The Law of Unintended Consequences

Everything has consequences. Some are planned. Many are not.

I attended a breakfast meeting of the Coalition for Government Procurement this morning featuring an address by Steven Preston, the Administrator of the Small Business Administration. He spoke at length about the Agency’s efforts to monitor and enforce procurement rules against “bundling” of requirements to the exclusion of small business. I talked with him briefly after the meeting in hopes of hearing a alternative, but I'm afraid the scope of the underlying problem is beyond the purview of the SBA or any other single agency.

In an environment where the acquisition workforce continues to shrink, the workload continues to grow and half of all senior personnel will retire in the next five years, how else will we accomplish the mission? There simply aren’t enough experienced acquisition professionals to go around. How will we buy the goods and services required to support the mission without combining procurements? It would seem to be a practical necessity.

If the practice of bundling is effectively outlawed, who will compete and award all of the separate contracts required to procure the goods and services to support the mission?

Historically, the response of the small business community to bundling has been to form teams to amass the necessary resources to bid and win. The current sense of the Congress seems to be to severely restrict subcontracting in an effort to reduce “pass through” costs (viewed as adding no value). Any significant subcontracting restriction would almost preclude the prime/sub teams many firms form to bid bundled procurements.

If bundling is a practical necessity and the subcontracting restrictions limit teaming (as I believe they will), how will small businesses compete?

The agencies have responded to this conundrum with a proliferation of Indefinite Delivery/Indefinite Quantity (IDIQ) contracts under which they can place many small orders and skate around the bundling issue. Many times, they will run one competition, but award dozens of contracts. It works, but that practice is also under fire by everyone from GAO to Congress. And, don’t look to GSA to save the day. Interagency procurement is under fire as well.

In attempting to address acquisition issues piecemeal, Congress has created a massive “you can’t get there from here” scenario. I’m sure that wasn’t the intent, but it may be the result.

It’s the law.