What Are Government Contractor Do's and Don'ts?
Government contractor do's and don'ts tell you how to do business with the government.3 min read
Government contractor do's and don'ts tell you how to do business with the government.
There are two important laws you need to know, the FAR (Federal Acquisition Regulation) and FASA (Federal Acquisition Streamlining Act).
Government Contracting Introduction
The government actively seeks small business participation when it does business, and it spends money to find qualified small businesses to be the suppliers. There are similarities between doing business with the government and commercial customers. Both want a quality product or service at a good price and done in time while understanding their buying habits.
Although the approach is similar, there are differences between the government and commercial customers, and it's important to understand this to minimize problems.
The government does business through authorized agents:
- Procurement Contracting Officer creates contracts and handles its end when contractor defaults.
- Administrative Contracting Officer manages the contracts.
- Termination Contracting Officer is responsible for contract terminations when the government decides to end a contract.
The same person can do all three jobs, depending on the particular situation. The government has rights that commercial businesses don't because it's a ruling power.
The government has the right to change the contract if parameters allow this, such as the quantity it's contracting for. The contractor will receive an equitable cost adjustment but has to follow the changes.
The government can also cancel the contract if it doesn't need the product or service anymore, and the contractor will be reimbursed for costs incurred.
A government can impose an audit, but it's usually for big contracts of $100,000 or more and not for contracts with small businesses. The fear of audits is usually unfounded as this is rare.
Introduction to Federal Government Contractor Do's and Don'ts
Working as a government contractor can be lucrative, but it requires going through a lot of bureaucratic red tape. You have to maintain compliance, as not doing so can be more costly. Contractors who want to work with the government have to spend more money and time to win the bids. There are things small business owners can do to reduce costs.
- NAICS Code for your service or product
- Federal Supply Code to classify the service or product
- DUNS Number
- Commercial and Government Entity Code
- Get categorized as a small business and obtain certifications that qualify under the U.S. Small Business Administration.
- Register with the Central Contractor Registry where federal agencies can find vendors.
- Make sure your accounting meets federal requirements, and work with your lender to receive advance payments and receivables.
- Make sure you can receive credit card and electronic funds payments.
- Prepare a statement or website which describes your business's certifications, qualifications, and other information.
- Make sure you highlight your firm's unique products or services.
- Become familiar with the Federal Acquisition Regulation (FAR) with courses.
- Know your customer by understanding how and what they buy, the process of each agency, and their contracting past.
- Often review the FedBizOpps for business opportunities over $25,000 and understand how agencies buy goods and services under $25,000.
- Get training and mentorship in the Procurement Technical Assistance Center, and meet with the federal agency's small business office to learn more about their opportunities.
- Assure the government person you are dealing with has an actual binding relationship with the government, and describe how you can solve their problem.
- Get everything in writing, make regular contact, and make it about them all the time.
- Seek commercial item status as it reduces cost, IP risks, and accounting, and treat information collecting and client relationship like a normal client job.
- Figure out how you can prove your dependability and reliability to clients as it builds more trust.
- Don't have a broad range of products and services, and narrow it down.
- Don't do a meeting until you have done the steps beforehand, finished homework, defined a niche for your product or service, and prepared a capabilities statement.
- Don't take the client out for lunch.
- Don't give up trying to meet with the client, talk about your business too much, and assume a problem is an automatic money or work.
- Don't talk more than the government client, send long emails to clients, expect too much from clients, and fail to record information from a client.
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