87th Air Base Wing
Differences Between Governmentand Commercial Contracting
Mr. James Kelly
Contracting Specialist, 87 CONS
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Key Differences
Eligibility
Opportunities
Pricing Restrictions
Increased Oversight
Changes and Terminations
Criminal Sanctions
Disputes
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Eligibility
Commercial
•In Commercial Contracting you are eligible to do businesswith anyone at anytime.
Government
•For a Government Contract you must take the followingactions before becoming eligible to do business with theGovernment:
1)Obtain a DUNS Number
2)Register with Central Contractors Registration
3)Obtain a Commercial and Government Entity Code(CAGE)
4)Register with Online Representations and Certifications
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Opportunity
Commercial
•For commercial contracts you obtain business how ever youcan find it. You may perform cold calls or door to door salesto get customers.
Government
•The Government competes their requirements per FederalAcquisition Regulation Part 6.
No door to door or cold call sales with the Government
“Sole-source” contract awards are the exception
•The Government solicits for its requirements throughGovernment wide Points of Entry like:
Federal Business Opportunities, or
the General Services Administration.
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Government-wide Points of Entry
Federal Business Opportunities
•Can be accessed through the Central ContractorsRegistration Website or through FedBizOpps web site
•Follow Instructions for Vendors to find Opportunities and toRegister
General Services Administration(GSA)
•Follow Instructions for Doing Business With GSA
http://www.fbo.gov
http://www.gsa.gov
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Pricing Restrictions
Commercial
•In Commercial Contracting profit is based on competition inthe industry and what the customer is willing to pay
Government
•In Government Contracting profit is restricted depending onlevel of risk involved and type of contract due to legislativerestrictions.
•FAR Part 16 explains the types of contracts the Governmentmay use and the restrictions involved with each type ofcontract.
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Increased Oversight
Commercial
•Commercial Contracting only involves two people, thecustomer and the contractor. The customer has a need andthe contractor fulfills the requirement
Government
•Government Contracting involves the Customer, a Contractor,Congress, and the General Public
•Every purchase made is in the view of the public --we arespending the public’s tax dollars.
•Must justify every purchase and follow regulatory requirementsfor each purchase.
•Publicizes awards-if awarded a contract, your Company Nameand dollar value awarded becomes public knowledge.
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Changes and Terminations
Commercial
•In Commercial contracting changes in scope can stop acontract in its place
Government
•During the change process in Government contracting, thecontractor must continue performance and await relief
•Can terminate a contract
Termination for Convenience of the Government
–Allows for contractor to recover their costs but not recover lost profit
Termination for Default of the Contractor
–Default on the part of the contractor--no cost or profit recoveryallowed.
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Criminal Sanctions
The Anti-Kickback Act
•Deters subcontractor payment to prime contractors forsubcontracts
The False Statements Accountability Act
•Criminal Offense to give false statements or information tothe Government
The False Claims Act
•Criminal and civil penalties for submitting false claims forpayment or substituting products and services withoutGovernment consent
The Sherman Antitrust Act
•Oppose the combination of entities that could potentiallyharm competition, such as monopolies or cartels
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Disputes
Commercial
•An award decision is made and is final. No one can questionthe decision.
Government
•An award decision is made and can be changed. Anyinterested party can file a protest against the Government’sdecision.
Protest - written objection by a interested party to theGovernments solicitation, award, termination or cancelation ofthe solicitation or award.
Disputes and Appeals - Disagreements between theGovernment and the Contractor that result in a claim
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Final Thoughts
Government contracting can be profitable for yourbusiness.
To do business with the Government your businessprocesses, procedures and practices must bedesigned to comply with the three R’s
•Rules
•Regulations
•Risk
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QUESTIONS?