Federal News Network: Why do so many contractors leave the federal market each year?

Acquisition officials, especially in the Defense Department, worry about why the roster of would-be federal contractors seems to contract every year. Small companies in particular seem to be departing. If could be, the ever-expanding list of rules are driving them away. To get perspective, the Federal Drive with Tom Temin spoke with long-time federal sales and marketing consultant, Larry Allen…

Tom Temin Right. And I guess sometimes the government maybe doesn’t fully understand the costs, two businesses of complying with some of these requirements.

Larry Allen Right. They want to at the same time, Tom, attract new businesses, particularly small businesses. This administration has an initiative to do more business with small disadvantaged businesses where you can be a disadvantaged business of any stripe by having to pay more to comply with a new laundry list of government rules and regulations that impact your contract. You’re going to have a very tough time attracting these companies. As you implied in your opening, Tom, you’re going to have a tough time keeping some of the companies that have been in this market. It’s expensive to comply with new rules, and we see businesses leaving this market every year. I talked to a small business just last week that’s been in the government market for over 40 years. They’re looking hard, at whether or not they can even stay in this market. And the number one reason is, the number of new rules and regulations that they have to gear up for. They just don’t have the revenue to justify that type of investment… Read the full article here.



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