Bundled Services: A Framework for Cutting Costs, Improving Performance, and Supporting Small Businesses
Jan 1, 2002
Note: Many electronic documents posted prior to 2003 are available as chapter PDFs or HTML files linked from the Contents.
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An organization bundles the services that it purchases when it consolidates activities previously provided by separate sources and purchases the services through a single contract from a single provider. The Department of Defense is giving increasing attention to this practice because commercial firms report that bundling offers the potential for significant performance and cost benefits. However, the goals of the federal government differ from those of commercial firms in that federal regulations commit the Air Force and other federal organizations to place a fair proportion of purchases and contracts with small business enterprises and to maintain free and open competition among prospective providers of services to the federal government. Small businesses typically do not have the scale of operation or scope of expertise to provide bundles of services as prime contractors. The authors of this report discuss recent legislation designed to protect small businesses by ensuring that bundling occurs only when it is likely to generate measurably substantial increases in performance or reductions in cost to the federal buyer. After reviewing potential sources of such benefits, the authors propose a methodology that buying agencies could use to gather information on when and how to bundle the services they buy and justify those decisions in a way that satisfies the legislative requirements.
Why Is the Air Force Interested in Bundling Services into Larger Contracts? PDF
Relevant Legislation and Skills PDF
Potential Benefits and Risks Associated with Bundled Service Contracts PDF
Bundling Methodology for Recontracting Activities PDF
General Background on Developing and Using PDF
Examples of Strategic Supply-Base Reduction PDF
Industry Consolidation Trends PDF
SBA Final Rule – a Derived Decision Tree for Bundling PDF
Assigning Monetory Values to Performance Improvements PDF