It’s been a long road. Registration in SAM.gov. Applications for SBA certification(s), when you’re eligible. Capabilities Statements, researching historical awards, cold calls, and cold emails. Conferences, handshakes, and more calls and emails. After responding to Requests for Information (RFIs) and preparing submissions under Requests for Quote (RFQs) and/or Requests for Proposal (RFPs), you get your first WIN! You are now a Federal prime contractor!
Maybe it’s a small contract, or maybe not. But now that you have your foot in the door with your first win, don’t forget that performance is not only about the scope of work but also about compliance with Federal procurement policies AND reporting that compliance to the Contracting Officer and others. What you do before the contract award to pre-position your company for compliance with all those contract clauses is just as important to your overall success as a Federal contractor.
Let’s review where we find those in the solicitation – since again, you want to start your preparation BEFORE you win the contract, not after you start performance.
In the FedSubK Feature from January 2024, Finding Your Way Around a Federal Solicitation, and following the Uniform Contract Format (UCF), you’ll find clauses that you must comply with during performance in the following sections:
Section D, Packaging and Marking. Provides packaging, packing, preservation, and marking requirements, if any, specific to the agency or end user’s needs.
Section E, Inspection and Acceptance. Includes inspection, acceptance, quality assurance, and reliability requirements as outlined in FAR Subpart 46.2 Contract Quality Requirements. Other higher-level standards applicable to the work, such as International Organization for Standardization (ISO), American Society for Quality (ASQ)/American National Standards Institute (ANSI), National Institute of Standards and Technology (NIST), and others, will also be indicated.
Section F, Deliveries or performance. Specifies the requirements for time, place, and method of delivery or performance.
Section G, Contract Administration Data. Includes accounting and appropriation data (if not elsewhere included) and contract administration information like reporting requirements and invoicing instructions.
Section H, Special Contract Requirements. Includes special contract requirements that are not standard FAR clauses or those from a FAR supplement required to be included in other sections of the solicitation. Examples of special contract requirements are security, badging, facility access, task order award processes under multiple award contracts, key personnel requirements, and min/max order thresholds.
Section I, Contract Clauses. Houses standard FAR clauses and those required by agency FAR supplements as appropriate for the requirement, as required by law.
Section J, Attachments. Includes any applicable Department of Labor (DOL) wage determinations and for the Department of Defense (DoD), Data Item Descriptions (DIDs) and Contract Data Requirements Lists (CDRLs).
Remember all those representations, certifications, and other assertions you made in SAM.gov about your business? You know the ones. Is there a parent company that owns your business? What were your gross receipts? Well, a large majority of those provisions are represented by a corresponding clause in the resulting contract that requires compliance of some sort, too.
Some examples of compliance and reporting requirements that you’ll have as a Federal prime contractor are:
✅️ notifying employees of their rights under a Federal contract (i.e., EEO, whistle-blower, prevailing wages, etc.),
✅️ documenting and tracking costs from and the hours expended by employees covered under Service Contract Labor Standards (SCLS) for Service Contract Reporting,
✅️ assuring that new telecom doesn't include prohibited equipment,
✅️ explaining the Government TikTok ban to employees,
✅️ paying wages and fringe benefits in compliance with Department of Labor prevailing wages,
✅️ tracking limitations on subcontracting between the work you and your subs perform,
✅️ submitting employment reports on veterans,
✅️ acquiring energy efficient and green products under your contract,
✅️ complying with the Buy American Act,
✅️ using invoice formats and submission tools that make your head spin,
✅️ other agency-specific background, badging, security, cybersecurity, and reporting at a variety of intervals depending on agency requirements, and more.
If you are a GSA Schedule Holder, you can also add monthly / quarterly reporting on sales and Industrial Funding Fee (IFF) tracking, collection, and remittance to GSA and the effort can pile up fast. GSA has created a page that contains a list of post-award compliance requirements that can be found here.
If a little panic is starting to set in, now is the time to act. If you’ve already got a Federal contract and you’re not doing some of those things, you're well behind the power curve. If you are still waiting for that first contract, now is the time to have a plan for how to comply. Don't freak out. PLAN! NOW!
▶️ Read the solicitation and extract compliance requirements from the sections identified above.
▶️ Determine the resources you need to successfully comply and report in a timely manner.
▶️ Study similar solicitations and start building a Corporate Compliance Plan for Federal sector work BEFORE you win that first contract.
Some AI tools on the market now can take a solicitation and digest it down into a compliance matrix. If you subscribe to a tool or you are shopping around, ask if it can generate a post award compliance matrix. Other AI tools dump every “shall” and “must” statement into a table. That’s not helpful to anyone. (Check out FedSubK's checklist to assess your readiness for using AI tools for more things to ask yourself and at a demo.)
When it comes to compliance, another thing you must be aware of is that many of the clauses are required to flow down to subcontractors. Except for clauses that incorporate DOL wages, if a clause requires subcontractor compliance, it will state it in the last paragraph of the clause and indicate the reach of the clause requirements in terms of which tier of subcontractors and/or suppliers it applies to.
I’ve heard contractors over the years say, “We’ll thought we'd worry about it when it happened” or “Isn't that the subcontractor’s problem.” Don't think like that. Here are a couple real examples from my experience where that thinking was costly to the contractor.
Prime Contractor doesn’t monitor subcontractor timesheets and payroll against DOL Service Contract wage determination. A disgruntled subcontractor employee decided to call the local DOL office, who then called me as the Contracting Officer. A DOL wage survey and audit of payroll / timesheets was triggered to determine if wages paid were accurate and complete. After the review was over, the subcontractor had to pay additional wages in back pay to employees and change their method of payroll and procedures. The prime also had to pay a fine of $93,000 to the DOL for failing to ensure its subcontractor paid proper wages, fringe, and benefits. (Service Contract Act violation – 41 U.S.C § 6703 & 6704)
Prime Contractor gets a contract with the Department of Defense (DoD) under a solicitation that contains the DFARS Provision 552.204-7008 dictating compliance with certain cybersecurity requirements which, by submission of the proposal, the contractor agreed they were compliant. The resulting contract contained the DFARS clause 552.204-7012 to enforce such compliance. During performance it was found that the Prime failed to disclose non-compliance with the provision in their offer and their systems fail to meet the standards required. Had the Government known of the noncompliance prior to award it could have impacted the contract award decision. The person signing the offer (i.e., authorized official of the company) was liable for three times the Government’s damages plus a penalty for acting knowingly, even when there is no intent to defraud. (Civil False Claims Act violation - 31 U.S.C §§ 3729)
(In the same instance above, if the person liable was found to have made the representation with the intent to defraud the Government, then the violation could fall under the Criminal False Claims Act (18 U.S.C § 287). Not where you want to find yourself.)
Once you get a Federal contract award, you’re off to the races. But playing catch-up on compliance and reporting after award indicates a lack of readiness to the Contracting Officer when being considered for future work (which is one of the reasons that the Government asks about prior Federal experience and past performance to begin with). And that can create a negative image of your company and put a cloud over your current performance at a time when you need to most impress the Government.
My advice? Putting in the effort to think about post-award compliance before award will help you position your company for success from your first contract and for the long term. Think beyond the win.
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