Differences Between Government and Commercial Contracting

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Differences Between Government and Commercial
Contracting Mr. James Kelly Contracting
Specialist, 87 CONS
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Key Differences

• Eligibility
• Opportunities
• Pricing Restrictions
• Increased Oversight
• Changes and Terminations
• Criminal Sanctions
• Disputes

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Eligibility

• Commercial
• In Commercial Contracting you are eligible to do
  business with anyone at anytime.
• Government
• For a Government Contract you must take the
  following actions before becoming eligible to do
  business with the Government
• Obtain a DUNS Number
• Register with Central Contractors Registration
• Obtain a Commercial and Government Entity
  Code(CAGE)
• Register with Online Representations and
  Certifications

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Opportunity

• Commercial
• For commercial contracts you obtain business how
  ever you can find it. You may perform cold calls
  or door to door sales to get customers.
• Government
• The Government competes their requirements per
  Federal Acquisition Regulation Part 6.
• No door to door or cold call sales with the
  Government
• Sole-source contract awards are the exception
• The Government solicits for its requirements
  through Government wide Points of Entry like
• Federal Business Opportunities, or
• the General Services Administration.

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Government-wide Points of Entry

• Federal Business Opportunities
• Can be accessed through the Central Contractors
  Registration Website or through FedBizOpps web
  site
• Follow Instructions for Vendors to find
  Opportunities and to Register
• General Services Administration(GSA)
• Follow Instructions for Doing Business With GSA

http//www.fbo.gov
http//www.gsa.gov
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Pricing Restrictions

• Commercial
• In Commercial Contracting profit is based on
  competition in the industry and what the customer
  is willing to pay
• Government
• In Government Contracting profit is restricted
  depending on level of risk involved and type of
  contract due to legislative restrictions.
• FAR Part 16 explains the types of contracts the
  Government may use and the restrictions involved
  with each type of contract.

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Increased Oversight

• Commercial
• Commercial Contracting only involves two people,
  the customer and the contractor. The customer
  has a need and the contractor fulfills the
  requirement
• Government
• Government Contracting involves the Customer, a
  Contractor, Congress, and the General Public
• Every purchase made is in the view of the public
  --we are spending the publics tax dollars.
• Must justify every purchase and follow regulatory
  requirements for each purchase.
• Publicizes awards-if awarded a contract, your
  Company Name and dollar value awarded becomes
  public knowledge.

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Changes and Terminations

• Commercial
• In Commercial contracting changes in scope can
  stop a contract in its place
• Government
• During the change process in Government
  contracting, the contractor must continue
  performance and await relief
• Can terminate a contract
• Termination for Convenience of the Government
• Allows for contractor to recover their costs but
  not recover lost profit
• Termination for Default of the Contractor
• Default on the part of the contractor--no cost or
  profit recovery allowed.

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Criminal Sanctions

• The Anti-Kickback Act
• Deters subcontractor payment to prime contractors
  for subcontracts
• The False Statements Accountability Act
• Criminal Offense to give false statements or
  information to the Government
• The False Claims Act
• Criminal and civil penalties for submitting false
  claims for payment or substituting products and
  services without Government consent
• The Sherman Antitrust Act
• Oppose the combination of entities that could
  potentially harm competition, such as monopolies
  or cartels

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Disputes

• Commercial
• An award decision is made and is final. No one
  can question the decision.
• Government
• An award decision is made and can be changed.
  Any interested party can file a protest against
  the Governments decision.
• Protest - written objection by a interested party
  to the Governments solicitation, award,
  termination or cancelation of the solicitation or
  award.
• Disputes and Appeals - Disagreements between the
  Government and the Contractor that result in a
  claim

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Final Thoughts

• Government contracting can be profitable for your
  business.
• To do business with the Government your business
  processes, procedures and practices must be
  designed to comply with the three Rs
• Rules
• Regulations
• Risk

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• QUESTIONS?