Though securing a good government contract may be a big windfall to your small business, the process of fulfilling the order is inherently fraught with pitfalls and obstacles. Government contractors of all sizes and industries generally face a number of risks throughout the term of the contract. For smaller, resource-strapped contractors, however, those risks are magnified. For this reason it is strongly recommended that you go into the process prepared.   

Government contracting can be a way to tap into a growing market and jump start your small business. Last year the Small Business Administration (SBA) announced that the federal government awarded almost $133 billion in prime federal contract dollars to small businesses. This represents an over $12 billion increase from the previous fiscal year. Another promising trend to note is the growing presence of women-owned small business contractors.  

Successfully filling a government contract, however, requires a very high level of regulatory compliance, quality assurance, and general oversight. Simultaneously, government agencies are intensifying their efforts to uncover instances of fraud, waste, and abuse in government contracting. To that end, a number of government agents will be closely monitoring your performance and reporting throughout the life of the contract. Misrepresenting any part of the order fulfillment and delivery process –from the initial proposal to the final invoice– can trigger an investigation. Engaging in one of a broad range of suspicious activities can also illicit this unwanted attention.  

If it is believed that the misrepresentation or behavior was done intentionally, then your company can be banned from bidding for future government contracts and members of the business can be criminally prosecuted. 

Government contractors are also required to conduct their own internal investigations, however, via a team of experienced law professionals. These professionals are then able to advise the company of the issues they face, serve as the company’s legal defense team, and discuss some possible paths forward. 

The point of this article is not to scare you away from government contracting. It’s to tell you how to get prepared for it. The bar is being set very high for compliance requirements, and it is only getting harder to clear as time goes by. But, if you have the right legal team behind you, half of the battle will be won already.

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