Sabre

Three R's of Government Contracting

The three R's stand for rules, regulations and risks; as a government contractor, it's vital that you have an in depth knowledge of the three R's. Below are just a few of the important things you need to know if you want to go from commercial to federal government contracting:

The Anti-Kickback Act

While it may be acceptable as a commercial contractor to provide kickbacks in order to influence the awarding of a contract, under a prime government contract this type of activity is a criminal offence.

The False Statements Act

If you provide false information or make false statements to the government, you'll be subject to criminal penalties.

The False Claims Act

False claims include claims for payment and substituting products and services without the knowledge and consent of the government agency you contracted with. If you're find liable for false claims, you may face both criminal and civil penalties.

The Sherman Antitrust Act

Under this act, corporate officers/directors can be personally liable for contract violations such as bid rigging and collusive pricing. This includes awareness of the violations as well as knowing and not doing anything about it.

The above four acts are just the tip of the iceberg. Among other rules, regulations and risks of government contracting is pricing restrictions.

In going from commercial to government contracts, you may lose the ability to establish pricing based on the principles of supply and demand. Legislative restrictions allow a contractor to make a certain amount of profit per contract, depending on factors like the level of technology involved, the level of performance risk and the level of contractor effort, to name a few.

While government contracting has some definite rewards, without in depth knowledge of the three R's you may find yourself facing some even more definite risks.