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Bundling vs. Consolidation. I NEED HELP PLEASE


Mickey1968

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I have a VISN wide requirement that involves 11 facilities.  Here is the back story, before the merger of VISN X and VISN Y in 2016, these same services were being provided under two separate contracts.  Now that both VISNs have merged, the contracts are expiring.  They are both for the SAME services, nothing has been added.  However, I am making it one contract instead of 11 separate contracts.  That would be too administratively burdensome to have that many contracts.  Market research was conducted, and small businesses showed an interest in submitting a proposal for this combined acquisition. Respondents were asked 21 questions to ensure that the small business concerns were capable of performing these services.  The sources sought notice clearly stated that this was a VISN contract consisting of all facilities.  The solicitation was set aside for small business.  When the solicitation closed, no proposals were received from any small business concerns.  Now, I need to go full and open and SBA is denying citing unjustified bundling and unjustified consolidation.  I've written a justification as to why this procurement needed to be consolidated.  SBA is stating, If it is determined that it is also bundling (see definition at FAR 2.101), then the bundling would need to be determined as necessary and justified pursuant to FAR 7.107-3.  They also stated, this would also be substantial bundling (FAR 7.107-4) based on the total dollar value ($9.3mil).  Substantial bundling has requirements which are in addition to the documentation requirements for bundling. How do I write a justification paragraph in accordance with FAR 7.107-3 & FAR 7.107-4.  I'm new at this and haven't done this before.  This entire procurement is being help up over this justification.  I'm STRESSED!!! please help.

Thanks

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I don't know why you are engaging SBA.  You tried to do a total small business set-aside -- good for you -- but your set-aside produced no proposals.  Your situation is covered by FAR 19.507, not 19.506. 

  • Under 19.507, you are not required to consult with SBA -- you simply re-issue the solicitation as unrestricted as the set-aside is automatically dissolved.  The only restraint under 19.507 is to make sure the delivery schedule is reasonable.
  • Under 19.506, which does not reach to your situation, you are required to consult with SBA -- but this isn't your situation.

That said, your earlier set-aside decision may have been faulty.  You "asked 21 questions to ensure that the small business concerns were capable of performing these services" -- but whether or not small businesses are capable is not the right focus -- rather, the focus should be on whether there is a reasonable expectation that you will receive offers from two or more small businesses and so forth and whether there is a reasonable expectation of award at fair market prices.  Simply determining that small businesses are capable is insufficient for a set-aside.  See FAR 19.502-2(b).

But, you are where you are.  Call this a learning experience.  If you have to start over from scratch, well, you have to do what your boss wants you to do.  

If you already involved SBA in the preparation for your failed solicitation, you might reasonably wonder why the PCR or other SBA official didn't challenge your set-aside approach at that time.  

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40 minutes ago, Mickey1968 said:

please help

I do not have access to a document that would help demonstrate what the written determination would look like.   From a view of the FAR requirements/elements that you have referenced it does appear one could create a determination that addresses each element.  So two thoughts to hopefully assist you...............

Have you reached out to your fellow agency folks to see if there is a policy document or otherwise that would provide you with assistance?  Or even a person that has been down the road before that could?   While you have reached out here for assistance my experience suggests that agency's many times have specifics as to formats and process for creating such a determination document.

Have you simply done an internet search on something like "sample determination to justify substantial bundling"?  I did and there were lots of hits.

Hope this helps.

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2 hours ago, Mickey1968 said:

Substantial bundling has requirements which are in addition to the documentation requirements for bundling. How do I write a justification paragraph in accordance with FAR 7.107-3 & FAR 7.107-4

FAR 7.107-3 leads you to 15 USC 644(e):

(2)(B) "Factors

For purposes of subparagraph (A), consolidation of the requirements may be determined as being necessary and justified if, as compared to the benefits that would be derived from contracting to meet those requirements if not consolidated, the Federal Government would derive from the consolidation measurably substantial benefits, including any combination of benefits that, in combination, are measurably substantial. Benefits described in the preceding sentence may include the following:

(i) Cost savings.

(ii) Quality improvements.

(iii) Reduction in acquisition cycle times.

(iv) Better terms and conditions.

(v) Any other benefits."

Link - [USC02] 15 USC 644: Awards or contracts (house.gov) 

FAR 7.107-4(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."

Just go drown the list in your AP and answer each question.

Note* - you cannot site reducing admin burden/cost as a benefit unless it is "substantial (15 USC 644(e)(3))". 

If you haven't yet, you can also check out VHAPM 807.1 - Attachment 3. 

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