Yep, we see this in government contracting too: selling stuff to the government, or bidding on government contracts, means jumping through all kinds of crazy hoops. So small firms for the most part don't bother, and the only companies that do are ones (usually large ones) that are specialized for that task, but can't compete in the private sector, so people wonder why toilet seats cost $600. The only companies willing to sell toilet seats to the government and deal with the regulations are going to charge a fortune for it, and American Standard or Home Depot just don't bother.

(With the US government, it isn't just behemoth corporations; there's big incentives for some small firms too, so there's a bunch of tiny companies that are highly specialized in milking that gravy train.)