors regarding the 

consolidation and bundling processes. 

As this discussion begins, we value the Congressional direction 

already given on this issue in the Small Business Act (P.L. 85– 

536), which notes that the government should: 

Aid, counsel, assist, and protect, insofar as is possible, the 

interests of small-business concerns in order to preserve free 

competitive enterprise, to insure that a fair proportion of the 

total purchases and contracts or subcontracts for property and 

services for the Government be placed with small-business enterprises...[in order] to maintain and strengthen the overall 

economy of the Nation.2

This is our guiding principle to improve small business access to 

government contracts. We concur that small businesses play a vital 

and irreplaceable role in growing and strengthening the national 

economy and deserve broad access to government contracts. 

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3Daniel Gordon, Office of Federal Procurement Policy. ‘‘Myth-Busting’’: Addressing Misconceptions to Improve Communication with Industry during the Acquisition Process.’’ Feb. 2, 2011. 

http://www.whitehouse.gov/sites/default/files/omb/procurement/memo/Myth-Busting.pdf Lesley 

Field. Office of Federal Procurement Policy. ‘‘Myth-Busting 2’’: Addressing Misconceptions and 

Further Improving Communication During the Acquisition Process.’’ May 7, 2012. http:// 

www.whitehouse.gov/sites/default/files/omb/procurement/memo/myth-busing-2-addressing-misconceptions-and-further-improving-communication-during-the-acquisition-process.pdf 

Changes To Contracting Over the Last Decade 

Federal government purchasing has grown significantly over the 

last decade. According to USAspending.gov, federal spending increased from $220 billion in 2000 to over $500 billion in FY2013. 

Amid this tremendous rise in spending, agencies are consistently 

failing to meet the small business contracting goal of 23%. The last 

time the goal was met was FY2005. On that note, the data for 

women-owned small businesses are equally disappointing. Despite 

a new contracting program and the removal of the dollar caps on 

contracts in that program, as well as WIPP efforts to register more 

than 20,000 women-owned businesses in the SAM database, 

FY2012 marked another year in which the government failed to 

meet the 5% percent goal for purchases from women-owned small 

businesses—a goal it is yet to meet. 

More awarded dollars in federal contracting does not mean more 

money to small businesses, largely because the number of contracts 

awarded has been declining since FY2008. Thus the average contract size is increasing—due in some part to policies like contract 

consolidation and bundling—which limits the number of businesses 

that can compete. This practice harms small businesses and this 

trend, while not surprising, is certainly threatening women-owned 

small businesses, the small business community in general, and 

their long term prospects in the federal market. 

The last decade has not been all bad news. Indeed, there are 

many areas where contracting opportunities and education have 

been improved significantly. For example, WIPP applauds the government’s success in making positive changes in the market research process. We have seen the Sources Sought Notice and Request for Information (RFI) processes improve and grow in just the 

last two years, especially since the Office of Management and 

Budget (OMB) ‘‘Myth-busters’’ memorandums of 2011 and 2012.3

Sources Sought Notices grew from 50 to 70 in a typical month in 

2011 to approximately 1,100 to 1,300 per month in 2013. This increase is indicative of the acquisition community’s efforts to perform mandated market research. Similarly, WIPP has stepped up 

to educate women-owned businesses in the importance of responding to these Notices and RFIs. 

Reports on and Examples in Contract Bundling and Consolidation 

Congressional Research Service (CRS) reports prepared in the 

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4See multiple reports by Kate Manuel all filed under CRS Report Number: R41133. These 

include ‘‘Contract ‘‘Bundling’’ Under the Small Business Act: A Legal Overview’’ and multiple 

updates of ‘‘Contract ‘Bundling’ Under the Small Business Act: Existing Law and Proposed 

Amendment.’’ 5 Brian Friel, Paul Murphy, et al. ‘‘8 Billion in 2013 Opportunities On SeaPort-e Multiple 

Award Contract.’’ Bloomberg Government. Nov. 14, 2013. http://www.bgov.com/news—item/ 

BGflu73ZpTBruuiAEiZ9tQ. NB: All following data on SeaPort-e contract vehicle comes from this 

report. 6Professional Services is the largest category of government spending. Overall, federal agencies spent $77.6 billion on professional services in FY2011, $20 billion more than the next category, research and development, with $57.7 billion. Professional services include financial management services, engineering support, logistics management and office support. 

eral contracting as well as legislative and regulatory changes to the 

underlying law. Key points from these reports include:4

1. Congress recognizes that bundling and consolidating can 

limit opportunities for small business to receive prime contracts. 

2. To combat this limitation, statutory requirements mandate that agencies must: a) conduct market research to justify 

possible bundling; b) provide advance note to incumbent small 

businesses holding contracts that possibly may be bundled; and 

c) use certain procurement strategies for ‘‘substantial bundling.’’ 

3. Consolidation has separate but similar requirements also 

aimed at ensuring all consolidated/bundled contracts are ‘‘necessary and justified.’’ 

4. Protections exist that, if enforced government-wide, would 

keep small businesses from losing access to government contracts. 

5. Legislative action aimed at improving these protections 

has existed in recent Congresses with varied levels of success 

and some regulations from previously enacted legislation are 

still awaiting promulgation. 

Examples of these consolidated contracts (with contract ceiling 

value) in use today include: Department of the Navy SeaPort-e ($50 

billion), Department of Homeland Security FirstSource II ($3.1 billion), NASA SEWP IV ($5.6 billion), and Department of Health and 

Human Services CIO-SP3 ($20 billion). These multi-billion dollar 

contracts are either agency-specific or government-wide contracts. 

Examining the largest, Navy’s SeaPort-e contract, shows that small 

businesses are not getting access to the bulk of the contracts. 

Bloomberg Government reports that the Navy’s Seaport-e vehicle 

expects to award $8 billion via task orders in FY2013.5 SeaPort-e, 

which provides professional services, is the largest multiple-award 

contract (MAC) in the federal government, with almost $50 billion 

in orders since its creation in FY2004.6 Annually, the contract 

averages nearly $6 billion, more than any other MAC outside the 

General Services Administration and Veterans Affairs Federal Supply Schedule. SeaPort-e reflects a larger trend toward consolidation 

in professional services government-wide. 

With nearly 3,000 prime contractors on the contract, with ‘‘hunting licenses’’ to pursue individual task orders, the competition for 

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7 An effort to increase strategic sourcing was highlighted in an OMB memorandum cited below 

and has been a topic of consideration before in this Committee (June 13, 2013). Jeffrey Zients. 

Office of Management and Budget. ‘‘Improving Acquisition through Strategic Sourcing.’’ Dec. 5, 

2012. http://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-02—0.pdf 

task orders is fierce. But structural problems within the contract 

make that competition unfair. 

SeaPort-e, as a cost-plus-fee contract, caps profit to 8% of the order’s value, two percentage points lower than the cap for services 

contracts set by federal acquisition regulations. Many companies 

that ‘‘win the contract’’ never bid on task orders because they cannot run and grow a company on such slim margins. Companies who 

can accept lower margins are taking over more contracts as smaller 

companies who cannot operate on such margins are leaving. Moreover, the SeaPort-e bid and proposal costs are rising, as task orders 

grow shorter, forcing them to compete more often. Limited profit 

margins, increasing competition issues, shorter contract awards, 

and consolidation are ultimately forcing many small businesses to 

leave what should be a lucrative market for all businesses. 

Furthermore, in FY2012, 90% of small business awards on SeaPort-e came through set-asides—task order competitions limited 

only to small businesses. Set-asides accounted for 83% of small 

business wins by value on SeaPort-e from FY2004 through FY2012. 

Small businesses rarely win full-and-open task order competitions 

on Seaport-e, even for orders worth less than $1 million. Only 20% 

of primes won orders, meaning 80% of companies have never actually secured work through SeaPort-e. The top 20 primes alone won 

over $29 billion of the $50 billion in SeaPort-e orders. The result 

is big companies getting bigger and small businesses struggling to 

compete. 

Lastly, Navy buyers are mandated to consider using SeaPort-e 

before creating new contracts for professional services such as engineering and project management support. SeaPort-e is an example 

of a broader trend to increase the mandatory use of MACs government-wide as part of the ‘‘Strategic Sourcing’’ initiative being advanced by the White House.7 Increased mandatory MAC usage will 

force agencies to rely on a small pool of participating contractors, 

which further limits competition. WIPP opposes the implementation of Strategic Sourcing methods without adequate consideration 

and protection of small business concerns. We recognize that increased consolidation and bundling of contracts are symptomatic of 

this Strategic Sourcing initiative. 

Burdens on Small Businesses Caused by Contract Bundling and Consolidation 

According to WIPP members, the key reasons they are wary of 

entering the federal market include: 

Costs Involved: The costs involved in pursuing a consolidated 

contract are astronomical. It is not unusual for large businesses to 

invest $100,000 or even over $250,000 in pursuing these large contracts through the entire proposal pursuit and writing effort. Small 

businesses invest $20,000, $30,000 or more in valuable, nonbillable time to simply write a proposal, not taking into account the 

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8 At a minimum teaming requires companies to: develop trusting relationships, share delicate 

financial information, develop legal documentation as to who is responsible for what, who manages the federal reporting and DCAA accounting and compliance requirements, who manages 

the contract, how each teaming partner gets paid and how/when payments are distributed, what 

happens in the cases of default or substandard performance and a myriad other contract requirements. 

business development and marketing efforts that go into planning, 

positioning, pursuing, proposing and possibly winning a hunting license. 

Time & Effort: In order to be considered as a viable competitor 

in these large contracts, vendors must enter the market 12 to 18 

months before the contract is competed. They must spend time and 

money marketing their business to the multiple layers of decisionmakers. This is difficult because for most small businesses, every 

person must be billable. Marketing and sales costs, however, cannot be billed and therefore, many times are eliminated from daily 

activities. Small business must choose between going to vendor outreach days, attending industry days where specific procurements 

are discussed, and making money on existing contracts. 

Size: Seemingly, an engineering firm, with a size standard of $14 million in annual revenue, pursuing a consolidated contract 

worth $100 million cannot possibly win as a prime contractor. The 

government is prohibited from taking a risk in awarding contracts 

and requires that past performance show work on a similar sized 

contract. An engineering firm, with revenues of $14 million, cannot 

show proof of performing a $100 million contract. If they could, 

they would not be small. As these consolidated contracts increase 

in size, far exceeding the size standard for the small business, the 

burden to respond and win becomes an exercise in expensive 

teaming. 

Bonding: Two US Army Corps of Engineers consolidated con- tracts are coming up this year (FY2014), one for $200 million and 

the other for $300 million. One is set-aside for small business and 

the other is set-aside for service disabled veteran owned small business. On the surface this is an excellent opportunity—$500 million 

for small businesses. It seems hard to imagine that a small construction business with a size standards ranging from $7 million to 

$33.5 million could receive bonding for a contract valued at $200 

or $300 million. 

Teaming: One viable way a small company can pursue and win 

these large consolidated contracts is to team with other small and/ 

or large businesses. This is fraught with costs, risks and dangers 

to all parties. If one business pursues a $200 million dollar contract 

and each company only has a ten million dollar maximum bonding 

capacity, at least 20 or more companies would have to team together. These teaming contracts are intricate.8 The costs involved 

in teaming are unallowable in the federal cost accounting process 

and must be borne by the small business directly. 

Winners and Task Orders: When a small business is successful and actually wins a bundled contract, it is often only a first 

step. No money is actually paid for products or services until each 

awardee further pursues individual task orders on a competitive 

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tion in the pool of other winners. As we have seen, in the case of 

Seaport-e, 80% of companies are yet to be successful in that second 

effort. 

Protests: As is the case with FirstSource II, the bundled/consolidated contract at Homeland Security, 29 small business awardees 

celebrated the win for this multi-year 3.1 billion dollar contract. 

However, protests were filed and despite investing all of the effort, 

time and tens of thousands of dollars in overhead and RFP response costs required to win, most awardees have been stopped 

dead in their tracks and prohibited from conducting business on 

this contract because other companies have protested parts of the 

acquisition process. 

These burdens listed above negatively impact small businesses 

that already work in the federal sector as well as those wishing to 

enter the marketplace. We appreciate this Committee’s efforts to 

improve the contracting environment through hearings and legislation over the past three years. 

Recommendations to the Committee 

WIPP offers the Committee these suggestions on removing some 

of the barriers consolidating contracts have created. 

1. Improve the collection of statutorily required data from 

agencies to measure the impact of bundling and consolidation. 

Provisions in the Small Business Act as well as additional requirements in the 2010 Jobs Act require agencies and the 

Small Business Administration (SBA) to record and track consolidation and bundling via a database. At this point, that 

database does not appear accessible or complete. This data collection is vital, but our attempts at identifying this information 

through the Federal Procurement Data System (FPDS) have 

not been successful. Without adequate data from any source, 

we cannot entirely know how damaging unjustified consolidation is to women-owned small businesses. 

2. Complete the regulatory actions required in the National 

Defense Authorization Act for FY2013 and the Small Business 

Jobs Act of 2010. These enacted pieces of legislation carry important provisions with regards to consolidation and should be 

promulgated by SBA and adopted by the Federal Acquisition 

Regulatory (FAR) Council. Regulations still in need of implementation include additions of bundling justifications to agency 

websites as well as procedural details on advance notice to 

small business vendors whose contracts may face consolidation. 

3. Increase education efforts of small business vendors regarding the consolidation and bundling processes. As new rules 

and regulations are released, small businesses need to understand the consolidation process, as well as the appeal and protest processes for possibly unjustified or unnecessary consolidations or bundling. 

Thank you to the Subcommittee holding this hearing today and 

for the efforts to make the contracting environment better for 

women-owned businesses. It is our hope that our identification of 

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barriers and recommendations are helpful to your efforts to assist 

small businesses to become successful federal contractors. I am 

happy to answer any questions. 

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