A bill to amend title 10, United States Code, to restrict bundling of Department of Defense contract requirements that unreasonably disadvantages small businesses, and for other purposes.

SECTION 1. CONSOLIDATION OF CONTRACT REQUIREMENTS.

    (a) Amendment to Title 10.--
            (1) In general.--Chapter 141 of title 10, United States 
        Code, is amended by inserting after section 2381 the following 
        new section:
``Sec. 2382. Consolidation of contract requirements: policy and 
              restrictions
    ``(a) Policy.--The Secretary of Defense shall require the Secretary 
of each military department, the head of each Defense Agency, and the 
head of each Department of Defense Field Activity to ensure that the 
decisions made by that official regarding consolidation of contract 
requirements of the department, agency, or activity as the case may be, 
are made with a view to providing small business concerns with 
appropriate opportunities to participate in Department of Defense 
procurements as prime contractors and appropriate opportunities to 
participate in such procurements as subcontractors.
    ``(b) Limitation on Use of Acquisition Strategies Involving 
Consolidation.--(1) An official of a military department, Defense 
Agency, or Department of Defense Field Activity may not execute an 
acquisition strategy that includes a consolidation of contract 
requirements of the military department, agency, or activity with a 
total value in excess of $5,000,000, unless the senior procurement 
executive concerned first--
            ``(A) conducts market research;
            ``(B) identifies any alternative contracting approaches 
        that would involve a lesser degree of consolidation of contract 
        requirements; and
            ``(C) determines that the consolidation is necessary and 
        justified.
    ``(2) A senior procurement executive may determine that an 
acquisition strategy involving a consolidation of contract requirements 
is necessary and justified for the purposes of paragraph (1) if the 
benefits of the acquisition strategy substantially exceed the benefits 
of each of the possible alternative contracting approaches identified 
under subparagraph (B) of that paragraph. However, savings in 
administrative or personnel costs alone do not constitute, for such 
purposes, a sufficient justification for a consolidation of contract 
requirements in a procurement unless the total amount of the cost 
savings is expected to be substantial in relation to the total cost of 
the procurement.
    ``(3) Benefits considered for the purposes of paragraphs (1) and 
(2) may include cost and, regardless of whether quantifiable in dollar 
amounts--
            ``(A) quality;
            ``(B) acquisition cycle;
            ``(C) terms and conditions; and
            ``(D) any other benefit.
    ``(c) Definitions.--In this section:
            ``(1) The terms `consolidation of contract requirements' 
        and `consolidation', with respect to contract requirements of a 
        military department, Defense Agency, or Department of Defense 
        Field Activity, mean a use of a solicitation to obtain offers 
        for a single contract or a multiple award contract to satisfy 
        two or more requirements of that department, agency, or 
        activity for goods or services that have previously been 
        provided to, or performed for, that department, agency, or 
        activity under two or more separate contracts smaller in cost 
        than the total cost of the contract for which the offers are 
        solicited.
            ``(2) The term ``multiple award contract'' means--
                    ``(A) a contract that is entered into by the 
                Administrator of General Services under the multiple 
                award schedule program referred to in section 
                2302(2)(C) of this title;
                    ``(B) a multiple award task order contract or 
                delivery order contract that is entered into under the 
                authority of sections 2304a through 2304d of this title 
                or sections 303H through 303K of the Federal Property 
                and Administrative Services Act of 1949 (41 U.S.C. 253h 
                through 253k); and
                    ``(C) any other indeterminate delivery, 
                indeterminate quantity contract that is entered into by 
                the head of a Federal agency with two or more sources 
                pursuant to the same solicitation.
            ``(3) The term `senior procurement executive concerned' 
        means--
                    ``(A) with respect to a military department, the 
                official designated under section 16(3) of the Office 
                of Federal Procurement Policy Act (41 U.S.C. 414(3)) as 
                the senior procurement executive for the military 
                department; or
                    ``(B) with respect to a Defense Agency or a 
                Department of Defense Field Activity, the official so 
                designated for the Department of Defense.
            ``(4) The term `small business concern' means a business 
        concern that is determined by the Administrator of the Small 
        Business Administration to be a small-business concern by 
        application of the standards prescribed under section 3(a) of 
        the Small Business Act (15 U.S.C. 632(a)).''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by inserting after the 
        item relating to section 2381 the following new item:

``2382. Consolidation of contract requirements: policy and 
                            restrictions.''.
    (b) Data Review.--
            (1) Requirement for review.--The Secretary of Defense shall 
        revise the data collection systems of the Department of Defense 
        to ensure that such systems are capable of identifying each 
        procurement that involves a consolidation of contract 
        requirements within the department with a total value in excess 
        of $5,000,000.
            (2) Periodic review.--The Secretary shall ensure that 
        appropriate officials of the Department of Defense periodically 
        review the information collected pursuant to paragraph (1) in 
        cooperation with the Small Business Administration--
                    (A) to determine the extent of the consolidation of 
                contract requirements in the Department of Defense; and
                    (B) to assess the impact of the consolidation of 
                contract requirements on the availability of 
                opportunities for small business concerns to 
                participate in Department of Defense procurements, both 
                as prime contractors and as subcontractors.
            (3) Definitions.--In this subsection:
                    (A) The term ``bundling of contract requirements'' 
                has the meaning given that term in section 3(o)(2) of 
                the Small Business Act (15 U.S.C. 632(o)(2)).
                    (B) The term ``consolidation of contract 
                requirements'' has the meaning given that term in 
                section 2382(c)(1) of title 10, United States Code, as 
                added by subsection (a).
                    (C) The term ``small business concern'' means a 
                business concern that is determined by the 
                Administrator of the Small Business Administration to 
                be a small-business concern by application of the 
                standards prescribed under section 3(a) of the Small 
                Business Act (15 U.S.C. 632(a)).
    (c) Evaluation of Bundling Effects.--Section 15(h)(2) of the Small 
Business Act (15 U.S.C. 644(h)(2)) is amended--
            (1) in subparagraph (C), by inserting ``, and whether 
        contract bundling played a role in the failure,'' after 
        ``agency goals''; and
            (2) by adding at the end the following:
            ``(G) The number and dollar value of consolidations of 
        contract requirements with a total value in excess of 
        $5,000,000, including the number of such consolidations that 
        were awarded to small business concerns as prime 
        contractors.''.
    (d) Reporting Requirement.--
            (1) In general.--The Administrator of the Small Business 
        Administration shall conduct a study examining the best means 
        to determine the accuracy of the market research required under 
        section 15(e)(2) of the Small Business Act (15 U.S.C. 
        644(e)(2)) for each bundled contract (as defined in section 
        3(o)(1) of such Act (15 U.S.C. 632(o)(1)), to determine whether 
        the anticipated benefits were realized, or if they were not 
        realized, the reasons that the anticipated benefits were not 
        realized.
            (2) Provision of information.--The head of a Federal agency 
        shall provide to the appropriate procurement center 
        representative a copy of market research required of the agency 
        under section 15(e)(2) of the Small Business Act for 
        consolidations of contract requirements with a total value in 
        excess of $5,000,000, upon request.
            (3) Report.--Not later than 270 days after the date of 
        enactment of this Act, the Administrator shall submit a report 
        to the Committee on Small Business and Entrepreneurship of the 
        Senate and the Committee on Small Business of the House of 
        Representatives on the results of the study conducted under 
        this subsection.
            (4) Repeal of requirement for annual report.--Section 15 of 
        the Small Business Act (15 U.S.C. 644) is amended by striking 
        subsection (p).

Summary: Directs the Secretary of Defense to require the Secretary of each military department and the head of each defense agency and Department of Defense (DOD) Field Activity to ensure that decisions made regarding the consolidation of contract requirements (bundling) are made with a view to providing small businesses with appropriate opportunities to participate in DOD procurements as prime contractors and subcontractors. Limits the authority of any such official to execute an acquisition strategy that includes a consolidation of contract requirements with a total value in excess of $5 million. Requires the Secretary to review DOD data collection systems to ensure their capability of identifying each procurement that involves a consolidation in excess of such amount.Amends the Small Business Act to require the Small Business Administration (SBA) to report annually to the President the number and value of consolidations in excess of such amount, including the number of such consolidations that were awarded to small businesses as prime contractors. Requires the SBA Administrator to study the best means to determine the accuracy of certain required market research on bundled contracts to determine whether their anticipated benefits were realized.