The following blog is the first in a series of special guest and ReliAscent partner blogs, contributed by Richard Busch of the Busch Law Firm, and Mike Anderson, of ReliAscent. This series will cover important topics ranging from an introduction to government contracting, to requests for equitable adjustments, risk management, contract change orders, and scope creep. It will also cover government financial assistance efforts, and how defense contractors--both small and large business (along with subcontractors)--can increase profits, improve their ability to strategically plan for the future and remain profitable.
ReliAscent and the Busch Law Firm are proud to announce this synergistic relationship. We think this team will bring value to our clients and defense contractors across the country through the combination of our individual expertise and a blend of the administration and legal guidance to all phases of dealing in the government marketplace. By combining DCAA compliance and accounting expertise with defense contracting and FAR compliance legal representation and consultation, ReliAscent and Busch Law can help position contractors for financial success…
Part I - "If You Are a Commercial Contractor, Please Consider This!”
Why should an otherwise commercial company consider entering the Federal Government market place as a prime contractor, vendor, or subcontractor at any level?
Over the last five years, the government has recognized a shift in the direction to advance business solutions. Due to the growth in technology, the government has determined that the commercial business sector must be the primary force to develop and provide the products and services they need to achieve society’s goals. Consequently, the Federal Acquisition Regulation (“FAR”) and the individual agency supplements have been revised to become much more “commercial” friendly in most situations. If the potential contractor is a “commercial” business engaged in supplying commercial products or services, many of the complex requirements simply do not apply. Except for a very limited number of government unique provisions, most clauses are negotiable. The following are some general points a commercial business should consider:
- Just over $640B DoD 2018 proposed spending plan (total government budgets much bigger)
- Limited government audit rights for commercial companies with commercial products
- Terms and conditions more conducive to commercial application (subject to the unique mission of the government)
- Over $41 Billion on the GSA Schedules for commercial products
- Favorable research and development terms if negotiated correctly
- Commercial pricing based on the market----- (Government does request the best commercial prices under like terms and conditions)
- “Other Transaction” commercial type contracts may be available
- Electronic Payment with automatic interest on due and payable amounts for late payments
- Commercial markets highlight products purchased by the government due to quality verifications
- Joint venture, teaming arrangements, and subcontract opportunities in addition to prime status purchases
- Retention of license rights or patents if negotiated correctly on new products or modified products using government money
The government market sector has vast potential for a company that has the resources and products/services to benefit the goals of the government. If a company is considering doing business with the government, the effort must be based on one simple principle---DO IT RIGHT!
Bottom Line: There is a great market potential for a “responsible” company that focuses on performing in the “right” way.
Coming Up: in part II, “Should We Do It?,” Rich introduces a series of important Q&A’s for government contractors to consider. From contract reviews, to establishing subcontracts, and how to handle disputes with the Federal Government, this piece is a must-read for small and large businesses alike.