House Passes Contract Bundling Legislation.

• Author: Book, Elizabeth G.
• Position: Brief Article

In the last hours of the 106th Congress, the House of Representatives passed and sent to the White House legislation that contained several vital small business programs. The Labor/HHS Appropriations bill included the reauthorization of the Small Business Innovation Research Program (SBIR) and a new study to assess the negative impact of contract bundling on small businesses.

The reauthorized SBIR program assists small businesses in obtaining federal research and development funding. This measure amends the general business loan program at the Small Business Administration to encourage the making of smaller loans. The Small Business Competition Preservation Act of 2000 also was enrolled in the package. This measure commissions a study to analyze the effect of contract bundling on small businesses by requiring the administrator to maintain a database of bundled contracts.

The administrator must use this database to analyze the number of small businesses that have been displaced as prime contractors as a result of bundled contracts. The administrator is required to determine the amount of savings and benefits that were actually achieved by the bundled contract, and whether such savings and benefits will continue to be achieved by maintaining the contract requirements as a bundle.

Blacklisting Final Rule

In one of the Clinton administration's last major policy actions, the Federal Acquisition Regulatory Council (FAR Council) issued a final rule on federal contractor responsibility, better known as blacklisting.

The rule requires a "satisfactory record of integrity and business ethics" in making contractor responsibility determinations under FAR Part 9, and revises several cost principles under FAR, Part 31, related to labor relations and legal proceedings.

This is a very controversial action. CODSIA (the Council of Defense and Space Industry Associations) -- an organization comprised of eight associations that represent member firms employing the preponderance of the two million men and women in the defense industry -- is strongly opposed to the rule.

CODSIA argued against the release of the final rule, asserting that the regulation's standard of eligibility for awarding a federal contract covers an enormously complex matrix of laws, making it so broad and vague that it is actually meaningless. CODSIA charges that the rule is "an attempt to circumvent the legislative process by adding a major, new, draconian penalty -- disqualification from...