By Theodore P. Watson, Esq.

It is no secret that government contracting is a lucrative business venture. Many small and medium sized businesses are now moving to federal contracts to get increased revenues. The commercial economy is definitely a tough market and competition and survival is tough. When bidding on government contract RFPs and solicitations, you must also know the ground rules to play the game. Alike the commercial sector, the government procurement process creates virtually the same challenges. So what really is different? Why are businesses moving to the government market place if bidding is just as difficult?

The following points are undisputable:

·         The federal government (DOD) is the largest customer of commercial supplies and services.

·         Government contracts can potential guaranty you income for at least one year ( many bid awards are generally for I base year and 3 option years).

·         Registration and qualification standards to do business with the government are very easy

·         State contract awards oftentimes lower in amounts that federal contracts

·         Small business programs in the federal market are taken more seriously that state contracting

The difference between government and commercial contracts is substantial

For example:

·         Federal procurement is governed and regulated by the regulations and statutes

·         A contractor does have some legal recourse in federal contracting as compared to the commercial sector

·         Subcontractors to large contractors in government contracting have more of a right to subcontracts than in the commercial and state sectors

Are attorneys necessary in federal contracting?

This depends on your idea of smart business. As mentioned before, federal contracting, although very lucrative, is regulated by a myriad of regulations.

When bids are award, the contract also contains numerous clauses for which you have the obligation to know and comply. Most successful federal contractors have government contract attorneys either on staff or on retainer. This can be a wise decision when certain issues arise.

For example:

·         Bid protests

·         Allegations of fraud

·         Ethical matters

·         Contract termination

·         8a or HUBZone matters

·         Teaming agreements or Joint venture matters

The penalty for failure on a government project can immensely cripple your business. The decision whether or not to retain outside attorneys or not is simply a decision that you must make.

How to Position Yourself to Take on Larger Government Contracts

Many contractors across the country grapple with the question. There are concerns about bundling which the SBA is supposed to be monitoring. When contracts are too large for one business to handle the best approaches include to bidding on solicitations include:

·         Consider entering into a teaming agreement with a reputable firm

·         Joint Ventures

·         Subcontracting to a larger firm that has the requisite past performance

·         At last resort, seek the larger contract awards and pursue subcontracting opportunities

Our staff of government contract lawyers is frequently called upon to draft teaming agreements for business that are looking to join forces for the larger projects. There are some very important rules that will apply to such teaming arrangements and joint ventures.

These include:

·         If you are a small business, ensure that you are performing at least 51% of labor costs (there some exceptions to this rule depending upon you NAICs code)

·         Ensure that the awardee (8a, HUBZone or Service Disabled Veteran Owned Business) does the critical parts of the project

·         Do not rely on a large subcontractor's employees

·         The smaller prime must have overall responsibility for the project

·         The small business (prime) must demonstrate that it has marketed and pursued the contract

Failure to abide by these basic regulations can cost you the bid award in a protest to the SBA.

Mistakes in the bidding process

When contractors bid on government RFPs and solicitations, they often scan the RFP and statement of work to quickly decide that “we can do this work.”

When the RFP is announced on FBO you must read entire solicitation. The agencies are generally very specific about that they want to see in your bid. Many federal contractors also know that you must provide exactly what the government wants in the solicitation.

This is true. However, successful competitors know that must just do more than the minimum to prevail. Bidding with the bare bones of the solicitation may get you into the competitive range (final pick for consideration).

Notice that the competitive range has the keyword “competitive” in the phrase. This is a mistake that flies over most bidders for a government contract.

·         You must add competition and value into your response to the RFP

·         Do not be afraid to use commercial past performance in your response

·         Don’t forget to also add the past performance of you subcontractors

·         Focus on beating your competitor by adding value to the solicitation requirements

As government contract consultants, we rarely just write an RFP that merely includes the bare bones requirements. The probability of you winning the contract is greatly minimized.

The bottom line is that you must faithfully read the RFP, think about how you can compete against your competitor and add value for the government. For additional help, contact our office at 720.941.7200