The Department of Defense (DoD) is the largest buyer in the federal marketplace, spending as much of 70% of all contracting dollars. While you might think that military contracting jobs are just for massive corporations that build planes and weapons systems, there are plenty of opportunities for other industries to provide goods and services for this agency. If you are considering bidding on DoD contracts, here are some facts you need to know.
- Security Clearance is Not Always Required
It might surprise you to learn that not all contracts with the DoD require a security clearance. Many contracting opportunities, especially those involving routine services, commercial products, or administrative support, are often unclassified and open to contractors without cleared status.
However, when a contract involves access to sensitive or classified information or perhaps involves providing services at a highly secure facility, security clearance does become a critical requirement for military contractors.
In these cases, your company may need a Facility Clearance (FCL) and Personal Clearance (PCLs). An FCL authorizes a business entity (not an individual) to access, store, and safeguard classified information at its location. A PCL provides clearance for individuals, allowing them to access classified information up to a specific level.
Typically, we recommend that new military contractors begin with unclassified contracts initially, because obtaining an FCL or a PCL is a lengthy and difficult process, requiring extensive background investigations, and you must be sponsored by a government agency or a cleared prime contractor to gain these clearances.
- Compliance Is Non-Negotiable
Contractors, in general, must follow rules known as Federal Acquisition Regulations (FARs). These are rules governing how the federal government buys its goods and services, such as how contracts are awarded, what clauses must be included in contracts, and rules about compliance.
With military contracting jobs, you also often are subject to additional regulations known as Defense Federal Acquisition Regulation Supplements, or DFARS. These include Dod-specific regulations and often come into play in situations where cybersecurity and data handling are required. As a contractor, you must comply with all applicable FARs and DFARS, or you will risk contract termination and possible exclusion from the entire federal marketplace.
- Audits Are Increasingly Common
All federal agencies expect their contractors to be in compliance with FARs as well as to document every aspect of a contract, including keeping detailed cost records and creating timekeeping systems. As a contractor, you need to create a system within your company to ensure that if you are audited, you can show compliance, costs, and anything else related to a government contract.
If you are audited, you may only have 30 days to prepare all of your documentation, which is why it is crucial that you are constantly maintaining records. It’s important to note that audits have become more frequent in the last few years, especially for certain types of businesses, such as those participating in the 8(a) Business Development program run by the Small Business Administration.
- Cybersecurity Requirements Are Increasing
While restrictions regarding classified information are obviously subject to tight security, if you end up handling any Controlled Unclassified Information (CUI), you likely will be held to strict security standards. CUI is sensitive government information that, while not classified, still needs safeguarding.
Basically, anything that could pose security, privacy, or operational risks is considered CUI. If you are handling any CUI, you likely will be required to follow NIST SP 800-171 regulations. This is a set of cybersecurity standards developed by the National Institute of Standards and Technology (NIST), as well as earning your Cybersecurity Maturity Model Certification (CMMC).
- Payments Can Be Slow
In the private sector, payments typically are handled fairly quickly, but government contracts include structured payment terms. Often, this is just 30 days, but it’s important to be aware that delays can occur. Compliance reviews, invoice errors, government shutdowns, and other factors can delay your payment. While the government always pays its bills, it’s important to be aware of potential delays and plan accordingly.
- Teaming Agreements Can Be A Great Entry Point
Getting started with government contracting jobs can be tricky. You have to learn about the types of government contracts, the bidding process, FARs, DFARS, and much more. For many contractors, teaming agreements can serve as an easier, faster way into the federal marketplace.
Teaming agreements are when two or more companies work together to fulfill the requirements of a single government contract. Often, this occurs when a prime contractor uses a subcontractor to handle part of a contract, but two entities can combine to form what is known as a Joint Venture (JV) and bid on contracts as a single entity. A JV can be a complicated process to start, but it can open the doors to larger contracts that a single company cannot fulfill on its own.
- SAM Registration Is Required
All federal contractors, whether they are bidding on FEMA disaster jobs, DoD contracts, or any other type of government contracts, must have an active registration in the System for Award Management, which is the U.S. government’s central database for contracting.
While the government charges no fee for SAM registration (or SAM renewal), the process can be extremely complicated and can take 10-12 hours to complete, and many business owners attempt the process, become frustrated, and give up on the idea of government contracting.
A better option is to simply hire a third-party SAM registration service, such as Federal Contractor Registry. We do charge a fee, but we are SAM experts and can complete your registration quickly and 100% accurately, so that you are eligible to bid on contracts as quickly as possible.
In addition to completing your SAM registration, we will help you attain your Unique Entity Identifier, or UEI number, as well as help you fulfil the SAM notarized letter requirement, both of which are fairly new requirements for federal contractors.
If you own a small business, you may be eligible for special Small Business Administration programs known as set-asides. The government sets aside a portion of all federal contracting jobs for small business owners, and programs including options for a Woman-Owned Small Business (WOSB), Service-Disabled Veteran-Owned Small Business (SDVOSB), and several other designations. Our team can determine which small business set aside best suits your business and help you sign up for that program.
Whether you hope to bid on military contracting jobs or other federal opportunities, SAM registration is the first step you have to take, and we can help. To get the process started, simply go to our homepage, click on the New Registration tab, and fill out our contact form. A member of our team will be in touch as quickly as possible to gather information and get started on the registration process.