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Public-Private Partnerships: What they REALLY Are & How They Hurt Small Businesses

We hear the phrase all the time: Public–Private Partnerships.

It shows up in government announcements, economic development talks, infrastructure proposals, education technology, healthcare modernization, and crisis response.

It sounds harmless — even hopeful.
A “partnership,” right?

But for small businesses and everyday Americans, PPPs have quietly become one of the most influential forces reshaping markets, contracts, and local economies — often without your vote, your input, or your awareness of how they work.

And in many cases, PPPs allow powerful companies to operate outside the guardrails of public oversight, creating consequences that fall hardest on small business owners.

Today, we break that down clearly and in plain English — through the lens of small business survival.

What Exactly Is a Public–Private Partnership (PPP)?

A PPP is when a government agency teams up with a private company to deliver a public service or run a public function.

Common examples include:

• A corporation running a city’s digital systems

• A tech company providing school learning platforms

• A private company distributing federal aid or testing services

• National firms taking over local infrastructure and maintenance

• Pharmaceutical and logistics companies coordinating emergency response

• Private labs running government-funded health testing (GAO, 2017)

While marketed as “efficient,” “cost-saving,” or “innovative,” PPPs shift a great deal of control, money, and data into private hands — often reducing transparency and local participation in the process.

How PPPs Harm Small Businesses

PPPs rarely break the law.
What they do is exploit the gray areas — the places where private and public overlap, and oversight gets fuzzy.

Below are the most common ways PPPs hurt small businesses and everyday Americans.

1. PPPs Eliminate Local Competition by Consolidating Contracts

Instead of 5–20 local contracts (landscaping, HVAC, printing, tech services, cleaning, food service), a PPP often replaces everything with one master contract.

This means:

• Small businesses lose access

• Local dollars flow out of the community

• National firms dominate the market

• Long-standing vendors are pushed out overnight

The Government Accountability Office has repeatedly warned that rapid contracting structures reduce competition and exclude smaller firms (GAO, 2017).

2. PPPs Allow Government to Skip Competitive Bidding

During emergencies — whether pandemics, natural disasters, or agricultural outbreaks — agencies can bypass normal procurement (USDA, 2025).

These exceptions:

• Fast-track big companies

• Remove public input

• Eliminate open bidding

• Shut small businesses out of opportunities for years

Emergency PPPs become long-term power structures.

3. PPPs Introduce Proprietary Systems That Small Businesses Can’t Use

Once a private vendor controls:

• Data systems

• Payment platforms

• Public portals

• Infrastructure software

• Certification tools

…small businesses cannot integrate with it.

This creates artificial barriers, protecting the large vendor from competition.

4. PPPs Shift Public Money Into Corporate Control

Public funds that once supported:

• Local maintenance

• Local suppliers

• Local services

…are converted into guaranteed streams for national corporations with lobbyists, federal influence, and the ability to win contracts before small businesses even hear about them.

This isn’t hypothetical — the USDA’s 2025 funding structure explicitly directs billions toward large private partnerships (USDA, 2025).

5. PPPs Reduce Oversight & Transparency

Government agencies are subject to:

• Public records laws

• Transparency requirements

• Audits

• Citizen review

Private companies are not.

So when a public service moves to a PPP, oversight drops dramatically:

• FOIA cannot access proprietary vendor logs

• Contract terms are sealed

• Pricing becomes opaque

• Data systems become inaccessible

This is the “go-around” effect — PPPs legally bypass the transparency that public agencies must follow.

Why Everyday Americans Should Care

You don’t have to be a business owner to feel the consequences.

PPPs influence:

• The cost of services

• The quality of infrastructure

• Access to healthcare systems

• School technology and student data

• Local taxes and public spending

• Emergency response and crisis systems

When transparency decreases, costs rise and accountability collapses.
When local businesses disappear, so does community wealth.
When private companies control public data, the public loses power.

PPPs aren’t inherently harmful — but unchecked PPPs create power imbalances that everyday Americans feel deeply.

Call to Action

This is the beginning of a series.

Next week in The Launch Dock:

-How PPPs consolidate entire markets
-Why PPP data systems put small businesses at a disadvantage
-How PPPs transform emergencies into long-term monopolies
-Action steps small businesses can take to protect themselves

Knowledge is leverage — and in this series, we’re giving small businesses the leverage they’ve been denied.

References

Government Accountability Office. (2017). Animal disease surveillance: Improvements needed in U.S. efforts to control highly pathogenic avian influenza. https://www.gao.gov/products/gao-17-360

United States Department of Agriculture. (2025, February 26). USDA invests $1 billion to combat avian flu and reduce egg prices [Press release]. https://www.usda.gov/about-usda/news/press-releases/2025/02/26/usda-invests-1-billion-combat-avian-flu-and-reduce-egg-prices

United States Department of Agriculture, Animal and Plant Health Inspection Service. (2025). Highly pathogenic avian influenza—Poultry: Indemnity and compensation (9 C.F.R. pt. 56). https://www.aphis.usda.gov/livestock-poultry-disease/avian/avian-influenza/hpai-poultry/indemnity-compensation

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