7.107-4 Substantial bundling
Source: FAR 7.107-4 on acquisition.gov
Substantial bundling requires rigorous justification, documentation, and proactive measures to maximize small business participation in large federal acquisitions.
Overview
FAR 7.107-4 defines what constitutes "substantial bundling" in federal acquisitions and outlines additional documentation and analysis requirements when such bundling is proposed. Substantial bundling is determined by specific dollar thresholds, which vary by agency, and applies to the cumulative value of contracts, including options. When an acquisition strategy involves substantial bundling, agencies must document anticipated benefits, assess impacts on small businesses, and consider alternatives to bundling. The regulation aims to ensure that the use of substantial bundling is justified and that small business participation is maximized.
Key Rules
- Definition of Substantial Bundling
- Substantial bundling is bundling resulting in contracts or orders valued at or above $8 million (DoD), $6 million (NASA, GSA, DOE), or $2.5 million (all other agencies), including options.
- Applicability to Contract Types
- Thresholds apply to multiple-award contracts, GSA Schedule orders, and orders from contracts awarded by other agencies.
- Documentation Requirements
- Agencies must document the benefits, small business impacts, actions to maximize small business participation, justification for bundling, and alternatives considered.
Responsibilities
- Contracting Officers: Ensure acquisition strategies involving substantial bundling are properly documented and justified, and that small business participation is addressed.
- Contractors: Be aware of how substantial bundling may affect opportunities, especially for small businesses, and consider teaming or subcontracting.
- Agencies: Oversee compliance with documentation and justification requirements, and promote small business participation.
Practical Implications
- This section exists to prevent unnecessary consolidation of contracts that could limit small business opportunities.
- It impacts acquisition planning, requiring thorough analysis and justification for substantial bundling.
- Common pitfalls include inadequate documentation, failure to consider alternatives, and insufficient efforts to include small businesses.
(a)
(1) Substantial bundling is any bundling that results in a contract or task or delivery order with an estimated value of—
(i) $8 million or more for the Department of Defense;
(ii) $6 million or more for the National Aeronautics and Space Administration, the General Services Administration, and the Department of Energy; or
(iii) $2.5 million or more for all other agencies.
(2) These thresholds apply to the cumulative estimated dollar value (including options) of–
(i) Multiple-award contracts;
(ii) Task orders or delivery orders issued against a GSA Schedule contract; or
(iii) Task orders or delivery orders issued against a task-order or delivery-order contract awarded by another agency.
(b) In addition to addressing the requirements for bundling (see 7.107-3), when the proposed acquisition strategy involves substantial bundling, the agency shall document in its strategy—
(1) The specific benefits anticipated to be derived from substantial bundling;
(2) An assessment of the specific impediments to participation by small business concerns as contractors that result from substantial bundling;
(3) Actions designed to maximize small business participation as contractors, including provisions that encourage small business teaming;
(4) Actions designed to maximize small business participation as subcontractors (including suppliers) at any tier under the contract, or order, that may be awarded to meet the requirements;
(5) The determination that the anticipated benefits of the proposed bundled contract or order justify its use; and
(6) Alternative strategies that would reduce or minimize the scope of the bundling, and the rationale for not choosing those alternatives.