Small contractors submitted fewer offers and succeeded less often in winning contracts in 2010, according to a survey by American Express Open.

The contractors reported they are investing more time and money going after contracts.

Federal contract spending declined in 2010 for the first time in decades. Perhaps as a result, small contractors reported submitting an average of just 3.4 offers in 2010, about half as many as the year before.

The average success rate over a three-year period declined to under 38%, from 41% in the previous three years.

The average small contractor spent nearly $104,000 pursuing contracts last year, compared with $86,000 the year before. The increase in investment was largest for the smallest firms; those with under $250,000 in revenue said their spending more than doubled year-over-year, to $25,541.

Other key findings:

If at first you don’t succeed, try again. And again. And again. Small contractors said they submitted an average of 4.4 bids before receiving their first federal contract.

Experience counts. The average contractor with at least 10 years’ experience in the federal market enjoyed a success rate of 53% in winning contracts, compared to 20% for contractors with three years’ experience or less.

The report is based on a survey of 740 randomly selected small business owners.