Government procurement is a vital process for many businesses in Chicagoland. Funding received through government contracts often ensure that necessary resources are acquired for businesses to operate efficiently and successfully. 

For small businesses, cash liquidity is also a key predictor of survival, so securing these contracts not only opens the door to larger markets but also provides a more stable and predictable revenue stream. 

Yet, despite the federal government spending over $600 billion in contracts in 2021, only 27% of funding went to small businesses with 4,000 fewer small businesses receiving contracts. Minority-owned business enterprises (MBEs) face even deeper disparities, with government contracts often being disproportionately awarded along racial lines. 

Lincoln J. Chandler, PhD, a Chicago-based strategy consultant, data analyst, MBE owner and founder of Chandler Decision Services LLC believes that while the process offers potential for small businesses, unique barriers still need to be addressed, especially for the MBE certification process. 

Chandler has helped public, private, and nonprofit leaders navigate large-scale transformations since 2013. His projects include creating cost-free data reporting tools for the City of Gary, redesigning discipline reporting for a major school district, and leading wellness surveys for Cook County that uncovered gaps in employee health programs. With experience across government, education, and nonprofits, Chandler offers a well-rounded perspective on procurement challenges. 

Small businesses face several unique and significant barriers: 

1. Complexity of the Procurement Process 

Procurement is notoriously complex and inefficient, creating steep challenges for small businesses. The solicitation and bid processes often involve fast turnaround times, leaving little room for error; even a single mistake can disqualify a firm from consideration. 

Chandler explains, 

“The bigger the government, the more complex the process can be… there’s a whole other level of compliance because you’re public. You’re going to have a long path to approval because there’s a lot of oversight — councils, alders, external accountability — and all these things take time.” 

Additionally, procurement tracking and data systems are often outdated and difficult to navigate. Many of these legacy systems were not built with transparency or cross-department coordination in mind, limiting businesses’ access to essential information during various stages of the contracting process. 

2. Limited Networks and Knowledge 

Compared to larger firms, small businesses frequently have limited awareness of contracting opportunities. Many are not connected to procurement agencies or established business networks, which means they often miss out on bids entirely. 

Chandler advises that small businesses should avoid navigating this process in isolation: 

“Ideally, if you’re a small business owner, you’re not just out here in a boat trying to make it happen on your own… you’re connecting with folks, maybe other Chamber members, people further ahead in their journey. You can get real practical advice tailored to the exact situation you’re trying to pursue.” 

Even when they do secure a contract, support and mentorship are scarce, making it difficult to meet compliance requirements. Contract registers and procurement forecasting are also not widely accessible, preventing small businesses from preparing for opportunities in advance. 

The cost of becoming “contract-ready” can be staggering. As JPMorgan Chase & Co. (2022) notes, “The cost of cybersecurity planning assistance can range from $50,000 to $500,000 for firms to participate in large corporate supply chains and become contract-ready”. 

When it comes to the MBE certification program, Chandler acknowledges its goal of promoting equity and opening doors for minority-owned businesses, particularly since certification is often required to compete for set-aside government contracts. However, he notes that the process can unintentionally create extra hurdles, adding layers of scrutiny and administrative burden for the very businesses it’s meant to support. 

“The minority business enterprise set-aside… is a good program to have, but it’s also kind of an imperfect solution. It ironically results in more scrutiny and more hoops to jump through, which means more work for minority business owners before they can even get to the point of bidding — while others have a clearer path.” 

3. Financial and Resource Limitations 

Small businesses also struggle with fewer financial resources and less access to generational wealth, which makes it harder to compete with larger firms. Government contracts often come with burdensome insurance or bonding requirements that smaller businesses find difficult to meet. 

Additionally, many procurement opportunities are large-scale projects designed with high-capacity firms in mind, leaving smaller or emerging businesses unable to realistically compete. 

Advice for Small Businesses 

Chandler’s top piece of advice is to get your operational house in order before engaging in procurement: 

“You really want to make sure you have some real operations underlying what you’re doing… your books are good, your taxes are up-to-date, you’ve got a good sense of cash flow, and ideally you have a lawyer or someone you can call to help navigate. You want to be able to present like a traditional business that’s operating well — even if you’re not growing fast, at least you’re not struggling.” 

He also stresses budgeting for a long timeline: 

“What might take three months in an ordinary setting might take closer to six months or a year, depending on the municipality you’re dealing with. You have to factor that into cash flow and staffing.” 

Government procurement can open doors to growth and stability for small businesses, but as Chandler’s experience shows, the process is often complex, resource-heavy, and slow-moving. By streamlining compliance, improving access to opportunities, and fostering stronger support networks, agencies can help level the playing field, ensuring that small and minority-owned businesses have a fair chance to compete and succeed.