[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR7.107]

[Page 110-111]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 7_ACQUISITION PLANNING--Table of Contents
 
                      Subpart 7.1_Acquisition Plans
 
Sec.  7.107  Additional requirements for acquisitions involving bundling.

    (a) Bundling may provide substantial benefits to the Government. 
However, because of the potential impact on small business 
participation, the head of the agency must conduct market research to 
determine whether bundling is necessary and justified (15 U.S.C. 
644(e)(2)). Market research may indicate that bundling is necessary and 
justified if an agency would derive measurably substantial benefits (see 
10.001(a)(2)(iv) and (a)(3)(vi)).
    (b) Measurably substantial benefits may include, individually or in 
any combination or aggregate, cost savings

[[Page 111]]

or price reduction, quality improvements that will save time or improve 
or enhance performance or efficiency, reduction in acquisition cycle 
times, better terms and conditions, and any other benefits. The agency 
must quantify the identified benefits and explain how their impact would 
be measurably substantial. Except as provided in paragraph (d) of this 
section, the agency may determine bundling to be necessary and justified 
if, as compared to the benefits that it would derive from contracting to 
meet those requirements if not bundled, it would derive measurably 
substantial benefits equivalent to--
    (1) Ten percent of the estimated contract value (including options) 
if the value is $75 million or less; or
    (2) Five percent of the estimated contract value (including options) 
or $7.5 million, whichever is greater, if the value exceeds $75 million.
    (c) Without power of delegation, the service acquisition executive 
for the military departments, the Under Secretary of Defense for 
Acquisition, Technology and Logistics for the defense agencies, or the 
Deputy Secretary or equivalent for the civilian agencies may determine 
that bundling is necessary and justified when--
    (1) The expected benefits do not meet the thresholds in paragraphs 
(b)(1) and (b)(2) of this section but are critical to the agency's 
mission success; and
    (2) The acquisition strategy provides for maximum practicable 
participation by small business concerns.
    (d) Reduction of administrative or personnel costs alone is not 
sufficient justification for bundling unless the cost savings are 
expected to be at least 10 percent of the estimated contract value 
(including options) of the bundled requirements.
    (e) Substantial bundling is any bundling that results in a contract 
with an average annual value of $10 million or more. When the proposed 
acquisition strategy involves substantial bundling, the acquisition 
strategy must--
    (1) Identify the specific benefits anticipated to be derived from 
bundling;
    (2) Include an assessment of the specific impediments to 
participation by small business concerns as contractors that result from 
bundling;
    (3) Specify actions designed to maximize small business 
participation as contractors, including provisions that encourage small 
business teaming;
    (4) Specify actions designed to maximize small business 
participation as subcontractors (including suppliers) at any tier under 
the contract or contracts that may be awarded to meet the requirements; 
and
    (5) Include a specific determination that the anticipated benefits 
of the proposed bundled contract justify its use.
    (f) The contracting officer must justify bundling in acquisition 
strategy documentation.
    (g) In assessing whether cost savings would be achieved through 
bundling, the contracting officer must consider the cost that has been 
charged or, where data is available, could be charged by small business 
concerns for the same or similar work.
    (h) The requirements of this section, except for paragraph (e), do 
not apply if a cost comparison analysis will be performed in accordance 
with OMB Circular A-76.

[64 FR 72443, Dec. 27, 1999, as amended at 65 FR 46054, July 26, 2000]