Senator Collins Discusses DOD Contracting Amendment

Ms. COLLINS. I thank the Chair.

Mr. President, our amendment addresses an increasing practice in the Department of Defense to bundle contracts to award a larger contract. The problem with that is it disadvantages smaller companies that cannot bid on a giant contract but would be perfectly able to responsibly perform the work if the contract were broken up into smaller segments.

Contract bundling has become increasingly prevalent in recent years. In fact, it has reached record levels. Contract bundling is up by 19 percent since 1992, and the result of this is the shutout of many small firms from doing business with the Federal Government.

Our amendment would require that the Department of Defense perform rigorous analysis on bundled contracts in excess of $5 million. It would require that alternatives to bundling be considered and that a determination be made that the benefits of bundling the contracts substantially exceed the benefits of identified alternatives.

We have focused on DOD because the Small Business Administration indicates that "bundling is rooted at the Department of Defense."

The Collins-Talent-Hutchison-Snowe amendment is necessary because bundling has had an unfortunate effect on the U.S. Government contractor base. According to the Office of Federal Procurement Policy Administrator Angela Styles:

This issue is a dramatically reduced contractor base, and the mounting lost opportunity cost of choosing among fewer firms with fewer ideas and innovations to deliver products and services at lower prices.

She noted:

The negative effects of contract bundling over the past 10 years cannot be overestimated. .    .    . Not only are there fewer small businesses receiving Federal contracts, but the Federal Government is suffering from a smaller supplier base .    .    . when small businesses are excluded from Federal opportunities through contract bundling, our agencies, small businesses, and taxpayers lose.

That is exactly the case. When contracts are bundled so that only a few large firms can bid on them, the United States does not get as good a deal. The United States Government is not taking advantage of the many innovative small firms that are capable of doing the work for the Federal Government if the contract was awarded in smaller amounts.

This is a matter of making sure we have a healthy industrial base, that we have as many firms competing as vigorously as possible to do work for the Federal Government, and of making sure our smaller companies have a fair shot at competing for Federal contracts. This amendment will make a real difference for our small businesses.

I yield to the Senator from Missouri.