Contract Bundling Pros and Cons

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Name: Instructor: Course Title:Date: CONTRACT BUNDLING PROS AND CONS Introduction Bundling is seen as the process of consolidating two or more requirements for goods or even services that were initially performed by separate businesses or entities. Bundling of contracts is mostly done to ensure there is a systematic, solid and suitable supplier of service or goods as opposed to small businesses that may lack the scope and capacity for contracting. A report by the Small Business Administration reveals the rate of bundled contracted awarded by federal agencies has attained an all-time high and thus hurting small enterprises (Congress Research Service, 2012). Contract bundling involves the accumulation of small tasks or crammed multiple tasks into single contracts in a way that small and medium-sized enterprises cannot send competitive bids for the contracts. It is important, however, to note that given that bundled contracts offer federal and state governments the capability to deal with a single supplier or contractor, they harbor multiple setbacks. This paper seeks to explore the benefits and demerits of contract bundling by both private and public sector entities. Of special concern for the paper will be to rely on particular sources of information including the Defense Federal Acquisition Regulation , the Federal Acquisition Regulation , and other credible sources of information. BENEFITS OF CONTRACT BUNDLING Cost Saving to Sellers Sources support that there are two major ways of making a purchase. The first approach is the le carte and the second is through the packaged bundled. The former refers to smaller, independent and usually separate units of