Contract Bundling Guide 2025: Small Business Impacts & Protections
Complete guide to contract bundling in government contracting. Learn what bundling is, how it affects small businesses, bundling restrictions, and strategies for competing on bundled contracts.
Quick Answer: Contract Bundling
Contract bundling combines multiple smaller contracts into one larger contract, which can reduce opportunities for small businesses. Federal law (FAR 7.107) restricts bundling and requires agencies to justify when bundling is necessary. Small businesses can compete through teaming or joint ventures.
What is Contract Bundling?
Contract bundling occurs when an agency consolidates two or more requirements previously performed under separate smaller contracts into a single, larger contract that is unlikely to be suitable for small business.
Examples of Bundling
- →Combining IT support contracts from multiple locations into one national contract
- →Merging separate facilities maintenance contracts into one enterprise-wide contract
- →Consolidating regional security services into a single contract
Bundling vs Consolidation
Key Differences
Contract Bundling
- • Combines contracts previously held by small business
- • New contract unsuitable for small business
- • Stricter justification requirements
- • Requires SBA review
Contract Consolidation
- • Combines requirements regardless of prior holders
- • May or may not affect small business
- • Less strict requirements
- • Market research required
Bundling Restrictions
FAR 7.107 places significant restrictions on bundling to protect small business opportunities.
Agency Requirements
Market Research
Agencies must conduct market research to determine if bundling is necessary
Measurable Benefits
Must demonstrate substantially greater benefits than alternatives
SBA Notification
SBA must be notified and can challenge bundling decisions
Documentation
Written justification required in the contract file
Substantially Greater Benefits
Bundling is only justified if benefits (cost savings, quality, acquisition cycle time, technical capability) substantially exceed what would be achieved through smaller contracts.
Strategies for Small Businesses
Competing on Bundled Contracts
Form Joint Ventures
Partner with other small businesses to compete as a team
Teaming Arrangements
Create prime-sub relationships to meet capacity requirements
Mentor-Protégé Agreements
Partner with large businesses under mentor-protégé programs
Challenge Improper Bundling
Contact SBA's Procurement Center Representative if bundling is unjustified
Subcontracting Opportunities
Even if you can't win as prime, bundled contracts often have significant small business subcontracting requirements. Position yourself as a subcontractor to the winning prime.
Frequently Asked Questions
How do I challenge bundling?
Contact the SBA's Procurement Center Representative (PCR) for your area. They can review the bundling decision and challenge it if not properly justified.
Can bundled contracts be set aside for small business?
Yes, if market research shows that small businesses (including through teaming or joint ventures) can perform the work. Agencies must consider set-asides before bundling.
What dollar threshold triggers bundling rules?
Bundling restrictions apply when the consolidated contract exceeds the simplified acquisition threshold ($250,000) and combines requirements previously suitable for small business.
Find Small Business Opportunities
Discover contracts sized right for your business—set-asides and unbundled opportunities.
Get Started →Related Articles
Ready to Find Your Next Contract?
Get instant access to thousands of government construction bids with our AI-powered platform.
Get Started