First Commandment of Government Contractors: Thou shalt do thy homework

by Thompson Coburn LLP

(This article is part of a 10-part series for the blog of Public Contracting Institute called, “A Government Contractor’s Ten Commandments.”)

Because of the complexity of the Government’s procurements, the dollar amounts involved, and the chaos that unfortunately governs a contractor’s life, smart executives develop habits and rules by which they survive. One of those rules echoes the Boy Scout motto: Be prepared. In other words, do your homework.

Regardless of where you are in the procurement cycle, you must prepare in advance for what is about to happen. In the solicitation stage, your team must familiarize itself with the potential customer: Understand its culture, its modus operandi, and its peculiarities. For example, one might assume that all Navy offices conduct business in the same way; however, the Naval Air Systems Command and the Naval Sea Systems Command operate very differently. If you don’t keep that in mind, you could find yourself on the outside looking in because of your failure to adapt to the customer.

With respect to the solicitation itself, if the issuance of the solicitation is the first time you have heard about the procurement, you are already behind your competitors. Agencies are making frequent use of draft solicitations or Requests for Information, and by missing out on those you might have already missed an opportunity to enhance your chances of winning the contract. Once the actual solicitation is issued, you and your team must review it carefully and thoroughly to ensure that you understand it. If you have questions, they must be submitted by the prescribed deadline for questions, and certainly no later than the proposal submission date. Finally, all Government solicitations and contracts are fraught with deadlines, and someone on your team must be riding herd to avoid missing a deadline; it only takes one miss to knock you out.

Educate your team
Once you have been awarded a contract, the very first step is to educate the team that is responsible for contract performance. Many companies have a practice of using one team to chase the business and an entirely different group of people to perform the contract. If you don’t educate that team on precisely what is in store for them, you will be looking down the barrel of a contract claim.

If you are a newcomer to Government contracting, your team needs to be schooled in the very basics of the business — contract type and its importance; the scope of work; the existence and roles of the contracting officer versus the contracting officer’s technical representative; other key customer personnel, schedules, reporting; and possible trouble spots. You will also have to educate the team on that peculiar Government contract clause entitled “Changes,” how that could come into play during contract performance, and how changes are recognized. Finally, your team must completely understand the vital role that documentation will play during contract performance — more on that in the Fifth Commandment. Experienced Government contractors don’t need to start with some of the very basic concepts listed above (such as “What is a Contracting Officer?”), but they should nonetheless make sure their team is aware of what lies ahead.

Preparing for a negotiation
Over the course of a contract, situations can arise that will lead to negotiations between the parties. For a contractor, these can be unsettling. Most people are uncomfortable taking a position that is adverse to the customer’s position, but this is a fact of life in Government contracting. In fact, this type of negotiation, when conducted properly, is an opportunity to enhance — not harm — your relationship with your customer. In this setting, begin preparing by ensuring you have all the facts. Everything starts with the facts, and it is risky to move past this point without nailing them down. In addition to gathering all of the relevant documents and interviewing the correct people, the fact-gathering process should incorporate two key questions. First, what does the contract say? Second, what do the applicable regulations say? This is not always an easy process, particularly if people are working in different locations, but once it is completed your strategy should begin to take shape.

In preparing for the negotiation, your main challenge will not be that the Government representatives know more about the regulations than you do. In fact, that is not always the case — and it really doesn’t matter. Your challenge is to make sure that you know the relevant regulations and the case law. You may need to include your lawyers in this process. If you prepare in this way, you will be ready regardless of the knowledge level of your opponent.

If you find cases or articles that support your position, always bring them to the negotiation and provide copies to your customer. Remember that your goal is to persuade your customer that your position is valid. She will then need to seek approval from management; help her make her case.

Finally, it is naïve to think that your customer will agree to everything you request; therefore, never begin a negotiation without having a backup plan or plans. The ability to move to Plan B could prove invaluable. Without it, you have no flexibility, which, as any experienced dealmaker can tell you, is critical for a truly successful negotiation.

Going about your business in this way takes time and effort, but the dividends will be significant. You simply cannot afford to go into every stage of the contracting process “playing things by ear.” Your opponents and your competitors are likely not taking that approach. And if they are, your well-prepared team will have a major advantage. There is simply no substitute for doing your homework.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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