An example explaining how to use bundler to replace externals/submodules

Gemfile

source "http://rubygems.org"

gem "my_awesome_lib",       :path => "../my_awesome_lib"

# or to use directly from a git repository:
# gem "my_awesome_lib", :git => "git://path/to/git/repo/my_awesome_lib.git", :branch => "1.0"

# or just use as a gem (perhaps from your very own gem source):
# gem "my_awesome_lib", ">= 1.0.0"

my_awesome_lib.gemspec

Gem::Specification.new do |gem|
  gem.email = "job.vranish@atomicembedded.com"
  gem.authors = ["Job Vranish"]
  gem.summary = %Q{An awesome library}
  gem.description = %Q{A fake gem to make bundler to what we want}

  files  = Dir['*'].reject {|f| File.directory? f}

  test_files = []

  gem.require_path = '.'   # <-- make sure this includes the path of your ruby file (relative to your .gemspec)
  gem.executables   = []
  gem.files         = files # <-- at a minimum this should include your ruby script
                            # but if you want to eventually package up your library in a gem
                            # (not a bad idea) this needs to include all the files you want to 
                            # include in the gem.
  gem.test_files    = test_files
  gem.name = "my_awesome_lib"
  gem.version = "1.0.0"

  gem.add_dependency 'bundler'
end

my_awesome_lib.rb

class My_Awesome_Lib
  # this little method uses the magic __FILE__ value to generate a path
  # relative to this file
  def self.location
    File.expand_path(
      File.join(
        File.dirname(__FILE__),
        ".")) # <-- change this appropriately if this file not at project root
  end
end

my_awesome_lib_path.rb

require "rubygems"
require "bundler/setup"
require 'my_awesome_lib'

# print out the path to our awesome library
puts My_Awesome_Lib.location