Responsibilities of Contractors
When you are awarded a government contract, it is vitally important that you read it carefully before signing the document. This might be intimidating since many contracts are very long.
However, there are often standard terms that are commonly reused, depending on the complexity of the purchase. Understanding these terms will help you go through the contract more effectively.
Make sure you know what government office or agency is administering the contract. This is usually the same office that awarded the contract to your business. However, there can be exceptions. The Department of Defense has a special office that administers all their contracts. You want to make certain that you direct any questions to the correct department.
The United States Government Want To Encourage the Success of Small Businesses
As we mentioned in the first part of this series, the federal government is required to set aside at least 23 percent of its total spending specifically for small businesses.
This includes contracts specifically for women-owned small businesses, small disadvantaged businesses, companies within historically underutilized business zones (HUBZone), and service-disabled, veteran-owned small organizations. This allows underserved groups to have a real chance to get awarded lucrative government contracts.
It is smart to utilize this group of highly specialized government personnel as they are an invaluable resource for small businesses to succeed in obtaining government contracts.
However, businesses need to understand the various ways that contracts can be terminated. We want to make sure that you protect your business from unneeded risk and liability.
Contract Administration Issues
Federal contracts are different from the average commercial contracts. They have general contract provisions that are unique to the government.
These contract provisions include statutory or regulatory requirements that only apply to the federal government. They include the following:
- Termination for default
- Termination for convenience
- Contract changes
- Payments
- Specifications
- Inspection
- Testing.
These matters are described in the Federal Acquisition Regulations.
Specifications
The invitation for bids or requests for proposals will contain exact specifications for most of the products and services needed by the government. This precise language will also be included in your contract.
After you are awarded the contract, you are contractually obligated to deliver the product or services that are described in the specifications. Basic specifications can refer to federal specifications. You will be bound by all the terms and conditions of the specifications and failure to deliver a product or service meeting these exacting terms can result in the termination of your contract by default.
Make sure that you never bid on a contract unless you have read and understood all the specifications required for performance. Make sure that you understand all that is required before signing the contract.
Inspection And Testing
In federal contracts, the government has the right to inspect and test the items you deliver to determine if they conform to contract requirements and specifications. The government does not have to accept a contractor’s product unless it passes inspection. The type and extent of inspection and testing depend largely on what is being procured.
Disputes
A dispute is when a government contractor has issues or material disagreements that relate to the contract itself and therefore files a claim.
A claim is defined as a demand by one of the contracting parties seeking, as a matter of right, the payment of money; the adjustment or interpretation of contract terms, including the time of performance. This also includes other relief that arises under or relating to the contract.”
Disputes Are Only For The Contractor
Only a contractor is allowed to file a dispute claim. This means that subcontractors can not enter into the federal dispute process. This is because the contractor is an original party to the contract.
Typical Contractor Disputes
Some common contractor disputes are as follows:
- Defective specifications
- Changing delivery dates
- Failure of the government to supply a contractor with what he/she needs to properly fulfill the requirements of the contract
- Any other “event” that would keep a contractor from completing the contract or from being able to perform the contract.
The dispute is triggered when one of these events occurs and all informal attempts to resolve the issue fail.
Procedures for Disputes
For a dispute, a contractor is required to submit the claim in writing to the contracting officer.
The contractor should describe the following in the claim:
- Situation
- State
- What action the claim is asking for
- Request a final decision.
The contracting officer will have 60 days to respond after receiving the written notice. If the contractor has not heard from the contracting officer in this period then the request is considered denied.
Procedures Of Protest
The government wants to ensure that public funds are utilized fairly. This means that protests to solicitations will be handled as quickly and efficiently as possible. So the government encourages all parties to resolve issues with contracting officers of the agency with open discussion. The agency is also encouraged to resolve these matters fairly and efficiently.
Make Sure You Have Your CAGE Code (Commercial and Government Entity)
This code is five characters and unique to your business. It’s 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 unique code, and each location must be registered separately with SAM.
Remember SAM
SAM stands for System Award Management.
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 SAM directory.
Please read one of the helpful blog articles on our site like 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. With our help, you will be able to be on the path to government subcontracting quickly and efficiently.