243da973_overnments_Merge____Gongol_com__Factor
[In Brief] The more opportunities for small-to-medium-sized bids and contracts, the healthier the environment for small businesses supplying those goods and services. [Rationale] Suppose a metropolitan area composed of five communities with 50,000 residents each were to consolidate into a single unit of 250,000 residents. In the five-community model, each community could contract out for competitive bids on community services (residential garbage collection, for example). The existence of multiple available contracts would likely support a market for multiple bidders for each community and would be particularly favorable to small businesses and startup firms entering the market. By contrast, the single community of 250,000 would ordinarily offer only a single contract for the same services. Not only would this tend to have a dampening effect on the number of suppliers in the market (since the market is dominated by a single contract and may not contain sufficient opportunities for competitors to remain in business without it), it would also tend to favor larger firms over smaller ones, since the larger firms would be more likely to have existing stocks of capital and equipment large enough to handle the single contract. [Factor] 
Crowding Out of Smaller Service Suppliers
Should City and County Governments Merge? | Gongol.com
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