The Incredible Shrinking Company: Corporate giants snag federal small business set-aside contracts

By Christopher Moraff
January/February 2006
Dollars & Sense Magazine

Between 2002 and 2005, St. Augustine, Fla., exercise equipment vendor Raul Espinosa watched mystified as, one after another, a series of Air Force contracts he had placed bids on were given to other companies. Of the 14 bids that Espinosa has documented, his company, FitNet International, did not win one. To his surprise, Espinosa learned that some of the competitors he was losing contracts to had never even bothered to bid on them.

Espinosa was no stranger to adversity. At 14 he came to the United States alone from Cuba and managed to work his way through college and graduate school. He formed FitNet in 1995 to sell exercise equipment to the U.S. military. A certified minority-owned small business, FitNet describes itself as a purchasing alliance that represents over 400 equipment suppliers. The company has three employees and grosses under $1 million a year.

Now, Espinosa was getting a first-class lesson in corporate pandering that he'd never bargained for; it would take him three years to uncover the full story.

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