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How To Sell To The Feds
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Article 4: What Contractors Can Expect
Doing business with the federal government may challenge your customary business practices.
First, knowledge of e-commerce is important. Many departments require invoices and payments be transferred electronically.
It’s also important to conform to the contract terms. Federal contracts include unique statutory and regulatory requirements providing for termination when terms go unmet, or simply for the government’s convenience. Contract changes, payments, specifications, inspection and testing are described in the Federal Acquisition Regulations (FAR).
TIP:
To understand FAR regulations, use the SBA’s Office of Government Contracting at www.sba.gov/GC/.
The government can’t change a contract’s general nature, but retains the right to unilaterally order changes in specifications and terms. Changes must be “within the general scope of the contract.” Contractors are entitled to equitable adjustment in price and delivery.
Contracts specify the government office responsible for payment and invoicing instructions. Learn the process unique to your agency. You can bill the government for interest if payments are late, but only if you know whom to bill.
TIP:
The more accurate your invoices, the more quickly you’ll be paid.
Small fixed-price contracts, such as for a single piece of work, generally pay lump sums after delivery is accepted. Larger contracts of many items can be billed incrementally.
Large fixed-price contracts and subcontracts in which delivery is months after the award may contain clauses permitting progress payments. When progress payments are authorized, you’re liable for repayment if you don’t complete the work, and the government can take title to your work-in-process. If considering progress payments, be sure your accounting system can segregate contract costs.
Exact specifications are contained in invitation for bids or requests for proposal. Make sure you can meet these precisely. Failure can result in contract termination.
Contracts also provide for inspections and testing to determine compliance. If your product doesn’t pass inspection, it will be rejected and payment withheld.
Important contracting procedures:
Only contracting officers have contract authority. It’s prudent to know the limits of their authority. National, social and economic objectives are incorporated into government contracts, so you’ll be required to comply with labor standards and other statutes. An exception is contracts exempted by law. Become familiar with contract provisions protecting the integrity of the government procurement process. These include the “officials not to benefit” and “gratuity” clauses and “anti-kickback” provisions. If you disagree with a contracting officer’s decision, a timely appeal is required to avoid the decision becoming final.
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