Sponsored Guest Article by William A. Shook, Partner, Preston Gates Ellis & Rouvelas Meeds LLP
The U.S. Government can be a great customer for Washington businesses and nonprofits. However, as with any public sector customer, unique requirements and contract terms apply. Careful and thoughtful consideration of, and compliance with, these unique terms will help ensure a mutuality beneficial contractual relationship.
Although not a comprehensive list, Washington Technology Center customers and partners that currently are selling or want to sell goods and services to the Government should examine their business practices with regards to the following areas:
Intellectual Property — Entities must identify prior to contracting with the government the intellectual property that was developed with non-government funds and must appropriately “mark” restricted rights or limited rights technical data. After-the-fact identification can be extremely difficult and the burden shifts to the contractor to prove its case.
Nondiscrimination Requirements — Includes Equal Employment Opportunity, Affirmative Action Plans, and Accessible Products for the Disabled. Requires filing of annual reports.
Country Preference Laws — Includes Buy American Act and Trade Agreements Act. Requires that preference for American-made products for smaller dollar procurements and prohibits the purchase in larger dollar procurements of products manufactured in countries that do not participate in the public procurement portion of the World Trade Organization.
Price Negotiation — The establishment of a “fair and reasonable” price for products and services can include providing the government with evidence of catalog pricing, competitive pricing, or cost data which must always be accurate and in some instances both current and complete.
Gifts and Gratuities — Government employees are prohibited from accepting anything of value (in excess of $20) from entities seeking to do business with the government. Entities are prohibited from offering anything of value to a government employee in exchange for favorable treatment.
“Prompt” Payment — Although the government has a reputation for being a slow pay, the Prompt Payment Act requires payment within 30 days of the submission of a “proper” invoice. Failure to receive payment can result in interest being owed. Entities should follow Prompt Payment Act procedures precisely so that the government has no excuse for late payments and any late payments should be addressed immediately.
Record-Keeping Requirements — When selling services by the hour, entities must keep very accurate and verifiable records for the time charged by each employee. In addition, contract records should be maintained for three years after final payment on a contract.
Security Clearances — For contractors involved in classified work, careful attention to maintaining a facility clearance and clearance for personnel is a must. Entities must have a well-trained facility clearance officer knowledgeable of required duties.
With a bit of advance planning and attention to “boiler plate” clauses, contracting with the government can be an important and profitable portion of any business plan.
About William Shook
Bill Shook, co-author of the casebook Government Contract Law, heads Preston Gates & Ellis LLP’s Government Contracts, Construction and Procurement Policy practice group.
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