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A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.
By Jeffrey W. Sneddon, Wyoming Procurement Technical Assistance Center procurement specialist
“What are some of the differences between government and commercial contract work?” Jason, Saratoga
The Federal Acquisition Regulation (FAR) contains the uniform policies and procedures for contracts awarded by federal agencies. The regulatory authority for FAR is found in Chapter 1 of Title 48 of the Code of Federal Regulations (CFR). In addition, federal procurement procedures are established by executive orders of the president, Office of Management and Budget (OMB) circulars, Office of Procurement Policy (OFPP) policy letters, and decisions by courts.
In contrast, the Uniform Commercial Code (UCC) and common law govern contracts between two commercial entities. The UCC is designed to protect the buyer and seller equally.
The FAR favors the government and taxpayer. This is because the government is acting not on its own behalf, but on behalf of the public, with public funds and public interests at stake.
There are significant differences between the FAR and UCC. Prospective government contractors need to be aware of the applicable regulations before getting involved in the process.
Some areas unique to government contracts, which require specific attention, include acquisition methods; standard terms and conditions; treatment of costs/pricing of contracts; ethical responsibilities; socio-economic obligations; commercial item acquisitions; the government contract disputes process; government authority; and contract monitoring.
Contracting with the federal government is a lucrative endeavor. It is hard to ignore the potential volume of business available. But it is important to acknowledge the significant differences between government and commercial work, and avoid any pitfalls which may arise.
A blog version of this article and an opportunity to post comments is available at http://www.wyomingentrepreneur.typepad.com/blog/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email firstname.lastname@example.org or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.