Lots and lots of businesses survive without government contracts. Most businesses survive without Uncle Sugar as a customer. My employer sells nothing at all to the government and Apple computer is another to name one who also happens to be making record profits.
As far as government favoritism goes, I'm against it but I suspect you're only against it in certain circumstances. I'm against subsidies for all businesses and industries, you probably favor it for heart-warming industries like the green industry.
Another difference, as I've noted before, is that you want to control the vast numbers of private businesses and individuals that seek favors and I want to control the 536 politicians (public employees) who grant the favors. Controlling the behavior of the few is always easier than controlling the behavior of the many; especially when the few are your employees and freedom of the many is protected by the constitution.