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Just like any business, when the government needs certain products or services that wouldn’t be feasible for it to produce on its own, it contracts with outside vendors (private companies) for procurement of those goods and services. The United States government is the single largest procurer of goods and services in the world. Within the vast network of the federal government, the Department of Defense accounts for a significant portion of federal acquisitions. Two of the nation’s largest defense contractors, Lockheed Martin and Northrop Grumman, accounted for over $50 billion dollars in government contracts in 2009. Unlike commercial contracts, federal government contracts and even the contracting process itself are subject to significant statutory regulation.
It may surprise the average American how many products and services are contracted for by the U.S. government. Most, if not all, of the weaponry, equipment, and gear used by our armed forces were made by private corporations. For instance, many of the fighter jets and stealth bombers utilized by the military were built the Northrup Grumman Corporation. A contemporary, albeit fictional, example comes from the movie, Iron Man. Tony Stark’s company, Stark Industries, which built smart missiles and other weapons of destruction, is a government contractor in the defense industry.
Each year, a sizeable portion of federal contracts are awarded to small or disadvantaged businesses. There are numerous online resources to help businesses prepare for federal contracting. USA.gov, a website run by the federal government, offers advice, help, and the steps needed for your business to be government contracting ready. FedBizOpps.gov is a database run by the General Services Administration, an independent federal agency, designed to help small businesses find federal contract opportunities and bid on federal contracts.
In addition to contracts at the federal level, each subsequent level of government, including state and municipal, is broadly within its authority to make contracts with private businesses for the purpose of procuring necessary products and services. For example, a municipality may contract the services of a construction company to renovate city hall.
There is significant regulation in the area of government contracts, especially at the federal level. Federal contracting is subject to regulation both in terms of the contract itself and even the process of federal contracting. There are numerous statutory regulations governing the federal government’s contracts with private parties. In addition to federal statutory regulation, general contracts law also applies. Therefore, within the legal profession, there is an entire practice area dedicated to government contracts law.
Compared to legal contracts between two private entities, government contracting is considerably more complex a process with greater regulatory obstacles. Government contracts lawyers help their clients with the entire spectrum of government contracting issues at every stage of the procurement process beginning with proposal preparation. When a dispute occurs between the government and a contracting party, government contracts lawyers can also assist the contracting party in contract claim resolution.
If your company or business intends to bid on a government contract, it may be in your best interest to enlist the services of a government contracts lawyer. Government contracts at the federal level can be extraordinarily lucrative. The federal government’s intended goal every year is to set aside at least a certain percentage of contracts to go to small businesses. Your small business will likely have a greater chance of winning a government contract bid if you hire a government contracts lawyer. This lawyer can also guide you through all the regulatory hurdles and procedural requirements. Depending on your business needs, hiring a government contracts lawyer may be an expense worth making.