Permanent Ban on Government Contract Bundling

Priority Issue Briefs
Permanent Ban on Government Contract Bundling

Agencies frequently combine contracts into a single large contract that pushes small businesses out of the competition for a contract. Small businesses that could have completed the requirements of the smaller contract are no longer able to compete when other contracts are bundled in, creating new requirements outside the scope of most small businesses. The only businesses left to compete for these bundled contracts are large businesses. With over $200 billion in purchases annually, the government is allowing small businesses to be cheated out of opportunities for growth through the practice of "contract bundling."

While the dollar volume of federal procurement increased 7 percent in 2002, the actual number of contracts awarded to small businesses decreased 14 percent, according to the latest available statistics. This followed a drop of more than 50 percent in small business contracts during the 1990s. One of the major reasons for this ongoing decrease is "contract bundling."

No savings has ever been documented through the practice of "contract bundling" and NAGC argues that limiting competition increases prices through this practice.

When President George W. Bush unveiled his Small Business Agenda in 2002, he said, “Wherever possible, we’re going to insist we break down large federal contracts so that small business owners have got a fair shot at federal contracting.”

The National Association of Government Contractors is opposed to limiting competition and denying small businesses access to contracts through contract bundling.


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