How are Federal Contracts awarded?

In the private sector, contracts can vary greatly and are regulated only as far as they relate to the legality of the services or products being offered, and in that both parties consent to the contract. Otherwise, technically, two private individuals have virtually no restrictions on the content of their contracts.

When dealing with the public sector however, it is not as simple. This is because the government must maintain an inscrutable level of integrity and transparency.  Since they are dealing with public money and trust, regulations for federal contracts are very strict and tightly controlled.

That being said, things are not quite as black and white as outlined above. The Uniform Commercial Code (UCC) covers many contracts made in the private sector. Though, it is a different set of regulations to what controls federal contracts. Federal contracts are regulated by a large set of rules and guidelines that includes the Federal Acquisition Regulations (FAR) and its supplements. The interesting thing about this is that if the government contractor hires a subcontractor, this subcontractor might very well be accountable to the Uniform Commercial Code (UCC) while the middle contractor will still be accountable to the Federal Acquisition Regulations (FAR), its supplements, and any other government regulations. This can make the already difficult to navigate bureaucracy even more complicated.

Federal contracts are procured through a contracting officer who has been issued a proper warrant. The process of acquisition for the federal government has many steps, starting with the acquisition planning (which is described in the Federal Acquisition Regulations (FAR) and Far supplements). Planning is reliant on the needs dictated by the country’s current circumstances. For example, in a time of war, quantity may be more important than quality and this would be reflected in the planning. Many other factors should be examined in the planning step.

Federal contracts are not always handed to the lowest bidder, instead, Source Selection Criteria (SSC) are put into place. These criteria are in place to help determine which contractor provides the best value and will fulfill the government’s needs best. Like most criteria and regulations involved in securing federal contracts, the SSC are outlined in a few different provisions of the Federal Acquisition Regulations (FAR).

If you wish to obtain a federal contract for your business, there are many things you will need to keep in mind and you must understand that it is a long process, but of course, like any big contract for your business, it can be very rewarding. There are many resources available to help smaller business understand how to navigate through the difficult process. There is also some good news for small businesses; some of the regulations in place are to make sure a percentage of federal contracts are awarded to businesses just like yours.