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How To Sell To The Feds
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Article 6: Cautions For Contractors
Federal contracts exist in a highly regulated environment. They create obligations and liabilities unmatched in the private sector.
For instance, there can be limits on communications and interaction with an agency. Price justifications and audits are often required. Frequently, you must conform to socioeconomic requirements. And there can even be criminal penalties resulting from business disputes.
These risks may require your company to establish compliance mechanisms entirely new to you. There is a movement within the government to ease some of these red tape requirements, particularly for vendors that provide commercial items like products and services customarily available in the marketplace.
Procedures strictly adhered to include equal access to information and publicly announced contract offers to ensure competitive conditions among companies seeking contracts.
All of this may mean many marketing or sales habits you have developed, such as particularly chummy relationships with customers, can pose problems if you engage in them when doing government business. Be prepared to learn the fine points regarding gratuities and “Procurement Integrity.”
Preferences and requirements in contracts also come with socioeconomic considerations. Federal contractors and sometimes subcontractors are required to adhere to strict federal standards, such as equal opportunity and affirmative action, the “Buy American Act,” environmental protection and drug-free workplace requirements. Some agencies require certification to demonstrate compliance.
If your company holds intellectual property rights, protect yourself. Consult knowledgeable legal counsel to avoid losing those rights to the government, which can occur because of the nature of some federal contracts.
Also, clauses contained in federal contracts give the government the unilateral right to make changes in the scope of your agreement, increasing or decreasing cost or time. The government can terminate your contract unilaterally for nearly any reason.
Federal laws against false claims pose a risk too. Business disputes with a government agency over different interpretations of a contract or a negotiation tactic may result in a criminal investigation. Even when you’re in the right, investigations are costly to defend.
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