Federal contract bundling : how can small business compete? : hearing before the Committee on Small Business, House of Representatives, One Hundred Fourth Congress, first session, Washington, DC, October 11, 1995

United States. Congress. House. Committee On Small Business

Sujets

• Small business
• United States

Informations

• Publié par: les_archives_du_savoir
• Nombre de lectures: 6
• Langue: English
• Poids de l'ouvrage: 10 Mo

Extrait

W FEDERAL CONTRAa BUNDUNG: HOW CAN SMALL
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BUSINESS COMPETE?
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Hou Can...Contract Dundling:Federal
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
WASHINGTON, DC, OCTOBER 11, 1995
Printed for the use of the Committee on Small Business
Serial 104-52No.
OfPm^^^
U.S. GOVERNMENT PRINTING OFFICE
20-278CC WASHINGTON : 1996
For sale by the U.S. Government IMnting Office
Superintendent ofDocuments, Congressional Sales Office, Washington,DC 20402
ISBN 0-16-052486-5^Sy FEDERAL CONTMa BUNDUNG: HOW CAN SMALL
^
BUSINESS COMPETE?
1:104-52y 4.SM
Dundling: Hou Can...Federal Contract
HEARING
BEFORE THE
COMMITTEB SMALLON BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
WASHINGTON, DC, OCTOBER 11, 1995
Printed for the use of the Committee on Small Business
Serial No. 104-52
:J^bu
Hay 03m
U.S. GOVERNMENT PRINTING OFFICE
20-278CC WASraNGTON : 1996
For sale by the U.S. Government Printing Office
Superintendent ofDocuments, Congressional Sales Office, Washington,DC 20402
ISBN 0-16-052486-5COMMITTEE ON SMALL BUSINESS
JAN MEYERS, Kansas, Chair
HEFLEY, Colorado JOHN J. LaFALCE, New YorkJOEL
New Hampshire IKE SKELTON, MissouriWILLIAM H. ZELIFF, JR.,
JAMES M. TALENT, Missouri RON WYDEN, Oregon
NORMAN SISISKY, VirginiaDONALD A. MANZULLO, Illinots
PETER G. TORKILDSEN, Massachusetts KWEISI MFUME, Maryland
R08COE G. BARTLETT, Maryland FLOYD H. FLAKE, New York
LINDA SMITH, Washington GLENN POSHARD, Illinois
FRANK A. LOBIONDO, New Jersey EVA M. CLAYTON, North Cartdina
ZACH WAMP, Tennessee MARTIN T. ME|:HAN, Massachusetts
SUE W. KELLY, New York NYDIA M. VELAZQUEZ, New York
DICK CHRYSLER, Michigan CLEO FIELDS, Louisiana
JAMES B. LONGLEY, JR.. Maine WALTER R. TUCKER III. California
WALTER B. JONES, JR., North Carolina EARL F. HILLIARD, Alabama
Arizona DOUGLAS TETE" PETERSON, FloridaMATT SALMON,
MississippiVAN HILLEARY. Tennessee BENNIE G. THOMPSON.
PennsylvaniaMARK E. SOUDER, Indiana CHAKA FATTAH,
SAM BROWNBACK, Kansas KEN BENTSEN, Texas
STEVEN J. CHABOT, Ohio WILLIAM P. LUTHER, Minnesota
RhodeSUE MYRICK, North Carolina PATRICK J. KENNEDY, Island
DAVID FUNDERBURK, North Carolina JOHN ELIAS BALDACCI, Maine
JACK METCALF. Washington
STEVEN C. LaTOURETTE, Ohio
Jenifer Loon, Staff Director
Jeanne M. RoslaNOWICK, Minority Staff Director
uO'V-
it^^"^e^m
(II)CONTENTS
Page
Hearing held on October 11, 1995 1
WITNESSES
October 11, 1995
Alf, Chris, President, National Air Cargo 6
Beres, Allan W., Assistant Commissioner, Oilice of Transportation and Prop-
erty Management, General Services Administration, accompanied by Caro-
Alston 11lyn
Foster, Jim, Executive Director, Airforwarders Association 8
W., Chief Counsel for Advocacy, Ofiice of Advocacy, UJ5. SmallGlover, Jere
Business Administration 32
Gremmels, Bill, President,AALCO Forwarding, Inc., Overland Park, Kansas . 26
American Movers Conference, Alexandria, Vir-Harrison, Joseph,
30ginia
Donald H., President, Household Goods Forwarders, Association ofMensch,
Alexandria, Virmnia 28America, Inc.,
Chief of Staff for Operations, Military Traffic Manage-Moore, Robert, Deputy
Command 23ment
the State of NewQuinn, Hon. Jack, a Representative in Congress from
York 4
APPENDK
Opening statements:
Plaie, Hon. FloydH 41
LaFalce, Hon. John J 42
Meyers, Jan 44
Skelton, Hon. Dee 48
Prepared statements:
50Alf, Chris
108Beres, AllanW
Foster, Jim 112
121Glover, JereW
127Grenunels, Bill
Harrison, Joseph 130
Mensch, DonaldH 148
177Moore, Robert
Quinn, Hon. Jack 187
Additional material:
Letter from Chairwomen Meyers to Mr. Allan Beres, Assistant Commis-
sioner, Ofiice of Transportation and Property Management, General
Services Administration 204
Second letter from Chairwoman Meyers to Mr. Allan Beres, Assistant
Commissioner, Transportation and Property Management,Office of
General Services Administration 206
Chairwoman Meyers Steven Kelman, Administrator,Letter from to Mr.
208Ofiice ofFederal Procurement Policy
Supplemental Statement for the Record 210
Letter Glover, Counsel for Advocacy, SBA Ofiicefrom Mr. Jere Chief
ServicesofAdvocacy to Mr. Frank Pugliese, Jr., Commissioner, General
Administration 211
(III)IV
P«fe
Additional material—Continued
Response to Committee questions from Ms. Mary Lou McHugh, Assistant
TransportationDeputy Under Secretaty of Defense, Policy, Department
ofDefence 216
ExecutiveComments of Mr. Chris Alf, President and Chief Officer, Na-
tional Air Cargo 218
Industry Benchmarking Survey Report . 230Reengineering Personal Property
Response to Committee questions from Mr. Jere Glover, Chief Counsel
for Advocacy, SBA Oflice ofAdvocacy 231
Conmients of Mr. James Foster, Executive Director, Airforwarders Asso-
ciation 234
Mr. William Gremmels, President, AALCO Forwarding, Inc.Letter from
Chairwoman 235to theFEDERAL CONTRACT BUNDLING: HOW CAN
SMALL BUSINESS COMPETE?
WEDNESDAY, OCTOBER 1995.11,
House of Representatives,
Committee on Small Business,
Washington, DC.
The committee met, pursuant to notice, at 2:10 p.m., in room
2359-A, Raybum House Office Building, Hon. Jan Meyers (chair-
woman of the committee) presiding.
Chairwoman Meyers. The meeting is called to order.
Our hearing today will focus on Federal contract bundling and
its effect on small business. As many ofyou will recall, the signifi-
cance of this issue was emphasized by the delegates to the 1995
White House Conference on Small Business. Broadly defined, con-
tract bundling is the practice of consolidating Government con-
tracts by limiting access and the opportunity to compete in the pro-
curement process.
This committee has addressed this issue in the past, although
from a broader perspective. Today we continue our oversight re-
sponsibilities by focusing on two specific industries faced with pro-
posals to bundle Federal procurement contracts. Our specific inter-
est this afternoon is to examine governmental efforts to increase ef-
ficiency, while at the same time evaluating the effects that these
efforts may have on small business.
The first industry we will consider is the air freight forwarding
industry, which performs the vital service of shipping heavy cargo
for Government agencies. It is not surprising that the vast majority
of this industry's business is with the Department of Defense.
Under the current procedures, any air freight forwarding com-
pany wishing to do business with the Federal Government gen-
erallv submits a bid to the Government agency needing heavy air
freight services. As a result, free and open competition character-
izes this system.
Under a new proposal by the General Services Administration,
any private air freight forwarding company may bid on a contract
provided that the company can meet numbera of stringent require-
ments. One of our principal concerns with this proposal is whether
it will force small businesses in this industry out of business by re-
quiring them to demonstrate impossibly high levels of past per-
formance in order to be awarded Government contracts.
The second industry that willwe examine today is the household
goods shipping industry. This industry is responsible for moving
the personal goods of thousands of military personnel and their
(1)families between domestic and international military installations
every year.
Under the current procedures, any private household goods ship-
per can bid on any channel or route between military installations
months. Whileevery 6 the lowest bidder wins on each route, there
trafficis usually far too much for any one companv to handle.
Therefore, second round of rate filings are permitted,a and compa-
nies are allowed to exercise a "me too" provision, which allows com-
originalpanies who lost the bid to handle excess traffic at the origi-
winner's low rate. This ensures opennal competition for small
business and enables the Government to handle excess capacity at
the lowest possible cost to the taxpayer.
Under a new proposal by the Military Traffic Management Com-
mand, each channel or route would be bid on every 2 years with
three renewal options on a "winner-take-all" system. Thus, a single
company could win the route for up to 5 years and the pool of com-
panies who today handle excess capacity would all be eliminated.
In addition, this new proposal would also reverse the current ex-
emption from the Federal Acquisition Regulations, the FAR, for
shipping many ofhousehold goods contracts. As us know, the FAR
is a complex series of regulations and specifications and is cur-
rently major overhaul program. I am very concernedsubject to a
small businesses in this industrythat this proposal may force out
business moving winner-take-all bidding system. In addi-of by to a
tion, unless FAR is substantially modified, small business willuie
and unnecessary administrative burdensbe subjected to costly
under tnis proposal.
While it IS important to examine these two specific procurement
proposals, we must keep in mind that contrac