Federal Government Contracts Toolkit
A collection of resources to help existing and potential federal government contractors and their counsel when contracting with US federal government.
US government procurement spending exceeds $500 billion annually with purchases ranging from office supplies to major weapons systems. Along with potential opportunity, federal government contracts present significant regulatory and compliance challenges for all involved. From a small business considering a subcontracting opportunity on a federal project to a large corporation acquiring a government contractor, federal procurement regulations impact a wide array of commercial parties, including some who have no contractual relationship with the government.
Title 48 of the Code of Federal Regulations, commonly referred to as the Federal Acquisition Regulation (FAR), governs the formation and administration of contracts with the US government. There are also more than 20 FAR supplements that govern procurements made by specific agencies. For example, the Department of Defense FAR Supplement (DFARS) governs most procurements by the Department of Defense, any branch of the US Armed Forces, and the National Aeronautic and Space Agency (48 C.F.R. ch. 2).
Most types of commercial transactions result from the combined operation of freedom of contract principles and the parties' relative bargaining power, whereby parties freely negotiate and agree to terms for their transaction. However, when entering into an agreement with the federal government, bargaining power is limited. The FAR, related supplements, and other procurement regulations govern virtually every aspect of procurement agreements between private suppliers and the federal government, including:
The terms of the agreement between the supplier and the procuring agency.
The procurement-award process.
Federal government contractors must also consider several other issues that suppliers to private parties do not usually need to consider, including:
Cost accounting principles.
Domestic preference requirements.
Unilateral termination by the procuring agency.
Potential liability exposure when acquiring a federal government contractor.
Dispute resolution procedures and requirements (see Bid Protests).
This Toolkit is a collection of resources designed to help federal government contractors and their counsel understand and deal with US federal government procurement regulations, procedures, and compliance. The resources in this Toolkit are limited to federal government contracting and do not address issues relating to contracts with local governments.
Competitive bidding is a major method through which federal agencies award procurement opportunities to suppliers. Normally, a procuring agency solicits proposals for a procurement and the opportunity is awarded to the supplier that submits the best proposal (commonly referred to as a bid).
The competitive bidding process is a source of frequent disputes between disappointed or potential bidders and procuring agencies. These types of disputes, commonly referred to as bid protests, are not resolved through normal litigation at a court of general jurisdiction that would occur if both sides were private parties. Bid protests are resolved through special procedures at special forums. The final three Practice Notes listed below provide an overview of bid protests, listed in descending order of the formality of forum:
Country Q & A
For a tool that provides answers to common questions about public procurement around the world, including the US, see the Public procurement country Q&A Tool ( www.practicallaw.com/0-521-3360) . For the US-specific answers, see Public procurement in the United States: Overview ( www.practicallaw.com/3-521-7446) .