Complying With Federal Acquisition Regulation RulesAssociation of Construction and Development
May 17, 2013 — 1,877 views
It can be quite a lucrative option to expand your business to the federal market. When you do so, you will have numerous opportunities for growth and networking. But it is important to be aware of the legal issues with a federal contract. Taking up a federal contract involves complying with all the legal regulations that are unique for those involved in business deals with the federal government.
Many times, contractors who take up federal contracts for the first time, especially those that are small businesses, fail to be prepared for the new regulations and rules they have to follow. This often leads to some costly errors and also could create some legal problems. So, it is important to be familiar with all the regulations, which apply to a majority of the federal contractors and subcontractors.
Regulations involved in procurement
The FAR (Federal Acquisition Regulation) is a complex and substantial collection of rules that govern the purchasing process of the federal government. The purpose of this regulation is to make sure that the standard and consistency of the purchasing procedures is maintained, and that they are conducted in an unbiased and fair way. So, if you are a contracting official or the owner of a small business, it is vital that you understand the regulations before you proceed with a contract. If you don't make yourself aware of the areas that reference FAR in your contract's provisions, it could lead to a number of costly mistakes that could lead to a downfall.
The Federal Acquisition Rules are issued as well as maintained jointly by the Secretary of Defense, the Administrator of NASA (National Aeronautics and Space Administration), and the General Services Administrator under the granted statutory authorities. These statutory authorities, for revising and issuing the regulation, have been given to the DOD, NASA, and GSA Procurement Executives.
A government contract is different from a commercial contract in many ways. Federal contracts reference or contain a number of provisions that are unique to the federal government. They include requirements for contract termination, payment processes, changing the work's scope, as well as conducting the testing, inspection, and acceptance of services and goods that are delivered.
If it is the first time you are involved in a federal contract, you need to familiarize yourself with the provisions of FAR in a regular contract. It is important to perform as specified in the contract in order to avoid financial loss and to be able to deliver the service or product on time. One of the important things to do is to read the contract carefully before you sign it. This may be quite difficult because a contract may contain many pages. But many pages will be standard for every contract and once you've read and understood its terms you will be familiar with it.
Another thing to remember is that unlike other contracts, the office that awards the contract and the office that administers the contract may be different. In the DOD, the contract is given to a special office for administering, and you have to contact that office to clear any doubts or to learn about compliance. If you do not do so and get to know much later that you are not in compliance, it can lead to many financial and contractual issues.
The regulation applies to every agency inside the Executive Branch. The Judicial and Legislative branches follow the regulations completely, though they aren't required to. Agencies in Executive Branch issue the supplemental regulations, including the unique purchasing rules for these agencies.