In the recent recession, many businesses turned to the Federal Government for business out of necessity to "stay alive". After all, the government was spending money when most other consumers were not. As more small businesses got into government contracting, more of these contractors realized how ill prepared they were to deal with the Federal Government. The Federal Government has a mandate to purchase at least 20% of their procured items from small business. In addition, the Small Business Innovative Research program is designed to help fund the development of small business. There are "set asides" for small businesses, disadvantaged businesses and special loans created for small businesses. Still, it seems that the government makes it difficult for the small business as well. For instance, the Office of Advocacy, Small Business Administration has done research that shows small companies (less than 20 employees) can spend as much as 36% more than larger businesses just to comply with Federal Regulations. Many times larger businesses have staff members that can deal strictly with federal regulations but the small business cannot afford a "specialist" on their staff. This expertise can be outsourced or it can be accomplished in one of the employees "spare time". Normally the "spare time" approach ends up in mistakes in complying with one or more regulations which further exacerbates the problem. President Obama seems to be focusing on this issue and has issued a memorandum about regulatory flexibility. Not sure that is enough relief.
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