Making and Justifying Bundling Decisions for Air Force Purchasing of Services

An organization bundles the service that it purchases when it consolidates activities previously provided by separate sources and purchases the services through a single contract. The DoD 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. Regulations commit 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. This report discusses 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.