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Squeezed Out?

Is there any room left for small businesses in federal contracting?

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This story appears in the April 2003 issue of Entrepreneur. Subscribe »

With the Bush administration opening 850,000 government jobs to private bidding and the Department of Homeland Security getting off the ground, it's the best of times to be a federal contractor. Technology, engineering and outsourcing companies are expected to benefit from new government projects coming down the pike. "It's a good time for small businesses to get on award schedules," says Bruce Shirk, a government contracts attorney with law firm Powell, Goldstein, Frazer & Murphy LLP in Washington, DC.

Or is it the worst of times for small businesses? A recent report commissioned by the SBA's Office of Advocacy found that 51 percent of federal contracts awarded in 2001 were "bundled," meaning many individual contracts were grouped into one large contract. For the government, bundling increases efficiency and decreases administrative costs.

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