NFIB

Federal Contract Bundling at 10-Year High
10/02/2002

Although small business employs over half of private sector workers and generates more than two-thirds of the new jobs in the U.S., the Office of Advocacy of the Small Business Administration reported today that small businesses received only 16.7 percent of bundled federal contract dollars in 2001.

The report, "The Impact of Contract Bundling on Small Business," also found that bundled contracts by government agencies reached a 10-year high in 2001.

Contract bundling occurs when the federal government combines small procurement contracts into one massive contract. This practice effectively shuts out small businesses by offering such huge contracts that virtually no small company could take them on.

When President Bush unveiled his small business plan earlier this year, he called on the Office of Management and Budget (OMB) to report on how to make the contracting process fairer for small business and to end the practice of contract bundling whenever possible.

"Strong leadership from the top is what it takes to fundamentally alter federal agency behavior. We have identified the problem, this report sets out benchmarks for change, and the president is committed to solving the problem," said Thomas M. Sullivan, Chief Counsel for Advocacy.