The first thing to say is: congratulations! Winning a government contract is a major achievement and a major opportunity. In fiscal year 2016, the federal government awarded 24 percent of its contracting dollars to small businesses, slightly above its annual target of 23 percent.
Of course, being awarded the contract is only the first step--now you have to deliver on your promises. The guidelines and best practices below will help you follow through and do a good job so that you can continue to win federal contracts in the future.
Read the Contract (and Read It Again)
Although a government contract is an exciting accomplishment, you would be foolish to sign any document without carefully reading and understanding all of the terms and conditions. Some of the important factors to be aware of include:
- The exact identity of the office that will administer the contract.
- The conditions for terminating the contract, and what payment you will receive if this occurs. For example, if you fail to make adequate progress or fail to deliver the required items according to the agreed schedule, the government retains the right to end the contract and pay only for those items that it has already accepted. The government can also terminate the contract "for convenience" in the event that it no longer needs or wants your services, in which case it will reach a fair settlement to compensate you.
- The provisions for making changes to the contract.
- The method of payment, the payment schedule, and the office responsible for paying you.
Now that you're a government contractor, you need to ensure that you're in compliance with all relevant labor statutes, such as the McNamara-O'Hara Service Contract Act (SCA) and the Contract Work Hours and Safety Standards Act (CWHSSA). These laws require contractors to provide safe working conditions for their employees and to pay their employees overtime for working more than 40 hours a week.
In addition to these labor laws, you also need to remain in compliance with other statutes preventing fraud and corruption in the government contract process. These include the "officials not to benefit" clause and the Anti-Kickback Statute for health care contractors.
Before starting work, you should make sure that you have enough cash flow to pay for a number of upfront expenses, such as production, services, and fulfillment. Although some contracts provide for some percentage of the payment before you begin work, this might not be enough to cover these initial costs.
If you're responsible for production under the contract, you should also work out a detailed production schedule before starting. This will allow you to plan ahead to have the materials you need at the right times so that you don't fall behind schedule.
When you read the contract, pay special attention to the exact specifications for the deliverable products and services that you will provide, so that you can avoid scope creep during the project. If you agree to alter the form or timeline of the deliverables, make sure that you document any changes in writing. Don't diverge from these requirements, even if you plan to go above and beyond them, without prior discussion.
The contract that you receive should contain explicit provisions for how to resolve any disputes. If the resolution isn't satisfactory, you can make an appeal to the Civilian Board of Contract Appeals.