The obstacles small businesses face trying to win their first Defense Department contracts will likely grow, and some existing small defense firms could be driven out of business in the coming years, amid billions in planned defense cuts and the drawdown from two wars.
The cuts could stall progress in states such as North Carolina, home to the Army's Fort Bragg and the Marines' Camp Lejeune, where leaders have made it a priority to create jobs by helping entrepreneurs take advantage of the state's large military footprint.
Business and political leaders in Florida, South Carolina and other states have created public-private organizations in recent years to help entrepreneurs capture money from the Defense Department. The potential is staggering: The federal government spends about $300 billion annually on defense contracts with a goal that 23 percent go to small businesses.
Many of the small businesses are run by veterans who have spent years trying to win contracts that could anchor their companies' futures.
Experts say those small businesses are the most vulnerable during reductions because they're less flexible. Their survival often is connected to one or a few specific aspects of the military that can be cut or eliminated.
