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.
DCAA Approval
The Defense Contract Management Agency (DCMA) helps define business systems requirements and provides direction on audits and approval criteria. Potential government contractors need to understand this agency as they define the approval criteria for awarding contracts. They also have a strong hand in guiding government audits. Speaking with them will help you with the following:
- direct and indirect cost segregation
- cost pools and allocation bases
- timekeeping
- labor distribution systems
- maintaining compliance with invoicing clauses
- avast and ever-changing complex of other issues
How Do You Get Started Working With The Government?
For example, the following are the steps to apply for a federal grant:
- Step 1: Obtain a DUNS Number
- Step 2: Register with SAM
- Step 3: Register with Grants.gov
You might be wondering what SAM means and how do you register with the site. Go to sam. directory to find people who are willing to make this as easy as possible. Be sure to also check out our informative article Everything A Small Business Needs to Know About the SAM Directory, which should easily answer most of your questions.
The Federal Government Offers Great Opportunities For Many Types Of Businesses
Small businesses are the lifeblood of the economy. They are often key sources of innovation and research. The mom-and-pop shop has been part of the landscape and American dream since the beginning of this great nation. The federal government can help you achieve your business dreams. Let us help you take this vital first step on the pathway to success.
Cost Contracts
This contract pays only for expenses and there is no profit for the small business provider. Cost contracts are often used for research projects provided by non-profit organizations.
Cost-Plus-Fixed-Fee
This contract includes a limit for expenses that will be reimbursed along with a fixed payment for the service provider.
Cost-Plus-Incentive
Like Fixed-Price-Incentive contracts, this provides a financial incentive for the service provider to come in under budget, while also covering project expenses.
The Bid
The Federal government has the following type of solicitations for bidding:
- Request for Quotation (RFQ). This type is for contracts below $150,000 with a simplified acquisition procedure.
- Request for Proposal (RFP). This type of solicitation asks vendors to propose in response to the government’s request. You can (and often will) discuss delivery details, technical requirements, and specifications with the contracting officer when you bid on that type of solicitation.
- Invitation for Bid (IFB). The “lowest bid wins” or “sealed bid” type of solicitation. No discussion or price negotiation is implied here.
- Request for Information (RFI). This is mostly to research the market and evaluate the interest and capabilities of contractors in a specific niche.
Make sure you read the solicitation requirements carefully. A solicitation package will include documents, technical conditions, attachments, and various other things required for the submission. For most federal government contracts under RFP and IFB solicitations, there are standard contracting forms you should fill out. As for the required documents, they are listed in the solicitation
Contact your contracting officer if you have questions. You must understand a single thing about the solicitation that you are bidding on. Also, look to FARs (Federal Acquisitions Regulations) that govern the solicitation you are to respond to make sure you know the regulations and requirements.
The First Step Is Registering With SAM
To do any business with the federal government, you must register your business in the System for Award Management directory. The government will not hire any type of business (large or small) that has not registered in the typesSAM directory.
Please read one of the helpful blog articles on our site Everything You Need to Know About SAM for Small Businesses. These blogs will help give you all the information you need to understand how we can help make the process very easy for you. Sam Directory will happily guide you through this often confusing process.
SAM stands for System Award Management.
In order to do any business with the federal government, you must register your business in the System for Award Management. The government will not hire any type of business that has not registered in the SAM directory.
FFP Level-of-Effort
This government contract is defined by the level of effort the service provider will commit to the project, rather than results. It is a common contract used for things like research, which is often hard to define in advance.
FFP Materials Reimbursement
The small business provider will have a predetermined price for service and labor but is reimbursed for the cost of the materials at the end of the project. This contract is often used for repair services where at the beginning, the cost of materials may be unclear.
Fixed-Price with Award Fees
A fixed price with award fees contract offers a hard and fast price for objective performance success. This contract will also have additional awards to incentivize more subjective qualities like aesthetic appearance and technical knowledge
Fixed-Price with Economic Price Adjustment
The prices are often adjusted at the top of the project to account for changes within the cost of labor, materials, or market prices of specific items within the contract. The criteria for these sorts of price changes must be defined within the original contract.
Fixed Price Incentive (FPI)
This contract states a maximum price but it also awards the service provider for coming in under budget. So coming under budget in this type of contract allows for a larger profit for the small business provider.
Again, registering with SAM is the first crucial step to entering this lucrative world.