By SBS Group, PVBS Partner
This guest blog entry is from PVBS industry technology partner SBS Group.
Opportunities abound in the government sector and with the potential volume of business available, companies that have had success in commercial markets have made the leap into the world of government contracting. If you are considering doing business with the Federal government don’t fool yourself that it’s just some extra paperwork.
While the upside can be significant, failure to understand the importance of the rules and regulations can lead to real trouble. In recent years, there has been much scrutiny and increased oversight of government contracting practices by all levels of government.
Regulations You Need to Know
The federal procurement process is governed by four main laws meant to level the playing field – including The Anti-Kickback Act, The False Statements Act, The False Claims Act, and The Sherman Antitrust Act. All of these laws outline criminal penalties for companies that fail to follow the unique marketing rules and regulations found in government contracting.
You must also be prepared to deal with a host of additional compliance regulations which are located in the Federal Acquisition Regulation, more commonly known as the FAR. This is the principal set of rules, the “code” of federal procurement. The main principles of FAR include meeting the buyer’s needs in terms of cost, quality, and timeliness; minimizing administrative operating costs; ensuring integrity, fairness, and openness; and fulfilling other public policy objectives. It is important to understand FAR. There are many costly pitfalls if you don’t take the time to understand the provisions in your contract, which often reference areas of the FAR.
For many companies, one of the biggest differences between commercial contracts and government contracts is the elevated level of transparency required. There are strict do’s and don’ts in the bidding process, including affirming your willingness to conduct business with a large degree of openness and transparency. You will be required to provide detailed information on your accounting systems, policies and practices, as well as cost structures, compensation of your employees and how they spend their time in the execution of a contract.
Understanding and dealing with the unique nature of these requirements can go far beyond reading up on the rules and regulations. Often, it requires adjusting your standard operating processes, procedures and corporate business practices to specifically comply with FAR, numerous agency guidelines, and increasing government oversight.
The compliance requirements can seem daunting, but SBS Group is here to help with our ongoing blog series on achieving success in the Government Contracting Market. We will cover topics including:
- Understanding the Basics of Government Cost Accounting Requirements
- Making Sure you have a Compliant Accounting System
- Staying on Track with Billings and Reporting