Friday, January 6, 2023

How Do Government Contracts Work

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Compliance For Government Contracts

How to Search Contract Opportunities by NAICS and PSC

Government contract management can also assist with ensuring compliance. There are many governmental agencies that have various accounting requirements and contract administration needs, including:

  • Department of Defense
  • National Aeronautics and Space Administration

Some of the areas in which contractors must be compliant include:

  • Federal Acquisition Regulations
  • Generally Accepted Accounting Principles
  • NASA Far Supplement
  • Contractor Audit Manual

Goods And Services Related Contracts

The Division of Purchase and Property , within the Department of the Treasury, serves as the State’s central procurement agency for goods and services contracts. To find and be notified of goods and services bidding opportunities administered through DPP, we suggest registering at NJSTART . NJSTART provides:

  • Direct notifications about new bidding opportunities emailed to vendors, based on the commodity codes they select during registration
  • An online repository for vendor forms, eliminating the need to prepare forms repeatedly
  • On NJSTART, vendors can:

    • View their remittance and email addresses to ensure their accuracy and select their preferred form of payment
    • See which certifications they need to do business with the State, which certifications they have, and which are missing or expired.

    DPPâs goods and services procurement brochure provides guidance on the procurement process and may also offer information that is common to other State entities that issue contracting opportunities. New Jerseyâs Division of Enterprise and Revenue Services provides specific business registration information according to your legal structure.

    Register with NJStart

    Help Attain General Services Administration Contracts

    The GSA Schedule covers about $45 billion in government contracts. Businesses, non-profit organizations, and educational institutions can acquire a GSA Schedule Contract to sell products and services to government customers.

    Government contracting consultants can help clients and companies obtain these long-term contracts. They simplify the government sales process. However, it can take a couple of months or a couple of years to lock in one. They have pre-determined pricing, terms, and conditions that government buyers can use to purchase directly from a company.

    GSA Advantage is an online government shopping and ordering service run by the General Services Administration for use by government agencies to buy commercial products and services from private vendors. A government contract consultant can help navigate this tool.

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    Search And Analyze Rfps And Rfqs

    An RFP is a business document from an organization that announces a project, describes it, and asks for bids from qualified contractors to complete it. The RFP details what the customer is looking for and exactly describes how a vendor’s proposal will be assessed.

    This is helpful for government agencies or organizations who are looking for the best possible candidates to provide them with a service or product at the best price.

    A request for quote begins a process in which a company invites select suppliers and contractors to submit price quotes and bids for the chance to fulfill certain tasks or projects. Government contracting consultants can help develop RFPs, RFQs and similar solicitations.

    Historically Underutilized Business Zones

    15+ Contarct Templates

    The Historically Underutilized Business Zones program helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities. These preferences go to small businesses that obtain HUBZone certification in part by employing staff who live in a HUBZone. The company business must also maintain a âprincipal officeâ in one of these specially designated areas. Here is a map of HUBZones in New Jersey.

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    Government Contractors Paid Via Eft

    It is now government policy to pay all contractors by EFT, electronicfunds transfer, whenever feasible. In making EFT payments, thegovernment uses the information contained in the Central ContractorRegistration database. To be paid, you must be in CCR.

    This policy underscores the need to get your company registered in the CCR database,and to make sure that the information that you have entered is correctand current. If the EFT information in the CCR database is incorrect,then the government may suspend payment until correct information isentered. Remember that if your EFT information changes, you areresponsible for seeing that the information in the CCR database isupdated.

    If you have more than one remittance address and/or EFT informationset in the CCR database, you must remember to notify the government ofthe payment receiving point applicable to the contract you are workingon. Otherwise, the government will automatically make payment to thefirst address.

    If an incomplete or erroneous transfer occurs because the governmentused a contractor’s EFT information incorrectly, the government isresponsible for making a correct payment, paying any prompt paymentpenalty and recovering any erroneously directed funds.

    The EFT information that the contractor must provide to the designated office includes:

    Warning

    Note that the government is required to protect against improper disclosure of all contractors’ EFT information.

    How To Write For Your Evaluator

    Ensure answers leave cover all objections about your suitability, an example of this is:

    Our market tested service solution works, and will deliver a step change in performance. 15 other local authorities already buy this service from us. Last year, we performed at 10% above national average benchmarks.

    You should:

    • be definitive, and write with conviction
    • be positive, focus on benefits and advantages
    • be substantive, giving evidence of success
    • build trust, showing evidence of confidence from other customers

    Use firm, positive language that clearly shows your commitment to your proposition. For example, use:

    • we will instead of we could
    • we know instead of we believe
    • we have or we know instead of we aspire to
    • we will meet instead of we aim to

    Simplify your language. For example, use:

    • enough instead of a sufficient amount of
    • like instead of along the lines of
    • as is true instead of as is the case
    • when instead of at such time as
    • now instead of at the present time
    • is instead of has been proved to be
    • if instead of in the event that

    When using jargon or technical language, evaluators need context to understand why a feature may be beneficial.

    Dont write:

    Our hand-held petrol chainsaw has a 50cc engine, operating at 9000 RPMs, with an 18 inch bar, and a power output of 3.4kw.

    Write:

    Address all aspects of the specification, and convert areas of weaknesses into areas of strength.

    Remember that:

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    Solicitation Provision And Contract Clauses

    The contracting officer shall insert the clause at-

    52.232-33, Payment by Electronic Funds Transfer-System for Award Management, in solicitations and contracts that include the provision at 52.204-7 System for Award Management, or an agency clause that requires a contractor to be registered in SAM and maintain registration until final payment, unless

    Payment will be made through a third party arrangement of this section) or

    An exception listed in 32.1103 through applies.

    52.232-34, Payment by Electronic Funds Transfer-Other than System for Award Management, in solicitations and contracts that require EFT as the method for payment but do not include the provision at 52.204-7, System for Award Management, or a similar agency clause that requires the contractor to be registered in the SAM.

    If permitted by agency procedures, the contracting officer may insert in paragraph of the clause, a particular time after award, such as a fixed number of days, or event such as the submission of the first request for payment.

    If no agency procedures are prescribed, the time period inserted in paragraph of the clause shall be “no later than 15 days prior to submission of the first request for payment.”

    If the head of the agency has authorized, in accordance with 32.1106, to use a nondomestic EFT mechanism, the contracting officer shall insert in solicitations and contracts a clause substantially the same as 52.232-33 or 52.232-34 that clearly addresses the nondomestic EFT mechanism.

    Nonpayment Of Subcontractors Under Contracts Other Than For Commercial Products And Commercial Services

    New GST Rate for Estimate and Works Contract

    32.112-1 Subcontractor assertions of nonpayment.

    In accordance with Section 806 of Pub.L.102-190, as amended by Sections2091 and 8105 of Pub.L.103-355 , upon the assertion by a subcontractor or supplier of a Federal contractor that the subcontractor or supplier has not been paid in accordance with the payment terms of the subcontract, purchase order, or other agreement with the prime contractor, the contracting officer may determine-

    For a construction contract, whether the contractor has made-

    Progress payments to the subcontractor or supplier in compliance with Chapter 39 of Title 31, United States Code or

    Final payment to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor

    For a contract other than construction, whether the contractor has made progress payments, final payments, or other payments to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement with the prime contractor or

    For any contract, whether the contractors certification of payment of a subcontractor or supplier accompanying its payment request to the Government is accurate.

    If, in making the determination in paragraphs and of this subsection, the contracting officer finds the prime contractor is not in compliance, the contracting officer may-

    Encourage the contractor to make timely payment to the subcontractor or supplier or

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    Subcontracts Under Prime Contracts Providing Progress Payments

    Subcontracts may include either performance-based payments, provided they meet the criteria in 32.1003, or progress payments, provided they meet the criteria in subpart 32.5 for customary progress payments, but not both. Subcontracts for commercial purchases may include commercial product or commercial service purchase financing terms, provided they meet the criteria in 32.202-1.

    The contractors requests for progress payments may include the full amount of commercial product or commercial service purchase financing payments, performance-based payments, or progress payments to a subcontractor, whether paid or unpaid, provided that unpaid amounts are limited to amounts determined due and that the contractor will pay-

    In accordance with the terms and conditions of a subcontract or invoice and

    Ordinarily within 30 days of the submission of the contractors progress payment request to the Government.

    When financing payments are in the form of progress payments, the Progress Payments clause at 52.232-16 requires that the subcontract include the substance of the Progress Payments clause in the prime contract, modified to indicate that the contractor, not the Government, awards the subcontract and administers the progress payments. The following exceptions apply to wording modifications:

    The term “Contracting Officer” may be changed to “Contracting Officer or Prime Contractor.”

    The term “the Government” may be changed to “the Government or Prime Contractor.”

    Unenforceability Of Unauthorized Obligations

    Many supplies or services are acquired subject to supplier license agreements. These are particularly common in information technology acquisitions, but they may apply to any supply or service. For example, computer software and services delivered through the internet are often subject to license agreements, referred to as End User License Agreements , Terms of Service , or other similar legal instruments or agreements. Many of these agreements contain indemnification clauses that are inconsistent with Federal law and unenforceable, but which could create a violation of the Anti-Deficiency Act if agreed to by the Government.

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    Ways You Can Sell To Government

    Contracts, contract vehicles, commercial platforms and small business set-asides are how the government obtains many of the products and services it needs. When existing options don’t meet the needs of federal agencies, we’ll award a new contract or contract vehicle through our Multiple Award Schedule or a solicitation on SAM.gov.

    A contract is how the U.S. Government purchases or procures products or services that are for the direct benefit and use of a government agency. A contract is a legally binding agreement that is governed by the Federal Acquisition Regulation .

    The Federal Acquisition Regulation contains the policies and procedures that must be followed by all executive federal agencies when acquiring products or services.

    There are two types of contract awards:

    • A single award contract is a contract awarded to a single vendor. Any task orders issued against the single award contract go to the single vendor to be completed.
    • A multiple award contract is a contract awarded to multiple vendors. Any task orders issued against a multiple award contract are competed for amongst the pool of vendors awarded the contract.

    The contract arrangement details how your business will be paid. The two most common types of arrangements are:

    Learn more about contract arrangements in Section 16 of the FAR.

    Types of contract vehicles

  • Request information on how to sell through Overstock Government
  • Tips For Getting Started In Federal Contracting

    Government Contract Proposal Template Collection

    Editor’s Note: This post was originally published in April 2021 and has been updated for accuracy and comprehensiveness.

    Federal contracting is an excellent way for businesses to open up a new stream of revenue. That’s because as a customer, the federal government is one who:

    • Actively looks to work with small businesses
    • Is guaranteed to have the funds to pay you
    • Spends more in times of recession
    • Wants to build long-term working relationships with reliable vendors

    So how do you even approach working with the largest buyer of goods and services in the world?

    That’s what this blog post is going to cover.

    Here, we’ll go over:

    Plus, at the end of this post is a FREE downloadable guide that will teach you the fast and easy way to get started in federal contracting.

    Let’s begin.

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    Progress Payments Under Construction Contracts

    When satisfactory progress has not been achieved by a contractor during any period for which a progress payment is to be made, a percentage of the progress payment may be retained. Retainage should not be used as a substitute for good contract management, and the contracting officer should not withhold funds without cause. Determinations to retain and the specific amount to be withheld shall be made by the contracting officers on a case-by-case basis. Such decisions will be based on the contracting officers assessment of past performance and the likelihood that such performance will continue. The amount of retainage withheld shall not exceed 10 percent of the approved estimated amount in accordance with the terms of the contract and may be adjusted as the contract approaches completion to recognize better than expected performance, the ability to rely on alternative safeguards, and other factors. Upon completion of all contract requirements, retained amounts shall be paid promptly.

    An Overview Of Government Contract Law

    The government of the United States buys more products and services than any other entity worldwide. The United States Department of Defense makes up a large portion of the country’s purchases.

    There are three main differences between government purchases and those of the private consumer:

  • Government contracts are highly regulated to ensure the most competition, guarantee proper use of government funds, and promote a healthy economy.
  • Government contracts include clauses, like the “changes” or “default” clauses, that allow the government to enact special rights within the contract like being able to change the terms of the contract or even end it.
  • Government contracts follow the procedures laid out in the Contract Disputes Act should there be any claims or legal action, because the government is a sovereign entity.
  • The Competition in Contracting Act and Federal Acquisition Streamlining Act are both important laws that regulate government contracts.

    The Federal Acquisition Regulation controls any acquisitions performed by the United States Executive Branch, and it is outlined in title 48 of chapter one in the Code of Federal Regulations parts 1 through 53.

    Agencies like the DOD, NASA, and the General Services Administration can create supplements to the Federal Acquisition Regulation. Those three specific agencies actually amended the FAR in pursuit of the Administrative Procedure Act.

    A contract officer is authorized to grant, manage, or terminate a government contract.

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    How To Structure Your Answer

    • if the question includes bullet points, adopt these as subheadings. With equal space allocated to each
    • if there are no bullets, break down the different elements of the question to determine the best answer structure
    • address each point in the same order as they appear within the question
    • avoid extra subheadings which distract from the core wording of the question

    Not Sure Where To Start

    Contract Administration: Preparing Effective Statements of Work

    As you can see, you have options when it comes to working with the Federal Government. There may be some cash available, but is this the right opportunity for you and your business?

    If you still have questions about the financial benefits, and potential downsides, of government contracting, we can help. We work closely with a wide variety of government contractors and are a GSA Schedule holder that specializes in government audits. Get in touch with us today.

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    Finding State Contracting Opportunities

    There are numerous entities throughout the State that issue solicitations for various types of goods, services, and construction contracts. Below we highlight some of the entities that issue a substantial number of the Stateâs procurements, but vendors should be aware that other entities, including Colleges and Universities, can also provide contracting opportunities. Each state agency may also list its own specific procurement opportunities.

    Consideration For Contract Financing

    Requirement. When a contract financing clause is included at the inception of a contract, there shall be no separate consideration for the contract financing clause. The value of the contract financing to the contractor is expected to be reflected in either a bid or negotiated price that will be lower than such price would have been in the absence of the contract financing, or contract terms and conditions, other than price, that are more beneficial to the Government than they would have been in the absence of the contract financing. Adequate new consideration is required for changes to, or the addition of, contract financing after award.

    Amount of new consideration. The contractor may provide new consideration by monetary or nonmonetary means, provided the value is adequate. The fair and reasonable consideration should approximate the amount by which the price would have been less had the contract financing terms been contained in the initial contract. In the absence of definite information on this point, the contracting officer should apply the following criteria in evaluating whether the proposed new consideration is adequate:

    The value to the contractor of the anticipated amount and duration of the contract financing at the imputed financial costs of the equivalent working capital.

    The estimated profit rate to be earned through contract performance.

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