Doing Business With the Government With Reduced Risk

Entering into business with the U.S. Government provides companies, including those in the automotive industry, with the opportunity to expand their business base, with tremendous potential. Even with the current budget cuts and the evolving effects of sequestration, the U.S. Government continues to spend a significant amount of money each year procuring goods and services. In fact, federal procurement spending on goods and services is estimated to exceed $500 billion in fiscal year 2013. Moreover, the U.S. Government procures a wide variety of goods and services from contractors, ranging from typical government purchases such as weapons and aircraft, to what may be considered atypical purchases, such as advertising, consulting, and construction services as well as mundane goods, such as office supplies, clothing and food.

The concerns of companies who are wary of entering into the government marketplace, however, are well-founded. Government-unique auditing and accounting requirements, specifications and standards, and other requirements have dissuaded many commercial contractors from selling their goods and services to the federal government. What many commercial companies do not realize, however, is that due to acquisition reform in the 1990’s and the concept of commercial item contracting, the government can procure commercial supplies and services from contractors on terms and conditions that are very similar to commercial contracts, and the government’s definition of a commercial item is very broad.

For those commercial companies in the automotive industry that currently do business with the federal government, or are interested in diversifying by doing business with the federal government, the attached Practice Note explains the concept of commercial item contracting, its benefits and how contractors can exploit this aspect of procurement reform. It contains a discussion of:

Statutory reforms in the 1990’s that established commercial item contracting.
What qualifies as a commercial item.
Required contract clauses applicable to commercial item contracts.
Government specific requirements that still apply to commercial item contracts.
The differences between commercial item contracts and traditional government contracts.
Finding and responding to commercial item solicitations from the federal government.
The benefits and risks of commercial item contracting.

Government Contracts Reduced Risk Through Commercial Item Contracting

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.