Why Federal contracting processes are slow

The entire Federal contracting process is largely premised on the idea that small businesses must receive preferential treatment. To achieve this, the Federal Government has created a tangled web of contracting processes that agencies must go through in order to purchase its goods and services. As all tangled webs are, these processes are very inefficient and wasteful of, if not resources, government time.

So why is this done? For one reason, really: because it is believed that small businesses are job creators. The government uses its own internal procurement rules to favor small businesses because it is believed that this will also help the economy as a whole.

The problem with this is that it is just not true.

See the rest here.

Leave a Comment


Leave a Reply

Sterling Whitehead

Interesting concept that small business that explode into giants, and not small businesses that stay small, are the real American job creators. Can you please point me towards an article that quotes stats on this?

Andre Castillo

If you click on the link at the bottom of the post (where it says “See the rest here”), it goes into more detail, and includes a link to an article by Reason Magazine that provides the research I think you’re looking for.

Russell Huffman

I have to take issue with this article’s erroneous assertion that “the entire Federal contracting process is largely premised on the idea that small businesses must receive preferential treatment.” From a historical perspective, this is certainly not the case. The first U.S. federal procurement regulations were enacted in the early 1800’s, primarily to prevent elected officials from benefiting from government procurement in the form of bribes or political favors (Worthington & Goldsman, Contracting With the Federal Government, 1998). Following World War II, congress passed the Armed Services Procurement Act of 1947 (ASPA) and Federal Property and Administrative Services Act of 1949 (FPASA); the precursors for our current set of procurement regulations. It wasn’t until the passage of the Small Business Act of 1953 (more than 150 years after the first federal contracting laws were enacted) that small business considerations entered the picture. While the Small Business Act may have further complicated federal procurement, it is quite a stretch to imply that our current procurement processes were primarily established to provide “preferential treatment” to small businesses. Many more factors contributed to the current state of the FAR, and some of the most comprehensive reforms were in reaction to allegations of malfeasance by LARGE defense contractors during the cold-war military buildup.