Business Opportunities Weblog

July 22, 2008 by Rich Whittle | 0 Comments

Associated Press:

Small firms that want to do business with the federal government must keep three cardinal rules in mind: Location, location, location.

Companies within 50 miles of the White House earn nearly $1 of every $3 in federal contracts given to small firms, The Associated Press has found. And small companies competing for federal contracts in the other 99.8 percent of the United States? They may pay the same taxes, do the same type of work and produce the same result, but the deck is stacked against them.

“Geography matters,” says Sandy Levine, head of an Olney, Md.-based public relations firm.

Federal contracting work has exploded in recent years. In 2000, the government paid companies about $200 billion to do its work. Within five years, that amount had roughly doubled, according to a June 2006 report by the House Government Oversight committee.

The AP analyzed 9 million domestic transactions worth nearly $1 trillion handed out from the 2004 through the 2007 budget years. About $212 billion of that went to small businesses, as classified by the General Services Administration — the agency that maintains most of the government’s contract records.

Nearly $70 billion of the contract money awarded to small businesses stayed within 50 miles of the White House — even though those companies account for fewer than 2 of every 100 small firms in the United States, and the area encompasses about 0.2 percent of the nation’s land area.

Photo by MSDesigns.

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Tags: Competition, Funding, Government