The double-edged sword of oversight

Is increased oversight a burden, or an opportunity to stand apart from the crowd?

We've been reporting for some time now that government contractors and subcontractors are coming under increased scrutiny. Previously, small business subcontractors were somewhat immune from harm, but this immunity is rapidly being whittled away. The Washington Post has noticed this phenomenon:

"The days of 'No one is checking,' are over. For too long, there was inadequate oversight." --Daniel Gordon, an administrator at the White House Office of Federal Procurement Policy

Washington Technology is reporting the same thing this week.

This increased focus on procurement regulations might have some contractors and subcontractors quaking in their boots. Oversight tends to send business owners into a panic, because it often means increased costs in a world of razor thin profit margins. No one wants to risk being debarred or suspended, or have payments withheld, especially when federal contracting can provide a crucial stream of profitable business in many industries.

But the costs need not be prohibitive, and this negative can be turned into a strong positive for contractors and subcontractors. Increased oversight is bad news for those who don't follow government regulations, but good news to those who know and observe the rules!

There are great benefits to proving competence with federal procurement regulations. A contractor who can say they have a procurement regulations management system in place is going to be much more attractive to contracting officers than those who don't. Competence is a crucial factor among contracting officers when evaluating the competition--you can place yourself above your competitors by showing that this new focus on oversight doesn't burden or scare you because you have already taken steps to ensure compliance.

FARSmarterBids.com offers the most extensive library of federal procurement regulations in one place. Not only that, but regulations can be managed: contractors and subcontractors can store key regulations in their own virtual filing cabinets for easy, repeated access, meaning they can save valuable time and energy, preserving their profit margins. Many contractors use what they learn from the service to supplement the knowledge they receive from attorneys and consultants, thus shaving hundreds to thousands off these professionals' fees. All of this is offered for a low monthly or quarterly fee--as low as $55 per month.

Of course, just knowing the federal procurement playbook in general confers benefits of its own. This knowledge helps you compete because you have a better grasp of the regulatory costs and can use that knowledge to decide on what contracts to bid.

Subcontractors, too, can use this knowledge to better compete for work. Any smart businessperson will tell you how crucial it is to know your customer--and that includes being familiar with their regulatory landscape. Subcontractors who understand what the primes are up against--including payment withholding and evaluating supply chain risk--are attractive competitors. Often, subcontractors must comply with regulations when completing work for a prime contractor--those who work within the scope of those regulations are going to find themselves better positioned for repeat work.

Also, subcontractors can better insulate themselves from lawsuits and disputes if prime contractors face penalties levied by federal contract managers or agency heads if they know their regulations. This means potentially averting costly, even business-killing litigation in the unfortunate event a prime contractor tries shifting the blame to a subcontractor in such a situation. The knowledge contained within FARSmarterBids provides a cost-effective "keep off the grass" sign to prime contractors who might try an underhanded technique to keep the heat off themselves.

We find that, far from being a costly burden, compliance with federal procurement regulations can be turned into a net positive. At very little cost, prime contractors and subcontractors can market themselves as the most capable, competent, efficient organizations with which to do business. Instead of groaning at the thought of increased oversight, companies can relish the thought of beating out the competition by playing the government's game.

Implications of the GTSI Suspension: FARS Management

Jonathan S. Aronie over at GovernmentContractsLawBlog.com pointed out some interesting implications of the recent GTSI suspension.

He astutely points out some possible consequences:

"Prime contractors reassessing their current relationships with small businesses. (And small businesses doing the same.)

Greater contracting officer focus on the SBA’s rules, and greater scrutiny of proposals in set-aside procurements.

SBA OIG audits of large and small teammates on set-aside contracts, like SEWP or FirstSource."

A greater focus on the rules. Audits. Sound familiar? Anyone who has been following contracting news knows that the Obama Administration has placed a greater focus on oversight and regulations. But what is a contractor to do about it?

Small businesses that find themselves under greater scrutiny by prime contractors should take a look at how they manage the FARS. Proving competence with the FARS is a good way for contractors to keep each other comfortable with the arrangement. Would you do business with someone who doesn't keep track of the terms of the contracts you make with them? Someone who ignores applicable regulations--which may in turn get you suspended, or get you negative ratings in the FAPIIS system, or may cause the DoD to withhold payments? Someone who would make you look less trustworthy to the greater contracting community?

Yet the FARS and their supplements are a monstrosity. How can a small business compete? It's increasingly apparent that in order to stay competitive, a FARS management system is crucial. It's not enough to print out regulations, stuff them into a folder and never look at them again. It's not enough to keep them in overflowing email inboxes. Competitive contractors of all sizes face the need to prove regulatory competence, the same way ISO-certified companies must.

Mr. Aronie also points out in his post:

"When push comes to shove, you may not get the expected mileage from a defense based upon the oral advice of a contracting officer."

Contractors shouldn't take the word of others; they need to be responsible for this information themselves. Competitive contractors must show that they have the regulations at their fingertips, and that applicable regulations are revisited frequently to ensure compliance. ISO certified companies often attest to the increased business brought by their certifications; we believe the same will be true of contractors who can show good FARS management.

Free FARS management subscription

If you're interested in a FARS management system with comprehensive scope and easy ways to save links and annotations to the FARS, check out the FARSmarterBids subscription service. We now offer a free 1-month trial to help you evaluate our software, to see how it can help save you time and money, and avoid contracting risks.

FarSmarter Government Contracting

We'd like to welcome readers to our new blog.  We've created this space to share U.S. federal government contracting news, updates, and information in an in-depth environment that allows for comments and interaction.  We will post articles and commentary, and we'd love to hear from you as well, so please feel free to reply to our articles.

By way of background, FARSmarterBids is a web-based service that aims to make contracting accessible to all companies, regardless of size and resources.  We are passionate about making the Federal Acquisition Regulation System (FARS) and associated regulations easy to find and manage.  We are also passionate about helping new and existing contractors navigate the maze of government websites, many of which have good information--like prime and subcontractor lists, contact information for contracting officers, and vendor outreach events--that is unfortunately obscured by the sheer quantity of .gov sites out there.

One of the keys to being an effective, competitive, and profitable contractor is staying compliant with the government's contract regulations.  This sounds easy to do in theory, but is hard to accomplish in practice.  Looking up a regulation once doesn't cut it.  These rules need to be at a contractor's fingertips, organized in a way that makes sense to him or her.  Our system contains a online Filing Cabinet that allows our clients to save and organize key regulations so that compliance is just a mouse click away.  Any information in our agency resource library, as well as any external link, can also be filed in the same manner.  We believe this kind of knowledge management is one of the most important things a contractor can do to be successful.

It's our goal to help contractors to bid more competitively.  To that end, we hope you find this blog interesting and informative.  Bid Smarter. Far Smarter.