Understanding Government Contracting

A few folks had asked for a primer dealing with Registration with DUNS and SAM.  This will hopefully explain a somewhat complicated process.

Your first step in selling to the government is to notify the government of your existence via the System for Award Management, or SAM. Under normal circumstances, the government refuses to award contracts to an unregistered business.

Registration requires possession of a Data Universal Numbering System (DUNS) number from Dun & Bradstreet. A DUNS number is a unique nine-digit number for each physical location of your business. If you have legally distinct divisions located in the same place, each division requires its own DUNS. Obtaining a DUNS number is free for government contractors, and Dun & Bradstreet will assign one within minutes via a dedicated toll-free number (866-705-5711) or within a day through a web form.

During registration, you’ll be asked to describe your business. Not in words, and not just once, but through a plethora of numbered classification systems.

The most important, and mandatory, set of classification codes is the North American Industry Classification System, or NAICS (pronounced nakes, as one syllable). NAICS numbers are six-digit codes that describe an economic activity with increasing specificity.

The entire six-digit number describes a particular industry, such as software publisher, which is NAICS 511210. The first two digits denote an economic sector, followed by a subsector, then an industry group, followed by the industry. The final digit is reserved in case any of the three governments using NAICS want to make a country-specific designation.

NAICS was created to organize and categorize economic activity for the purpose of facilitating statistical analysis, but acquisition policymakers latched onto the codes as a way of organizing and narrowing the bidding field by specifying that companies must have such-and-such NAICS in order to respond to a solicitation. Most companies, except the most specialized, qualify for more than one NAICS code.

Registration is just one step. Before attempting to start selling to the government, you need to understand how the federal IT market playing field is set and who you’ll encounter on it.

The Federal Acquisition Regulation (FAR) is a 53-part compilation of rules and advice. Part 52 is where all the contract clauses — the ingredients of every government contract action — appear. If you come across a federal contracting term you’re unfamiliar with, look at Part 2, which is where all the definitions are kept.

FAR is Chapter 1 of Title 48 of the Code of Federal Regulations, which governs everything the government can do. The only federal agency not bound by the FAR is the Federal Aviation Administration. Also exempt from the FAR are “quasi-governmental agencies,” including the U.S. Postal Service, the Federal Deposit Insurance Corporation and the Tennessee Valley Authority.

Unfortunately, the FAR is not the last word at most federal agencies. Federal departments pile on additional agency-specific supplements. The Defense Department has the Defense Federal Acquisition Regulation Supplement (DFARS), the General Services Administration has the GSA Acquisition Regulation (GSAR), and so on. The military services –along with the Defense Logistics Agency and U.S. Special Operations Command — layer on yet more regulations.

Contracting officers exist because other federal employees are mostly prohibited from buying anything worth more than the threshold of a micro-purchase.

Only contracting officers possess a certificate or “warrant” — explicit authority from the agency’s senior procurement executive that spells out to the dollar the value of contracts to which they can bind the federal government. Warrant size and scope increases with experience, education and seniority.

Only contracting officers can obligate the government to pay a bill. A commitment from any other federal employee about a new contractual relationship is vapor until an actual contracting officer ratifies it. In many cases, he or she even makes the final purchase decision.

Contracting officers don’t disappear once the contract is awarded. An administrative contracting officer (ACO) — almost always someone other than the pre-award contracting officer — signs contract modifications and handles oversight that can include approval authority over subcontractors.

Most companies also interact with contracting officer representatives (CORs), who are involved in planning big procurements and in monitoring vendor technical performance afterward. CORs can have influence over project management and the technology bought in support of a program.

Vendors often don’t deal directly with contracting officers, but rather with contracting specialists, who are far more numerous than the officers who supervise them. Specialists do most of the legwork.

We Provide DUNS and SAM Registration for US Citizens. If you are interested in Federal Contracting, feel free to reach out to me or if you are ready to begin the Process, simply select the Federal Contractor Package.


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