Winning a contract to provide goods and services to the federal government is often an arduous process. Enlisting aid from a government contractor consulting firm can make the experience easier and more profitable. 

In fiscal year 2020, the federal government spent more than $668 billion on contracts. That figure dipped slightly to $629 billion in fiscal year 2021. Also, the Small Business Administration says a quarter of the federal government’s contract budget must go to small businesses. 

To win a government contract, it usually takes a combination of a highly skilled business and leadership that is equally skilled at navigating the many rules and regulations. Government contractor consultants help businesses not only win government contracts, but also avoid penalties for doing things the wrong way. 

In this article, we will detail the ins and outs of working with the federal government and how a government contractor consulting firm can give a business a competitive advantage. 

Use government contractor consulting to avoid penalties 

As in any area of life, mistakes happen. But inaccuracies, miscalculations or misconduct when working with the federal government can be costly — even resulting in imprisonment. When you become a government contractor, you take on the responsibility of complying with the rules and regulations that go with doing business with federal agencies. 

In this section, we will explain some of the negative consequences of doing business with the federal government incorrectly. 

The Defense Contract Audit Agency (DCAA) performs federal contract audits for the Department of Defense (DOD). To be DCAA compliant means that your business is following the agency’s rules clearly enough that it’s obvious to the agency and by implementing documented policies and business systems that meet the agency’s requirements. Contractors subject themselves to compliance review simply by participating in the government contracting. 

Audits by the DCAA are guided by rules outlined by the following: 

• CAS, or Cost Accounting Standards, which are used to create consistency between cost accounting practices used for different types of contracts. 
• GAGAS, or generally accepted government auditing standards, which spell out the standards that auditors must use. 
• FAR, or Federal Acquisition Regulation, which is a massive set of rules used by federal agencies when they buy goods or services from contractors. 

The DCAA performs several types of audits. These include:  

• Forward pricing. These audits typically happen before the contract is awarded. The government uses them to evaluate a contractor’s cost estimate for the project.  
• Special audits. These can take place before or after a contract is awarded. They are generally requested by contracting officers seeking an independent financial opinion on a contract or a contractor’s accounting business system. 
• Incurred cost audits. These audits determine the accuracy of a contractor’s annual allowable cost representations.  
• Pre-award surveys. Auditors study the contractor’s accounting system and determine whether it’s acceptable for a government contract award. 

The government does other types of audits after contracts are awarded, often in high-risk scenarios.  

Government contractors face many negative outcomes for non-compliance. Penalties range from suspension to criminal or civil penalties. 

Debarment can happen when a contractor commits fraud in obtaining or performing a contract, violates antitrust laws, or commits other offenses. Agencies cannot consider bids and proposals from debarred contractors. It’s one of the most serious punishments the federal government can inflict on a contractor. Debarment from one agency impacts your abilities governmentwide.  

The Excluded Parties List System (EPLS) is a directory of individuals, businesses or organizations that are barred from receiving federal contracts or assistance from the U.S. government. 

Civil or criminal penalties are generally exacted per violation, per invoice. The government can use such penalties to recover money or damages. Criminal penalties can lead to imprisonment for the person who signed certificates of cost or any pricing data. 

Help in navigating red tape 

As we’ve seen, there is much to navigate in the world of federal procurement. In this section, we’ll look at how government contract consultants can help you avoid pitfalls and obtain more business. 

Registering to do business with the government 

The first thing government contract compliance consultants can do for a business is get it correctly registered as a small business or large government contractor in the System for Award Management, formerly the Central Contractor Registration database. This task is relatively easy, if you know what you are doing. Businesses can register in several places to make themselves available for work. Government contracting consultants can quickly walk a business through this first step. That saves precious time, so the business can start to seek contracts and put together proposals. 

Adequate accounting practices 

When working with the federal government, a business must submit proposals and invoices using adequate accounting practices. Because some businesses operate with accounting systems that the government could consider outdated, a consultant helps to develop solutions and an accounting system that will be acceptable to any federal agency. 

Cost principles, “allowable” and “unallowable” costs 

The government deems certain costs in a proposal as allowable or unallowable. Essentially, cost principles take specific elements of cost and tell the contractor which they can charge for and which they cannot. A consultant helps businesses understand which costs are which. Is it really that important? Well, trying to get reimbursed for a cost deemed unallowable could result in penalty charges or interest. 

FAR and CAS 

As previously stated, FAR and CAS are practices or sets of rules that businesses must abide by when constructing a bid. FAR has more than 50 sections and covers more than 1,900 pages. Consulting firms understand the ins and outs of these standards and can make sure your proposal is airtight and fully compliant. 

Audit support 

It’s possible that your proposal will receive an audit to assess its overall compliance with government contracting requirements. A consultant will offer audit support, walking you through the feedback or process of an audit by the DCAA, any other government entity or defense contract audit agency. 

Contract closeout 

As you can guess, there are specific procedures to be followed when closing a contract, and it’s paramount to follow those procedures strictly. Consultants will assist you in the closeout process and make sure there are no errors preventing your future abilities to procure contracts. 

Help in finding contracts 

A consultant can do much, much more than help you prepare your proposal, meet compliance requirements, and make sure your accounting systems are in line. Because they work with federal agencies and contract officers frequently, they truly have a leg up. 

How do consultants get contracts? Beyond navigating the red tape we discussed previously, contract consultants are prepared to share their advantages with you. Here are just a few scenarios where an in-the-know consultant can really make a difference for your business: 

• Contract officers have experience and existing relationships with various contracting officers. It means they understand that contracting officer’s preferences for things like proposal submissions, and they have experience communicating with them. That only lends to their ability to get your proposal ready and in front of the contracting officer. 
• How do you know what a fair but competitive price is when writing your first bid? Experienced consultants can offer guidance on this all-important part of proposal preparation. They’ll also be able to guide you on what is allowable and not allowable pricing. 
• Sometimes, a contractor spends more time, money or resources on a contract than it expected. It needs to file a request for an equitable adjustment (REA). That can be a tedious task that requires insight and professionalism. A government contract consulting firm can save the profit on a contract by helping with this one task.  
• As previously demonstrated, consultants are available to walk a company through the entire contract preparation process, and see the bid through. They’re there to offer support for the lifecycle of a contract. 
• So, you finish a contract and you’re looking to move onto the next opportunity. A consultant can provide you with new opportunities that your business is qualified to bid on. 

Conclusion 

Whether it’s your first time pursuing a government contract, or you’ve done it before, a contract consultant can help you navigate the federal marketplace, start to finish. GovCon Wealth, a division of Cope Corrales, is ready to help government contractors looking to sell their businesses and position them for a smooth sale.