[Code of Federal Regulations] [Title 48, Volume 1] [Revised as of October 1, 2005] From the U.S. Government Printing Office via GPO Access [CITE: 48CFR7.107] [Page 114-115] 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 or the Government 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 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 or order value (including options) if the value is $75 million or less; or (2) Five percent of the estimated contract or order value (including options) [[Page 115]] 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 or order value (including options) of the bundled requirements. (e) Substantial bundling is any bundling that results in a contract or order that meets the dollar amounts specified in 7.104(d)(2). When the proposed acquisition strategy involves substantial bundling, the acquisition strategy must additionally-- (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 order, that may be awarded to meet the requirements; (5) Include a specific determination that the anticipated benefits of the proposed bundled contract or order justify its use; and (6) Identify alternative strategies that would reduce or minimize the scope of the bundling, and the rationale for not choosing those alternatives. (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; 68 FR 60005, Oct. 20, 2003]