Major Government Contract Laws You Should Know About

Knowing the laws surrounding government contracts is essential if you’re managing or working on government contracts. Before you make the wrong move, make sure you know all the key Acts that are involved with government contracting. Albo & Oblon, L.L.P. provides some helpful information on their website regarding government contract law, including the following summaries of major regulations that any government contractor or contract manager should know:

The Federal Acquisition Regulation (FAR) is found at Title 48 C.F.R. Chapter 1. The FAR provides most of the rules for government contracts and these rules often surprise those who have previously only dealt with the private sector. For example, the FAR permits the government to make certain unilateral changes to the contract. And, the FAR permits the government to audit the books of the private company.

The United Services Procurement Act of 1947 governs procurements made by the following agencies: The U.S. Department of Defense, The Department of the Army, The Department of the Navy, The Department of the Air Force, The Coast Guard, and The National Aeronautics and Space Administration.

The Competition in Contracting Act (CICA) is intended to increase full and fair competition in Government procurements. This law serves to restrict the Federal Government’s ability, except in limited circumstances, to procure goods and services by non-competitive means such as “sole source” or “set-aside” procurement awards.

Contracts Disputes Act (CDA) – The CDA creates a legal framework for resolving disputes between a contractor and a procuring agency relating to the performance of most government contacts. A dispute arising during the performance of a government contract between the contractor and the procuring agency often results in the contractor filing a claim against the agency. The procedure for such disputes requires the contractor to a request a final decision from the agency Contracting Officer. If the decision is not favorable to the contractor, the contractor may appeal the CO’s decision to the agency’s Board of Contract Appeals or to the U.S. Court of Federal Claims. 41 U.S.C. § 605(a).

The Procurement Integrity Act. The PIA prohibits the release of source selection and contractor bid or proposal information. Also, a former employee who served in certain positions on a procurement action or contract in excess of $10 million is barred for one year from receiving compensation as an employee or consultant from that contractor. 48 C.F.R. § 3.104-1-11.

Truth in Negotiations Act of 1962 (TINA) requires that, before contractors engage in price negotiations for negotiated contracts at over $500,000.00, they must disclose and certify their underlying cost and pricing data. Subcontractors are also subject to TINA if the prime contract is covered under the statute.

The Anti-Kickback Act prohibits contractors and subcontractors from soliciting, accepting, or attempting to solicit or accept any kickbacks from their subcontractors. This statute is intended to prevent a contractor or subcontractor to receive money in exchange for the award of a subcontract without going through a full and fair competitive process. The Act provides for both civil and criminal sanctions, depending on the nature of the violation.

Labor Statutes

The Davis-Bacon Act, 40 U.S.C. § 276a-2(a), establishes minimum wages for contractor laborers and mechanics working on government construction projects. The U.S. Department of Labor issues wage determinations reflecting current established wages and fringe benefits for various classes of laborers and mechanics. These wage determinations cannot be contracted around, so even if a government contract sets wages for such employees below the applicable wage determinations, a contractor, not the procuring agency, is ultimately responsible for compliance with the Act.

The Walsh-Healy Act, 41 U.S.C. § 351-58, requires contractors to pay their employees no less than the minimum wage prevailing in the locality on government service contracts. The Act prohibits contractors from assigning employees to hazardous or unsanitary working conditions and requires the contractor to post notices of the prevailing minimum wage were employees may see such notices. Penalties for noncompliance with the Act include withholding of contract funds, contract termination, and in extreme cases, debarment.

Fore more information on government contract law, visit the Albo & Oblon L.L.P. website.