5 Important Differences Between Federal Contracts and Commercial Contracts

If you manage your Federal Contracts the same as your Commercial Contracts then Beware

The terms and conditions of Federal Government Contracts are more complicated than 95% of commercial contracts.  A key differences is that many federal contracts are dictated by the rules and regulations listed in the Federal Acquisition Regulations (FAR).   If you have not seen the FAR before then check out this link to get an idea of the vast information it contains

http://farsite.hill.af.mil/

If you are more familiar with Commercial Contracts than Federal Contracts then there are several important differences that you should know.  

1 - Termination For Default

Your contract can be terminated for any of the following reasons.  1) Failure to make delivery within the time specified in the contract.  2) Failure to make progress.  3) Failure to perform any provisions of the contract.  

2 - Contract Modifications

Contract Officers can change specifications and other terms within the general scope of your contract without your consent.

3 - Payments

Although the government intends to make timely payment you can delay the process.  Each contract has its own invoicing instructions.  The more accurate your invoices the more quickly you will be paid.

4 - Specifications

A basic specification if provided for each federal contract.  Many contracts include requirements referenced in the FAR.  You are then bound to all the requirements of the federal specifications whether or not you are familiar with them.

5 - Inspection and Testing

The customer may inspect and test your product against the specification.  If it is rejected you may not receive payment.

Source: https://www.sba.gov/content/contract-responsibilities#Termination

 

So what can you do to ensure your compliance federal contracts?

  1. Delivery what the customer specified in the time specified. 
  2. Invoice in accordance with the contract terms.
  3. Keep track of your contract modifications and delivery on them.
  4. Keep track and comply with all FAR requirements.

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