(a) “Necessary and justified” (with regard to bundling) is a two-part determination, made with the aid of market research. It means not only that the bundle is considered essential from a management perspective, but also that the benefits accruing from the bundling of requirements, as compared to not doing so, would be measurably substantial (as defined in FAR 7.107(b)). Note that the definition of “measurably substantial” contains a requirement for quantification of benefits.
(c)(90) If quantification of the benefits of a bundled acquisition does not equal quantification levels set forth in FAR 7.107(b), ordinarily the contracting officer shall not bundle requirements. However, in exceptional situations the contracting officer may still proceed with the contracting action. The contracting officer shall seek the approval, in a determination and findings, of the Under Secretary of Defense for Acquisition, Technology and Logistics (USD(AT&L)), that bundling is necessary and justified. In that case, even though the quantified benefits do not reach the specified dollar equivalents, they must be shown to be critical to the agency’s mission success. The acquisition strategy described in the request to USD(AT&L) shall provide for maximum practicable participation by small business concerns. (See Part 19 for further guidance on maximizing small business participation.) Reduction of administrative or personnel costs alone cannot be used as justification for bundling in support of the request to USD(AT&L).
(91) For an acquisition requiring USD(AT&L)’s permission to proceed with the bundled requirement, the contracting officer shall submit the request for approval of the determination and finding to J-72; it will be routed through DIRECTOR, ACQUISITION MANAGEMENT (J-7), J-3, DLA-DB and -DG, and the Director, DLA, who will sign out the request to OSD. There are no timeframes in the statute or FAR for use of this procedure, but it is essential that justifications be submitted at the earliest possible date. Therefore, the contracting officer shall forward the request within 30 days of determining that the proposed acquisition will not generate savings in accordance with established levels, as set forth in FAR 7.107(b) (that is, within 30 days of performing a bundling analysis). The contracting officer shall not issue a bundled solicitation until the determination and finding granting the permission has been received from USD(AT&L).
(e) In establishing the procurement strategy for any bundled requirement, whether or not of a dollar value constituting substantial bundling, the contracting officer may want to address the following considerations as part of the market research required to be conducted in accordance with FAR 10.001(a)and (c) and 10.002(e): benefits; impediments to small business prime contracting participation; actions to maximize small business subcontracting participation; and affirmative determination that the benefits justify bundling. However, in cases not involving substantial bundling, FAR does not require that the documentation of the research results be so extensive as it would be for instances of substantial bundling. See 7.102(94) for the proper use of business case analyses in the documentation of benefits of bundling; see 10.001 for the extent and type of market research necessary to support the required level of documentation.
(90)(i) If a bundling analysis has already been performed on a contract action, it is not necessary to perform a new bundling analysis before exercising an option.
(ii) For new acquisitions, procurement history should be analyzed from the three immediately preceding years to determine whether there have previously been separate, smaller contracts for these requirements that were or could have been performed by small businesses.
(iii) For any contract containing an “add/delete” clause, the contracting officer shall perform a bundling analysis before adding individual/groups of items via clause exercise, if the change modifies the contract and constitutes a new requirement. On the other hand, if the add/delete clause is merely a mechanism by which items, always intended to be part of the acquisition and included in the initial analysis, are “phased in” (for pricing and other purposes), then the additions do not constitute a new requirement, and a new bundling analysis is not required.
(91) The SBA can appeal to the head of a contracting agency certain decisions made by the agency that SBA believes will adversely affect small businesses. One such appealable decision pertains to any bundling of contract requirements the SBA considers to be unnecessary or insufficiently justified. Whenever a proposed aggregation of requirements, at least some of which were formerly filled by small businesses, is likely to render the resultant contract unsuitable for award to a small business concern, the SBA may challenge that solicitation. (See the definition of bundling at FAR 2.101 for aspects of a procurement that might make small business participation unlikely.) Given the seriousness of these consequences, the contracting officer must be able to show that any such proposed bundle is “necessary and justified” (as defined in 7.107(a), above), and that benefits that are anticipated to accrue to the Government will be “measurably substantial,” as explained in FAR 7.107(b). Reduction of administrative or personnel costs are not considered sufficient justification for bundling, unless these savings are expected to be substantial. If the contracting officer cannot determine that a bundling of requirements is necessary and justified, and that its benefits will be measurably substantial (including situations where the contracting officer cannot quantify such benefits), the contracting officer shall not proceed with the bundling without approval by USD(AT&L).
(92) In cases where there is disagreement between the SBA and the contracting officer over a bundled or substantially bundled requirement, the PCR or SBA Area Office may initiate an appeal to the head of the contracting activity. Levels of appeal and associated timeframes are provided in FAR 19.402(c)(2) and (for general reference) 19.505.
