Navigating the maze in government contracting

In fiscal 2013, the U.S. government entered into contracts to be performed in Rhode Island with a value of more than $766 million. These contracts were for goods and services as diverse as construction services, underwater sound equipment and clambakes.
Because federal law requires that a “fair proportion” of these contracts be issued to small-business enterprises, the federal government steers business to small businesses. This is especially true if the small business qualifies for specific set-aside programs intended to benefit disadvantaged businesses, women-owned small-business concerns, service-disabled, veteran-owned small-business concerns and businesses located in historically underutilized business zones.
These government efforts can give qualified companies valuable access to a profitable source of business. The government is a highly regulated customer, however, so it is critical that small businesses become fully versed in the regulations governing the process.
• The first question to address is whether the business qualifies as a small-business concern. A business seeking to qualify for a contract reserved for small business, known as a “small-business set-aside,” must meet the small-business size standard for the NAICS code that the contracting officer assigns to the procurement.
• The next step is to register a business profile with the System for Award Management, the primary database used by federal agencies to locate contractors, which is required prior to the award of any contract or agreement. This process is sometimes referred to as “self-certifying.”
• If the small business qualifies for specific set-aside programs intended to benefit disadvantaged small-business owners, additional certification and registration before the business is required, which are fairly specific and straightforward. Because the federal government is required to steer a fair proportion of its contracts to small business, it has tried to make it easy to match the government’s needs with the specific potential contractors.
The first opportunity for small businesses to make government agencies aware of their capabilities arises when the business registers with SAM. The information in the small-business profile provided to SAM allows agencies to search for businesses based on various criteria.
Information provided in the profile also populates the Dynamic Small Business Search, which is maintained by the SBA and used by contracting officers to identify potential small-business contractors.
The Federal Business Opportunities site (www.fedbizopps.gov) is the primary publication vehicle. It is used to list procurement opportunities, corresponding vendor requirements and synopses of contract awards for all federal government contracts with a value greater than $25,000. Another significant resource for identifying federal government contracts, the General Services Administration has established the GSA Multiple Award Schedules program.
Once a small business has determined that specific federal agencies may be targets for its products or services, it may be helpful to contact those agencies directly. Many agencies maintain an Office of Small and Disadvantaged Business Utilization or an Office of Small Business Programs in order to identify opportunities for small businesses within their agencies.
Once a small business identifies opportunities upon which it wishes to bid, it should carefully review the specifications contained in the invitation for bids or request for proposals. Those specifications often incorporate by reference other federal specifications and form the basis of the contractor’s contract. Upon receipt of a proposed contract, the contractor should, of course, thoroughly review its terms and specifications.
Once the performance phase begins, the contractor must strictly adhere not only to the contract specifications but also to contract provisions requiring compliance with labor-standards statutes, and contract provisions intended to protect the integrity of the government-procurement process, such as the “officials not to benefit” and “gratuities” clauses and “anti-kickback” provisions.
Government contracts also contain provisions authorizing the contracting officer to order changes in the specifications and other contract terms.
The government also may terminate the contract, either as a result of the contractor’s default or if the subject of the contract becomes unneeded or obsolete. A termination for default may occur if the contractor fails to properly perform the contract, including a failure to make progress so as to endanger performance of the contract. The contracting officer must provide the contractor with written notice requesting the contractor to either cure the default or show cause why the contract should not be terminated. If the contract is terminated for default, the contractor is entitled to payment only for the portion of the contract accepted by the government.
Finally, and most importantly, the contractor should follow the invoicing instructions contained in the contract. Under fixed-price contracts, payment is made after the government accepts delivery. Other contracts may provide for progress payments based upon costs incurred as the work progresses. •


Melissa M. Horne is of counsel with Higgins, Cavanagh & Cooney LLP.

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