Current law allows federal agencies to consolidate contracts for products and services to improve efficiency. However, says Congressional Quarterly, critics say that small businesses often have been unable to compete for bundled contracts because they are considered to be too small or too specialized. The White House Office of Management and Budget (OMB) has reported that small businesses are being awarded less than half as many federal contracts as they received 10 years ago.

Under the administration’s new plan, federal agencies will be required to report to OMB the steps taken to reduce contract bundling, and to develop alternative procurement plans using smaller contractors. Large suppliers could be penalized if they fail to use small businesses as subcontractors.

Publication date: 11/04/2002