Basics of Government
Contracting
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Federal Procurement
Background
• The U.S. Government is the world’s
largest purchaser of goods and
services
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Federal Procurement
Background
• The U.S. Government is the world’s
largest purchaser of goods and
services
• All of this procurement is highly
regulated, primarily by the Federal
Acquisition Regulation (FAR)
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Federal Procurement
Background
• The FAR requires full and open
competition for federal contracts
– Naturally, there are exceptions
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Federal Procurement
Background
• Exceptions to “full and open”
competition
– Sole Source Contracts
– Statutory Requirement
– Small Business Set-Asides
• The Government has a “goal” that 23% of
all Federal Contract dollars will go to small
businesses
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What is a small business
set-aside?
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Small Business
Set-Asides
• “Set-aside” – Contract opportunity
limited to small business (or certain
type of small business)
• Federal Agencies are encouraged,
and sometimes required, to set aside
a contract
• Automatic set-aside if between $3K - $150K
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Small Business
Set-Asides
• “Rule of Two” – Contract must be
set-aside if:
– Valued at over $150K;
– Reasonable expectation to receive
offers from at least 2 small businesses;
and
– Award will be made at fair market price.
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Small Business
Set-Asides
– Types of Small Business Programs:
•
•
•
•
Small business set-aside
8(a) business development set-asides
HUBZone set-asides
Service-disabled veteran-owned, and
veteran-owned small business set-asides
(SDVOSB & VOSB)
• Women-owned small business set-asides
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How does the government
procure goods and services?
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Simplified Procurement
Process
– The Government announces what it
needs
• Fedbizopps.gov
– Interested contractors submit offers to
fill those needs
– Offers are reviewed and evaluated
– Contract Award  The procuring
agency enters into a contract with the
selected offeror
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Simplified Procurement
Process
• Two Primary Procurement Methods
– Sealed Bidding (FAR Part 14)
– Negotiated Procurements (FAR Part
15)
• More prevalent
• GSA Schedules
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Sealed Bidding
• Government issues an Invitation for
Bids (IFB)
– Contains all necessary specs and
requirements
• Interested contractors submit a Bid
– Must agree to all contract requirements
– Really all about price
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Sealed Bidding
• All bids are opened publicly
– Award made to lowest priced
responsive bid
– If lowest bidder determined nonresponsive, goes to next in line
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Negotiated Procurements
• Government issues a Request for
Proposals (RFP)
– Agency must follow terms of the RFP
• Interested contractors submit a
Proposal
– Demonstrate how they can meet RFP
requirements and at what price
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Negotiated Procurements
• Agencies can make an award based
on initial proposals, or enter into
“discussions” with offerors
• Where there are many proposals,
agencies may establish a
“competitive range”
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Negotiated Procurements
• After final proposals, agency makes
award decision based on process
identified in RFP.
– Referred to as “source selection
decision”
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Negotiated Procurements
• Debriefings – After award,
unsuccessful offerors may request a
post-award debriefing
– Agency must provide the debriefing
– Opportunity for contractor to pose
questions to agency as to why its offer
was not selected
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GSA Schedules
• Allows Federal Agencies to quickly
purchase commercial items and
services from listed vendors
– Vendors apply to GSA Schedules
– GSA awards schedule contract with set
prices/rates
– Contracts last up to 20 years
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Types of Government
Contracts
– Firm fixed-price  All risk on the
contractor
– Cost Reimbursement  Risk primarily
on government
• Also Cost plus Fee, and Cost plus Incentive
– Time and Materials
• Fixed hourly rates, must have a ceiling cost
– Indefinite Delivery, Indefinite Quantity
(ID/IQ)
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What are the difference
between government and
private contracts?
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Government vs. Private
• Changes Clause – Contractor must
do all additional work ordered by
agency, as long as it’s within scope
of the contract
– Contractor can submit request for
equitable adjustment
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Government vs. Private
• Termination for Convenience of the
Government
– Government can terminate any gov’t
contract, for any reason, at any time
– Contractor can recover costs
associated w/ termination
• No lost profits though
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Government vs. Private
• Disputes over government contracts
are highly regulated and very rarely
litigated in traditional courts
• Generally three types of disputes in
government contracting:
– Pre-award
– Post-award
– Performance related
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Pre-Award Disputes
• Contractors can protest terms of
solicitation
– Too restrictive, ambiguous
– Protest can be filed with either
Government Accountability Office
(GAO) or Court of Federal Claims
• Contractors can also protest
exclusion from “competitive range”
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Post-Award Disputes
• Contractors can protest the award
decision
– e.g., Improper evaluation
• Post-award protests can be filed in 3
forums:
– Agency
– GAO
– Court of Federal Claims
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Post-Award Disputes
• GAO Protests
– Interested parties have 10 days to
protest
– Automatic Stay is available
– Generally, the awardee is allowed to
intervene
– Decision due within 100 days
– Generally best option
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Performance Disputes
• Disputes begin with a claim for
money submitted to the contracting
officer
– CO has 60 days to issue Final Decision
responding to claim
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Performance Disputes
• Contractors can appeal denial of
claim in one of two forums:
– Board of Contract Appeals – Civilian
Board, Armed Services Board
– Court of Federal Claims
• Cannot appeal to both, must choose
one or other
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Performance Disputes
• Appeals to Boards of Contract
Appeals
– Must file appeal within 90 days of Final
Decision or deemed denial
• Appeals to Court of Federal Claims
– Must file within 1 year of denial
• Federal Circuit hears appeals of
these decisions
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Teaming Agreements
and Subcontracts
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Teaming Agreements
– Multiple companies agree to compete
as a team, usually before proposal
• Teaming Agreement between Prime
Contractor and Subcontractor(s)
– Generally, parties agree to negotiate
subcontract in good faith
• Joint Venture
– Multiple companies agree to perform together
as the Prime Contractor
– Binding Contracts
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Subcontracts
• Defines the relationship between
Prime and Subcontractor
– Typically executed after award
– Should include Sub’s scope of work
– Provisions from prime contract can
“flow down” to subcontract
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Basics of Government
Contracting
Contact Info:
General Counsel, P.C.
703-556-0411
info@gcpc.com
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