Government Contracts Can Be Very Lucrative For Small Businesses
The United States government issues 500 billion dollars in federal contracts on a yearly basis. They also set aside 23 billion dollars specifically for small businesses. However, many small businesses find the process of winning government contracts daunting and give up before even really trying.
Sam Directory will guide you through the process of writing a successful government contract proposal. We are invested in your success and want to help you succeed in winning a lucrative federal contract.
Understanding The Regulations
There are many advantages to being a successful government contractor. However, the government has stricter rules and regulations regarding accounting when compared to private sector clients. It is important to keep up with federal regulatory requirements.
Federal government agencies receive their funding from taxpayer dollars and they need to justify their spending in order to prevent waste. We will help you make sense of government accounting so you can develop a methodology that works for you and your business.
The Integrity Of The Procurement Process
It is essential that all bidders on government contracts have equal access to any information needed to put together a comprehensive bidding package. A company that is bidding on a federal contract may not receive information that is not public in order to provide an unfair competitive advantage in the field. This includes things like an innocent email accidentally going to the wrong person.
Contingent Fees
A government contractor is not allowed to enter into an agreement with a third party where the third party will pay a fee contingent on the successful winning of a federal contract. This is to make sure that contractors are not tempted to cut corners in order to be paid.
Bribes
The Federal Anti-Bribery Statute, 18 U.S.C. §201 states that a potential federal contractor is not allowed to directly or indirectly offer something of value to a public official in exchange for influence on a public act. Small businesses must be aware to not do anything that seems to be in violation of this statute as they can be in danger of facing criminal charges. Gifts that can be considered a bribe include entertainment, travel, meals, and invitations to certain types of conferences. Generally, gifts that are under $20 are okay but be careful of the implications that being too generous can cause.
Have A Clear Understanding Of The Government’s Accounting Requirements
The Financial Accounting Standards Board (FASB) states that contractors must comply with the following in order to work with the government:
- Federal Acquisition Regulations (FAR)
- Cost Accounting Standards
- FAR agency supplements
Understanding Audits
Your company should be clear on what the DCAA considers the responsibilities of federal contract actors. They include the following:
- timeliness of payments to subcontractors
- documentation of contractor oversight of subcontractors
- documentation of enforcement of flow downs
- documentation of support for subcontractor billings
- documentation of subcontractor reviews
Surprise Audits
Government audits can occur without any type of advance notices. Contractors must always be prepared in order to receive a solid evaluation.
A surprise audit that reports non-compliance with federal accounting regulations can have a lot of negative consequences. This could include termination of the contract and payments can be withheld unless improvements are in place. This can be very time consuming and stressful. This can also severely affect opportunities for future business with the government.
Conflicts Of Interest
Subpart 9.5, organizational conflicts of interests (OCI) says the following:
The general rules in 9.505-1 through 9.505-4 prescribe limitations on contracting as the means of avoiding, neutralizing, or mitigating organizational conflicts of interest that might otherwise exist in the stated situations. Some illustrative examples are provided in 9.508. Conflicts may arise in situations not expressly covered in this section 9.505 or in the examples in 9.508. Each individual contracting situation should be examined on the basis of its particular facts and the nature of the proposed contract. The exercise of common sense, good judgment, and sound discretion is required in both the decision on whether a significant potential conflict exists and, if it does, the development of an appropriate means for resolving it. The two underlying principles are-
(a) Preventing the existence of conflicting roles that might bias a contractor’s judgment; and
(b) Preventing unfair competitive advantage. In addition to the other situations described in this subpart, an unfair competitive advantage exists where a contractor competing for the award of any Federal contract possesses-
(1) Proprietary information that was obtained from a Government official without proper authorization; or
(2) Source selection information (as defined in 2.101) that is relevant to the contract but is not available to all competitors and such information would assist that contractor in obtaining the contract.
A small business should be upfront about any situation that can cause a potential conflict of interests such as receiving sensitive information about the procurement in maybe an unrelated interview process.
Make Sure You Have Your CAGE Code (Commercial and Government Entity)
This code is five characters and unique to your business. It’s basically your ID code, and government agencies will identify your business using this code. It is a bit like a social security number for your business. If your business includes more than one facility, then you will need multiple CAGE codes. Each location must have its own unique code, and each location must be registered separately with SAM.
SAM Directory Can Help
Remember, registering for the SAM directory gives a business automatic entry into the extremely lucrative marketplace of the federal government. It is also a crucial step for applying for rewarding government grants that can help your business reach its full potential. Let us, the professionals at SAM Directory, make sure that you do all that is needed to not miss out on this important opportunity. We will make certain that your application is processed quickly and efficiently so you can start being a federal contractor as soon as possible. We remove this hassle so you can go about the important mission of running your company. Stay tuned for the next article in this series.