One of the best sources of revenue for small businesses – although they may not realize it – is the United States government itself. The United States government is the largest consumer in the world, and it purchases a portion of the goods and services that it needs to function from small businesses.
With the impact of the COVID-19 pandemic, small businesses have been looking for more contracts and the government offers reliable help. There are also programs designed to connect the government with small businesses owned by women, veterans, and disadvantaged workers. The United States government is serious about working with small businesses, and companies that are not looking into it are leaving money on the table.
Working with the government, however, means strictly following their regulations. Since the government is a sovereign agency, it retains the ability to revise the contract at any time, which is not an option in any commercial contracts. The Federal Acquisition Regulations alone contains over two thousand pages of different contracts and regulations that need to be followed. Appropriately, the main focus of procuring a government contract is ensuring that your small business complies with all of its regulations.
Small businesses working with the government must comply with all federal and standard labor statutes, such as the Safety Standards Act, Contract Work Hours, the Service Contract Act, and more. Federal hiring and employee standards also apply, and you may be asked to produce records of your hiring process to prove your compliance. There will be several additional provisions on your contract, protecting against conflicts of interest and officials benefitting from the contract in illicit means.
The contract also makes clear that the good or service you are selling must be your own. The small business is required to pay themselves for the labor of their half of the contract, as well as at least fifty percent of the production cost of the good or service itself. This is to ensure that large corporations do not set up small businesses to procure assistance from the government and funnel it back up to them.
For small businesses that accept government contracts but do not comply with their regulations, the consequences are not nice. Beyond mere termination of the contraction, failing to comply can lead to heavy fees and even criminal charges (since the government is involved directly,) These are not empty threats, either. Every year, hundreds of businesses are affected when government audits reveal that they are not complying with the regulations placed on them.
Contracting with the United States government means steady, ensured payments to your small business. In order to achieve them, there’s only one small thing: making sure your business is compliant. At Prae Venire, we provide high-quality corporate compliance and risk mitigation solutions to meet your specific needs. Contact Prae Venire today to get started on your journey to corporate compliance!