The federal government is the largest buyer of goods and services in the United States by far.
According to the Government Accountability Office (GAO), the federal government spent more than $665 billion on contracts in the fiscal year 2020.
For perspective, this is almost 10% of the federal government budget and 2.6 times the budget of Texas, the second-largest state in the United States.
Doing business with the government can be profitable and a steady revenue source. However, government contracting can be very complex.
Additionally, it can also pose a wide range of challenges, including;
- Setting up the contract
- Negotiating terms and conditions of the contract
- Government audits
- Compliance with government contracting requirements
- Federal contract laws and processes
- Government investigations, claims, and disputes, among others
While some challenges can be easy to maneuver, others might lead to more complicated situations involving investigations and lawsuits.
However, you can navigate most of these challenges with an experienced business law attorney by your side.
Doing Business with the Federal Government
Who is a Government Contractor?
A government contractor is a private company in a contract with the government to produce goods and services for government agencies.
They can include defending the government in wins or losses, conducting audits, setting up compliance programs, supplying government agencies with specific products, etc.
While some contracts are awarded to big companies, the federal government reserves some for small businesses.
The DOD (Department of Defense) and DOJ (Department of Justice) are committed to assisting and maximizing small businesses, including women-owned, service-disabled veterans, HUBZone certified businesses, and small disadvantaged businesses in the US to seek contracts with the departments.
Getting a Federal Government Contract
If you’re looking to apply for a federal government contract, you need to follow these steps.
- Step-1: Get a D-U-N-S number: DUNS is an acronym for Data Universal Numbering System. The federal government uses this unique 9-digit number to identify the businesses it trades with.
Make sure you’ve got your documentation ready before applying. These should include your EIN (Employer Identification Number), which, if you still don’t have, you can apply for at once. The SS is sometimes accepted as an alternative, that is, if you don’t have an EIN.
- Step-2: Register with SAM. SAM is the federal government’s System for Award Management.
As part of the registration process, you’ll need to fill about four questionnaires, including the Representations and Certifications questionnaire, the Federal Acquisitions Regulations (FAR) responses questionnaire, the Architect and Engineering responses questionnaire, and, if you’re keen on a DOD contract, the Defense FAR Supplement —(DFARS) questionnaire.
If you qualify as a small business, you’ll need to fill the Small Business Administration (SBA) supplemental page.
- Step-3: Assign Yourself a NAICS Code. A NAICS code stands for North American Industry Classification System. Look for the number system that best describes your business and assign it to your business.
- Step-4: Get acquainted with contracting regulations. Your attorney can help you with this. However, depending on the federal agency you want to do business with, you should have a fair grasp of the following laws
|1||Federal Acquisition Regulations-FAR||Primary regulation for government contracts which you can access online.|
|2||Armed Services Procurement Act of 1947 (ASPA)||Stipulates procurement requirements and procedures for DOD agencies.|
|3||The Federal Property and Administrative Services Act of 1949 (FPASA)||Stipulates procurement requirements and procedures for non-DOD agencies.|
|4||Competition in Contracting Act (CICA)||Encourages competition and discourages single-sourcing except in certain limited situations.|
- Step-5: Look for a Government Contract You Can Apply For. As a rule, federal government contracts are listed on the SAM website.
Evaluation of Contracts and Subsequent Awards
After the interested companies submit their offers, the respective federal government agency evaluates them on one, some, or all of the following factors.
- Cost or price solicitation
- Past performance evaluation
- Technical evaluation
- Cost information
- Small business subcontracting evaluation
Key Legal Issues Affecting Government Contractors
Many contractors have been involved in legal battles with the government.
The key issues include:
Government Contracts Requirements
Contractors must comply with specific requirements, failure to which they may lose the contracts or, worse, face a lawsuit.
These range from basic requirements such as size standards and registration to more complex ones like labor standard statutes.
For instance, the DOJ fines contractors who do not comply with cybersecurity standards and fail to report breaches.
While some can be challenging, an experienced attorney can help you navigate federal requirements and ensure you are compliant.
Government Contracts Investigations
Government contractors are increasingly subjected to investigations by government agencies.
Due to scrutiny from the public, public committees, and legislatures, the agencies focus on abuse, wastage, and fraud in government contracting.
You can be subject to highly-sensitive investigation and audits from different agencies like the Defense Contract Audit Agency (DCAA). Contractors are also required to conduct internal investigations and make relevant disclosures if there is any misconduct.
If the investigating agents discover noncompliance or failure to make voluntary or mandatory disclosure, you may be disbarred, suspended, and potentially face criminal and civil lawsuits.
Disputes, Claims, and Litigation
Disputes are common in government contracting.
While some claims are settled outside the court, others can proceed to litigation.
In this case, you’ll require an attorney with experience in litigating government contracting claims and who can protect you before state courts, federal agencies, and appellate courts.
Additionally, they’ll help you navigate the federal laws and litigation processes.
Examples of such claims include:
- Breach-of-contract claims
- False Claims Act lawsuits
- Termination of contract
- Payment and billing disputes, among others
For instance, in a case that Michael B. Schulman & Associates’ is litigating at the United States Court of Federal Claims, one of the plaintiff’s grievances, the American Vet Works, is that the Department of Veteran Affairs left all communications with the plaintiff to Contract Specialists—instead of a Contract Officer—who do not have the authority to bind the government into contracts.
Only an attorney specializing in government contracts can help you with the litigation process in such a scenario.
Let Us Help You with Your Government Contract Legal Issues
Winning a federal government contract can be a financial game-changer for your business.
But, at the same time, government contracting is complex and full of risks. From the federal contracting laws and regulations to compliance requirements, investigations, disputes, and claims, it’s nearly impossible to do without help.
You might also suffer many subtle forms of contractual violations, which may frustrate your performance of the contract, leave you with a huge financial hole, suffer fines, or worse, face civil or criminal liability.
But you don’t have to do this alone.
At Michael B. Schulman & Associates, we can help you bear the burden of having the government as your customer.
Whether you need advice on disclosure, resolving a dispute, or representation in a claim or lawsuit, we’ll do everything in our power to protect what you’ve built.
With 40+ years of dedication to providing our clients with the best services, we represent interests in many legal issues in business law, foreclosure defense, trademark law, family law, and government contracting.
The following is what our client for 16 solid years says concerning us:
Have an issue with your contract?
Contact us today. Let us shoulder your burden and find a solution for you.