ASBCC Report Sounds Alarm on Vanishing Small Business Federal Suppliers
49% Decline Threatens Competition, Innovation, and Economic Growth
WASHINGTON, DC, (FOR RELEASE on March 17, 2025) – A sobering new report from the American Small Business Chamber of Commerce (ASBCC) and the Small Business Advocacy and Government Contracting Council (SBAGC) reveals a catastrophic 49% decline in small businesses participating in federal contracting since FY 2008. Despite an overall 27.5% increase in small businesses nationwide, the number of small firms securing federal contracts has dropped from 144,774 in 2008 to just 73,833 in 2023.
This dramatic loss raises serious concerns about competition, supply chain stability, and economic resilience. While total federal spending on small business contracts soared from $62.43 billion in FY 2008 to $175.23 billion in FY 2024, those dollars are increasingly concentrated in the hands of fewer firms—shutting out thousands of small businesses that once thrived in federal contracting.
A Call for Urgent Action
Charmagne Manning, President of ASBCC, warns that these numbers are more than just statistics—they represent lost jobs, lost innovation, and lost opportunities for American communities.
"This is a five-alarm fire for America’s small business community. Every time a small business loses access to federal contracts, we don’t just lose a vendor—we lose jobs, ingenuity, and economic vitality. Small businesses are the backbone of this country, and right now, that backbone is being eroded by policies and procurement practices that favor consolidation over competition. We cannot stand by and allow this crisis to deepen."
Manning emphasized that small businesses are more than just suppliers—they are problem-solvers, innovators, and job creators.
"Federal contracts have the power to transform small businesses—allowing them to grow, hire more people, and bring cutting-edge solutions to government challenges. But instead of expanding opportunities, we’re seeing doors shut. The message this trend sends is clear: 'Unless you're already big, there's no room for you.' That is unacceptable."
Key Findings from the Report:
Small Business Exodus: The federal government has lost nearly 70,000 small business vendors over the past 15 years.
Market Concentration: Fewer firms are securing larger shares of federal contract dollars, creating barriers for new entrants.
National Security Risks: The Department of Defense has seen a 40% drop in small business vendors, increasing vulnerabilities in critical supply chains.
Economic Impact: Fewer small businesses in federal contracting means higher costs, less innovation, and diminished economic growth.
Policy Recommendations
The ASBCC calls on policymakers and federal agencies to take immediate and decisive action to halt this alarming trend by:
Opening doors for new small business entrants into federal contracting.
Ending excessive contract bundling and consolidation that push out small firms.
Strengthening enforcement of small business participation goals to create a fairer, more competitive marketplace.
Reducing regulatory barriers that make it difficult for small businesses to win contracts.
Time to Act
"This is not a problem for tomorrow—it’s a crisis today. If we don’t act, we risk losing the innovation, agility, and problem-solving power that small businesses bring to the table," said Manning. "We urge federal leaders to recognize the stakes and make meaningful changes before it’s too late. America’s small businesses—and the future of federal contracting—depend on it."
Read the Full Report: Stop the Loss: Small Business Federal Suppliers.
About The American Small Business Chamber of Commerce™
The American Small Business Chamber of Commerce™ is the nation’s leading independent force working to open the doors to small business supplier contracts. ASBCC has developed a unique position within the government supplier community as a key linkage point where relationships and partnerships are fostered between small businesses, government agencies, large primes and policy makers. The association connects these stakeholders to power greater participation and success by small businesses in government contracting. For additional details, go to http://asbcc.org.
Media Contact:
Shelby McCollough
The American Small Business Chamber of Commerce™
memberservices@uswcc.org
(202) 618-3037