Government procurement is an important source of revenue for many businesses in the Chicagoland area. For small businesses, securing government contracts can provide access to larger markets and a more predictable income stream, which is critical for maintaining cash flow and business survival.
Despite significant federal spending on procurement, only a small portion of these funds reach small businesses. There has also been a decrease in the number of small businesses receiving contracts. Minority-owned business enterprises (MBEs) face even greater challenges, as they are often underrepresented among contract recipients.
Lincoln J. Chandler, PhD, founder of Chandler Decision Services LLC and a Chicago-based strategy consultant, data analyst, and MBE owner, highlights that while government procurement offers opportunities for small firms, there are unique barriers—especially regarding the MBE certification process—that need to be addressed.
Chandler’s experience includes helping public, private, and nonprofit organizations with large-scale changes since 2013. His work ranges from developing free data reporting tools for local governments to leading wellness surveys in Cook County that identified gaps in employee health programs.
Small businesses encounter several obstacles in the procurement process. The procedures are complex and often inefficient. Solicitation and bidding require quick responses; mistakes can result in disqualification from consideration.
Additionally, outdated tracking and data systems make it difficult for small firms to access necessary information during contracting stages. Many systems were not designed with transparency or cross-department collaboration in mind.
Smaller companies often lack awareness of available contracting opportunities because they are not connected to procurement agencies or established business networks. This disconnect means they may miss out on potential bids altogether.
Chandler recommends that small businesses avoid navigating this process alone: “Even when they do secure a contract, support and mentorship are scarce, making it difficult to meet .”
The costs associated with becoming “contract-ready” can be high. As Chandler notes: “When it comes to the MBE certification program...the process can unintentionally create extra hurdles, adding layers of scrutiny and administrative burden for the very businesses it’s meant to support.”
Financial limitations further complicate matters for smaller firms competing against larger ones. Requirements such as insurance or bonding can be difficult for them to fulfill.
Many procurement opportunities are structured with larger companies in mind, making it hard for smaller or newer firms to compete effectively.
Chandler advises: “Chandler’s top piece of advice is to get your operational house in order before engaging in procurement.” He also emphasizes the importance of budgeting time: “He also stresses budgeting for a long timeline.”
In summary, while government contracts have the potential to help small businesses grow and stabilize their operations, barriers related to complexity, resources required, and slow processes remain significant challenges. Streamlining compliance requirements and improving access could help ensure fair competition among all types of businesses.