Tips For Compliance For Government Contractors

Government contracts can be incredibly lucrative for businesses operating in the United States. While beneficial, these contracts often come with strict compliance requirements. Falling short on one or more of these regulations can be costly, both in fines and in contract revoking.

Here are some easy-to-follow tips to help companies comply with government contract regulations.

Understand the Basics

Government compliance regulations are in-depth and comprehensive. The Federal Acquisition Regulations are over 2,000 pages long. Don’t get intimidated by the length — reading every page is unnecessary, but understanding the basics is essential.

Violating these requirements doesn’t just disqualify a business from claiming or even competing for government contracts. It can also result in steep fines, civil monetary penalties, or even criminal sanctions, depending on the severity of the infraction.

Employing a government contract lawyer who understands the ins and outs of compliance and its potential pitfalls can help fill in the gaps and prevent accidental or incidental violations.

Build a Code of Ethics

A comprehensive ethics system is the foundation of government contract compliance. Companies must operate honestly, which means creating a written ethics code.

This system needs to be appropriate for both the business and the level of involvement within the government. It must also allow for timely reporting if any misconduct occurs and account for any corrective measures in that event.

Business owners should also work to foster a culture focusing on compliance and ethics — especially if obtaining government contracts is the goal.

Seek Out Compliance Verification

Seeking and receiving compliance verification can provide an extra layer of protection and ensure companies are always in compliance.

Types of compliance verification might include an anti-money laundering screening or Know Your Customer (KYC) or Know Your Business (KYB) screenings.

KYC screenings make it easier to verify customer identities, while KYB screenings work to ascertain a company’s legitimacy before engaging in a business relationship.

This list of compliance verification screenings isn’t exhaustive and may vary depending on the details of the contract or the company’s industry.

Businesses working with medical professionals or pharmaceutical companies — as well as those storing or transmitting protected patient data — will require a HIPAA compliance certification, for example.

Obtain All Relevant Certifications

Government contractors must often obtain specific certifications concerning their contracts or business relationships. The details of a business’s certificates will vary depending on the industry and the details of the contract.

The Office of Federal Procurement Policy and the Federal Acquisition Institute break these certification programs down into three categories: 

  • Contracting (FAC-C)
  • Contracting Officer’s Representatives (FAC-COR)
  • Program and Project Managers (FAC-P/PM)

Each category contains the necessary information about certification, including requirements, training, and competencies.

Staying Compliant

Securing a government contract is only one piece of the puzzle. Becoming compliant and maintaining that compliance will help companies retain their contracts and prevent costly fines and fees.

Don’t hesitate to contact professionals — including government contract lawyers — to fill in the gaps and ensure small mistakes won’t push a company out of compliance.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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