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Contracting Regulations for Small Businesses
Expanding your business into the federal marketplace can be lucrative, and provide numerous networking and growth opportunities. But be warned: Winning a federal contract also means complying with laws and regulations unique to those doing business with the government. Many new contractors, especially small businesses, are unprepared for the rules and regulations they must follow, which can lead to costly errors and potential legal problems. The resources below will help you become familiar with the regulations that apply to most federal contractors.
The Federal Acquisition Regulation (FAR) is a substantial and complex set of rules governing the federal government's purchasing process. Its purpose is to ensure purchasing procedures are standard and consistent, and conducted in a fair and impartial manner. So whether you are a small business owner or the contracting official, it is important to understand FAR. There are many costly pitfalls if you don't take the time to understand the provisions in your contract, which often reference areas of the FAR.
The FAR is issued and maintained jointly under the statutory authorities granted to the Secretary of Defense, Administrator of General Services and the Administrator, National Aeronautics and Space Administration. Statutory authorities to issue and revise the FAR have been delegated to the Procurement Executives in DoD, GSA and NASA.
Government contracts are different from commercial contracts in many important ways. Federal contracts contain or reference many provisions unique to the government. These provisions include requirements for:
- Changing the scope of work
- Terminating contracts
- Making payments
- Conducting inspection, testing, and acceptance of delivered goods and services
If you are new to government contracting, consult the following resources to help familiarize yourself with the FAR provisions in a typical contract:
Guide to the terms and conditions unique to federal contracts after they have been awarded.
An online training course offered by SBA that includes information on FAR provisions.
Offers information and workshops for small businesses interested in obtaining GSA Schedule contracts.
Offers advice and training to help small business obtain contracts and comply with the FAR.
Helps small businesses meet their requirements to receive government contracts.
Introduction to the basics of defense contracting for small businesses.
The FAR applies to all agencies in the Executive Branch. The Legislative and Judicial branches are not required to comply with the FAR, but tend to follow it in spirit and content. In addition, Executive Branch agencies issue supplemental regulations that include purchasing rules unique to these agencies.
If you plan to bid on a contract within a specific agency, contact SBA's Office of Government Contracting for assistance in understanding specific agency requirements.
More Resources for Learning about FAR
It is always a good idea to understand the references to the FAR for the contract, so you can understand your specific obligations.
The following resources are good references to bookmark:
- Subchapter D of the FAR includes the details of the application of certain labor, OSHA, environmental, and other socioeconomic regulations that apply to government contracts.
Title 13 Code of Federal Regulations (CFR)
The Code of Federal Regulations (CFR) is a public record of all permanent rules and regulations published by the executive departments and federal agencies of the U.S. government.
The code is broken up into 50 titles that cover a broad range of topics subject to federal regulation.
Title 13 of the CFR deals with business credit and assistance and governs the SBA.
Part 125 of Title 13 covers contracting opportunities for small businesses.
We recommend you skim through this section and familiarize yourself with the contracting process if you're interested in doing business with the government. You can find the full text of Title 13, Part 125 here.