OMB looks to grade agencies on bundling

The Office of Management and Budget plans to create a score card system for agencies to track their progress in unraveling bundled contracts, Clay Johnson, OMB’s deputy director for management, has informed a lawmaker.

In an Aug. 3 letter to Sen. Olympia Snowe (R-Maine), chairwoman of the Senate Small Business and Entrepreneurship Committee, Johnson identified the score card as one of several measures OMB will take to discourage contract bundling.

The Office of Federal Procurement Policy, an arm of OMB, will be in charge of developing the score card, he wrote. It will be similar to the score card agencies use to rate their progress on other initiatives.

Bundling was a concern in the past when agencies gathered multiple requirements into single contracts, including some tasks that small businesses could have fulfilled. However, after agencies bundled the smaller opportunities with larger ones, those opportunities were out of reach of small businesses.

In the 1990s, Congress enacted legislation to require agencies to justify those bundling decisions if the result would eliminate opportunities for small businesses.

Johnson sent the letter as Congress was considering new legislation that would redefine bundling, said Stan Soloway, president of the Professional Services Council. Part of the Small Business Administration reauthorization bill would define bundling as any combining of requirements, he said, even if they would not have been suitable for small businesses in the first place.

“It doesn’t matter how big the requirement is,” Soloway said of the proposed change. “It doesn’t have anything to do with small business.”

Soloway said Johnson’s promised steps are not controversial, but discussing them in detail misses the larger point. “I don’t think anybody would have any objection to having a clearer definition of success, a score card, accountability — all of those are useful tools,” he said. But such tools would be more useful in the context of a larger discussion about the place of small businesses in government contracting, he added.

Bundling is one of several contracting practices that deny contract dollars to specific types of small businesses, including woman-owned businesses, said Ann Sullivan, a member of Women Impacting Public Policy.

Johnson’s pledge highlights an increasingly complicated problem, said Larry Allen, executive vice president of the Coalition for Government Procurement. The government gives agencies many directives intended to improve contracting processes, and they are often contradictory.

“It should be pretty easy to keep track of bundled contracts,” Allen said. “All OMB will have to do is gauge the success of its Strategic Sourcing Initiative.”

Unlike the unbundling policy, strategic sourcing is the practice of aggregating agency demands to take advantage of the volume-buying power of the government.

“It seems to me that the two projects are near total opposites,” Allen said. “I would find it tough to be a federal program manager told to leverage my buying power one day and then be told to break up my buys into smaller procurements the next.”