Loopholes and abuse by government agencies that hand contracts to large corporations without competitive bidding keep small businesses out of the picture.

Open competition lowers taxpayer costs by allowing small businesses in the door.

The federal government consistently fails to meet its small business contracting goals. These goals are mandated by Congress to ensure that small businesses can compete successfully for a specified portion of government spending on goods and services. In 2002, for example, government failure to ensure open competition for small businesses meant that small businesses missed out on $900 million in contracting opportunities. And small businesses lost out on an estimated $1 billion in federal contracting opportunities in 2003.

“Contracting should be accomplished through full and open competitive procedures,” President Bush stated in his Small Business Agenda. However, federal agencies have used loopholes to circumvent attempts to open up bidding. By including phrases like “prime vendor,” “virtual prime vendor” or “third party logistics” that favor large companies over small businesses, agencies have continued to ignore statutes designed to increase participation of small businesses in federal contracts. According to the National Association of Women Business Owners (NAWBO), one-third of businesses are women-owned, yet they represent less than 3 percent of all federal contracts. The government has failed to meet its 5 percent statutory women-owned small business goal, costing these firms billions each year.

"When it comes to contracting opportunities, the primary issue for small business is access to the federal marketplace and the opportunity to compete," Senator Olympia J. Snowe (R-ME), Chair of the Senate Committee on Small Business and Entrepreneurship, said in June 2004. "When small businesses are denied the opportunity to participate in federal procurement, the result is a dramatically-reduced contractor base that takes a toll on the procurement process. Opportunities are lost, costs rise, and efficiencies accrued from innovation are never realized."

ASBL is committed to full and open access for small businesses to government contracts.