An analysis of reasons commercial entities prefer not to participate in Defense Business
Randall, Susan O.
Lamm, David V.
Stone, Mark W.
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In 1987, Dr. David V. Lamm conducted a study to identify the extent to which firms have taken the position of refusing to participate in Department of Defense (DoD) business and the principal reasons for their refusal. Since his study, major changes have occurred in the acquisition environment resulting from the collapse of the Soviet Union and subsequent Defense budget reductions. Such changes include passage of acquisition reform legislation that has prompted initiatives focused on streamlining the procurement process. The purpose of this study is to identify the extent to which companies prefer to not do business with DoD and the associated reasons for that preference in today's acquisition environment. A survey was sent to 1,300 companies in various industries. Analysis of the responses indicated that 42% of the respondents (primarily small businesses) refused to conduct business with the DoD, twice the proportion of 1987. Four of the five top concerns for not participating in Defense business in 1997 replicated the 1987 study's most serious concerns: burdensome paperwork, Government bidding methods, more attractive commercial ventures and low profits. This study analyzes industry's concerns and the implications for small and large businesses, subcontractors and prime contractors, and major industries
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