Obtaining a federal government contract is often challenging

Earlier this year, a Los Angeles Times news article noted the fact that, with Washington gridlock, federal spending on infrastructure was falling woefully short of what was necessary both in California and nationally. More recently – in the wake of the 2014 elections – Engineering News Record reports that construction industry officials are holding out hope for bipartisan infrastructure bills in the new Congress. A spokesperson for the Associated General Contractors of America said that his group would work hard to encourage Congress and the Obama Administration to find "common ground" on infrastructure funding.

Government contracts can be financially remunerative and some companies could not survive without them. At the same time, bidding on a federal government contract is sometimes not for the faint of heart. As observed by Entrepreneur Magazine, "navigating the many layers of bureaucracy can be challenging." Seeking a government contract has, according to some, become more challenging in light of the recent White House executive order known as the Fair Pay and Safe Workplaces Executive Order.

Among other things, the new Executive Order requires that contractors bidding on federal procurement contracts for goods and services valued at more than $500,000 per contract must disclose any labor violations for the past three years. Construction contracts are specifically included within the scope of the order. The disclosures would cover violations of statutes covering pay, safety, health, collective bargaining and civil rights. According to the White House, the intent of the executive order is to "promote economy and efficiency in procurement by contracting with responsible sources who comply with labor laws." Once a contract has been obtained, contractors must periodically update their labor law violation disclosures.

Some in the construction industry believe the new Executive Order will create compliance nightmares if fully implemented. The Professional Services Council has protested that the Executive Order is contrary to existing law and will result in exorbitant increased costs to the government and companies. Moreover, according to the Council, the executive order "lacks an executable framework." Chiming in, the trade group International Franchise Association believes that the executive order holds American businesses to an unreasonable standard of perfection.

The Order has its supporters. According to a Washington Post news article, supporters believe that the requirements are long overdue and necessary in light of reports revealing that contractors who did not comply with federal laws still receive government contracts. A spokesperson for the Project on Government Oversight said that disclosing labor violations is good for both the public and the government.

Some tips

Entrepreneur Magazine advises that, if you are interested in obtaining government contracts, make sure that you get your "business protocols" up to government standards. You will find that you will need things ranging from business insurance to high-speed Internet and a business plan that shows your ability to do work for the government. Most importantly, you will need to practice exceptionally good recordkeeping in order to protect your business in case a government auditor has questions about whether you are spending the taxpayer's money efficiently.

If you are new to seeking a federal government contract, Entrepreneur Magazine suggests that you consider determining whether your business qualifies for preferential status such as veteran-owned, women-owned or HUBZone certified.

Seeking legal help

If you are among the many California businesses that seek federal government contracts, you should contact a California attorney experienced in handling matters involving contract bidding, negotiation and preparation. The attorney can help advise you on how to deal with the sometimes bedeviling maze of government rules and regulations.

Contact the Law Offices of John R. Lobherr, Inc., at our Irvine, California office by calling 949-751-6389 for more information.