Nearly 33% fewer small businesses participate in the government market today compared to FY’14 according to information released last week by Bloomberg Government.  While agencies, particularly DOD, state that they want more small firms to participate, the proliferation of special, government-only rules has had the net impact of driving many such businesses to the federal market sidelines (see article below).  The simple fact of the matter is that businesses of any size that succeed in the government market today are those that specialize in doing so. Only those companies that can, or must, comply with myriad procurement rules can maintain the necessary infrastructure.  Bloomberg’s research again points the way.  “Despite the drop in vendor count small businesses are winning more procurement dollars…”, according to their article on the much-anticipated NASA SEWP VI procurement.  Bloomberg attributes this phenomenon to the fact that small firms that prime government-wide acquisition vehicles traditionally do better than small firms competing for business on the open market.  Implicit in this is the fact that successful federal small business prime contractors are not one or two person “mom and pop” shops.  This scene would be bad enough on its own, but it also underscores a particularly important issue right now:  The federal government simply can’t attract the types of businesses creating technologies necessary to maintain or enhance our national security.  Some acquisition professionals postulate that even those companies that do participate don’t always offer their latest and best technologies due to concerns over pricing or cost, rights in data, or acquisition rules that place undue risk on industry.  In short, a federal acquisition system that tries to be everything ends up being not much of any one thing.  Legislators and rule makers should take note.