Supply chain management fundamentals and practices

Contract Bundling Impact on Small Business Preference and Minority Set Aside

Small and minority owned businesses are required by law to receive a certain percentage of bundled contracts which reduces the amount available for large businesses, and often causes a burden to the small businesses.

Causes: Bundling occurs because contracts are often close enough to the same that they are more easily completed together. However, some of these contracts become greater than the scope of a small or minority business.

Impact: Small and minority owned businesses are often better off not taking these larger contracts.

Reduce the bundling requirement.

Short-term solution: Make smaller contracts available to smaller companies at a greater rate, and reduce the number of bundled contracts that contracting entities have to give to small companies.

Long-term solution: Rewrite the law so that small companies receive more of a benefit from bundled contracts. Ensure that there is a geographical requirement included, and that the cost to the company with the winning bid is reduced.

3. Introduction

a. Statement of the Problem: Small businesses and minority owned companies are at a disadvantage so they are given preferences in contracting. This devalues contracts and increases costs across the board. But, as far as bundled contracts and the supply chain is concerned, it hurts all concerned in the process.

b. Definitions: Certain necessary terms are defined.

c. Research question: How does contract bundling impact mandatory minority set-asides and small business preference laws?

4. Literature Review

a. A review of supply chain management, and small business preferences and minority set-asides.