Contract consolidation generally occurs when a federal agency combines in a solicitation two or more contract requirements that were previously provided to that agency under separate contracts. Agencies may achieve savings and other benefits through contract consolidation, but consolidation may limit small business opportunities to compete for federal contracts. A specific type of contract consolidation, known as bundling, has a more significant effect on small businesses’ ability to perform the consolidated contract. Bundling generally takes place when two or more requirements that were previously performed by small businesses are combined into a single solicitation and result in a contract that is likely to be unsuitable for small business award. Table 1 summarizes the definitions of consolidation and bundling. To foster small business participation in federal contracting, Congress has required agencies to take various actions to justify the use of consolidated and bundled contracts. The Small Business Act was amended in 1997 to restrict federal agencies from bundling contracts without first taking certain steps, including conducting market research and demonstrating specific cost savings. Congress first enacted consolidation of contract requirements in the National Defense Authorization Act for Fiscal Year 2004, but only for DOD, which was required to conduct market research, identify any alternative approaches that would involve a lesser degree of consolidation of contract requirements, and determine that the consolidation of contracts valued over $5 million (later increased in 2010 to $6 million), was necessary and justified. DOD could determine that an acquisition strategy was necessary and justified if the benefits of consolidation substantially exceed the benefits of alternative approaches. Congress enacted the Small Business Jobs Act of 2010 (Jobs Act), which amended the Small Business Act to require that all federal agencies justify their consolidation of contract requirements with expected values greater than $2 million, thereby lowering the dollar threshold for DOD unless it met small business goals and requiring for the first time a justification for all federal civilian agencies. new requirements for agencies to identify any negative impacts that consolidation could have on small businesses and certify that steps would be taken to include small businesses in the acquisition strategy. The 2010 amendments also included additional requirements for bundled contracts, such as requiring agencies to publicly post the rationales for each bundled contract on their websites. The National Defense Authorization Act for Fiscal Year 2013 later repealed a provision that tied the DOD dollar threshold to its achievement of small business goals, and required DOD to review consolidated contracts with expected values of over $2 million. In addition to the requirements for agencies to justify their consolidated and bundled contracts, federal law and regulations outline specific responsibilities for agencies’ small business officials and the SBA in addressing small business issues, particularly when bundling is involved. Table 2 below lists agency and SBA responsibilities for consolidated and bundled contracts. Small Business Jobs Act of 2010, Pub. L. No. 111-240, § 1313. The Jobs Act required the over $2 million threshold for DOD only until SBA determined that DOD complied with the Small Business Act’s government-wide contracting goals; if it made this determination, then the previous statutory threshold of greater than $6 million applied to DOD. The Small Business Act established an Office of Small and Disadvantaged Business Utilization (OSDBU) in each federal agency with procurement powers. The office is referred to as the Office of Small Business Programs in DOD and its components and the Office of Small Business Utilization at GSA. SBA has additional statutory responsibilities for bundled contracts, including maintaining a database on bundled contracts, reviewing savings and benefits of bundled contracts that are re-competed as bundled contracts, and reporting to the small business Congressional committees annually on contract bundling and its impact on small businesses. While various actors are engaged in the contracting process, ultimately, the contracting agencies make the final decisions to consolidate requirements. DOD and GSA accounted for more than 80 percent of the reported consolidated contracts in fiscal years 2011 and 2012, but DOD and GSA overstated their use of consolidated contracts in those two years. In turn, because these agencies account for such a high percentage of all contracts reported as consolidated, government-wide reporting on contract consolidation is not reliable. In our sample of 157 DOD and GSA contracts that were identified as consolidated in FPDS-NG, we found and agency officials confirmed that approximately 34 percent of the DOD contracts and all of the GSA contracts were miscoded and in fact were not consolidated. We also identified four consolidated DOD contracts, including one that was also bundled, that were not reported as such in FPDS-NG. In fiscal years 2011 and 2012, federal agencies reported that they had awarded 358 consolidated contracts and orders under contracts government-wide, with total obligations of approximately $3.58 billion for goods and services ranging from information technology to construction and base support services. We reviewed a sample of 157 contracts and orders from DOD and GSA and found that 48 DOD contracts and all 16 GSA contracts were miscoded as consolidated in FPDS-NG. Figure 1 shows the details of this analysis. DOD and GSA officials generally attributed the data entry errors to miscoding that was discovered when we requested contract documentation related to consolidated contracts. In most cases, the contracts should not have been reported as either consolidated or bundled in FPDS-NG. After being made aware of the errors, most DOD and GSA officials submitted corrected data to FPDS-NG. In addition to contracts that were over-reported in FPDS-NG, we identified four consolidated contracts, including one that was also bundled, that were not reported as such in FPDS-NG. The contracts were identified through various sources, including the Federal Business Opportunities (FedBizOpps) website and task orders associated with contracts identified as consolidated in FPDS-NG, and our review of eight DOD contracts that were not identified as consolidated in FPDS-NG.officials confirmed that four contracts were consolidated, but were generally unsure why they had been miscoded in FPDS-NG. In one contract, Army officials said the contract had been transferred from another contracting office and suggested it could have been a data migration issue in transferring the contract between systems. Most of the 100 DOD contracts from fiscal years 2011 and 2012 that we identified as consolidated complied with existing acquisition regulations by justifying the need to consolidate contract requirements over $6 million. Most of the contracts that did not comply were justified, but the determinations were not made by an official at a level senior enough to meet defense regulation requirements. In fiscal years 2011 and 2012, existing DOD regulations also did not fully reflect the 2010 changes in the law, including those that lowered the dollar amount at which DOD consolidations must be justified from over $6 million to over $2 million if DOD failed to meet small business goals and required the agencies to identify small business impacts. In addition, GSA had not amended its regulations for identifying and justifying consolidated contract requirements because it was waiting for SBA regulations implementing the consolidation provisions to be finalized. SBA issued the regulations in October 2013. In our review of 100 DOD consolidated contracts from fiscal years 2011 and 2012, which include the 96 contracts reported in FPDS-NG and 4 contracts identified from other sources, we found that most—82 percent— complied with requirements in the DFARS for justifying the consolidation. These provisions require defense agencies to, among other things, conduct market research, identify alternative contracting approaches that involve less consolidation, and include a determination by the senior procurement executive that the consolidation is necessary and justified. In determining if consolidation is necessary and justified for estimated contract requirements above a certain threshold, the DFARS provides that market research may indicate that the benefits of consolidation substantially exceed the benefits of the alternatives. Table 3 summarizes these requirements and the consolidated contracts we reviewed. Almost all of the DOD consolidated contracts that we reviewed, including the four that had not been reported in FPDS–NG, were supported by a memorandum stating that the consolidation was necessary and justified. These memorandums included a statement that expected benefits, including savings or other benefits, exceeded the benefits of alternative approaches, and the determination that the consolidations were necessary and justified. In 17 of the contracts we reviewed, however, the consolidation decision was authorized by DOD officials, but not at the level specified in regulations.fully comply with DFARS consolidation requirements by not identifying alternative contracting approaches that involve less consolidation. DOD consolidated contracts also did not The consolidated contracts we reviewed largely addressed expected savings and benefits in quantitative terms. According to federal law and DFARS, consolidation may be necessary and justified if the benefits of consolidation substantially exceed the benefits of alternative approaches, but the phrase “substantially exceed” is not further defined in statute or regulation. DOD guidance provides that the benefit analysis must prove that the acquisition strategy’s benefits are much greater than the benefits of the alternative approaches. In more than half of the contracts we reviewed, officials quantified cost savings in either dollar amounts or as percentages; in other cases, justifications supported cost savings without metrics or data. For example, Air Force contracting officials justified consolidating requirements in a $5.9 million contract for electronic parts repair by stating that consolidation would allow the federal government to receive more favorable unit prices and permit the contractor to address obsolescence issues more efficiently. Table 4 shows savings and benefits described in the contracts we reviewed. Consolidated contracts that are also bundled must demonstrate specific cost savings depending on the estimated value of the consolidated requirements, to justify the approach. Further, bundled contracts at DOD that are expected to exceed $8 million must include additional analysis, such as assessing the specific impediments to small business participation. The two bundled contracts we reviewed—a $288 million Navy contract identified as bundled in FPDS-NG and a $23 million Army contract identified through the FedBizOpps website—showed that the agencies both complied with these additional requirements. Specifically, Navy officials conducted a cost benefit analysis demonstrating savings of $28 million—or 10 percent—over 5 years for an aircraft maintenance, modification, and support services contract.