The Uniform Commercial Code and relevant state common laws govern the contract of any two private or commercial firms that enter into an agreement. As long as the contract does not violate laws and public policies, both parties can make contractual agreements as they wish.
Different rules and requirements apply, however, when it comes to doing business with the federal government, especially with the Department of Defense (DoD).
Here are some of the unique aspects of doing business with the DoD you should be aware of:
Unlike business with private firms, the DoD, under certain conditions, has the right to make changes to an existing contract. Even if you try to fulfill the terms stipulated in the agreement and invest money in the work, remember that the government reserves the right to revise provisions.
Fortunately, the DoD can only implement changes on mutual agreements. They do not make any revisions when it concerns the delivery schedule and pricing agreements.
Subject to Many Different Laws
Contracts with the government are always subject to laws that commercial contracts are not. Some of these include The Armed Services Procurement Act of 1947, the Federal Property and Administrative Services Act of 1949, and the Competition in Contracting Act. These and many other laws accommodate specific requirements. Some laws mandate a specific open bidding process, minimum wage standards, and the use of the Military Shipment Label (MSL).
Extensive Auditing by the Government
When you do business with the DoD, note that extensive auditing can be scheduled at any time. It is important to maintain certain records and furnish copies to the government whenever needed. You need to be extra careful with this, because if the audits reveal that you were not able to conform to agreements, the government may impose price adjustments and penalties.
When it comes to private contracts, on the other hand, auditing is not necessary.
Remember that unlike commercial enterprises, the government has certain rights when it comes to doing business—because the money they are spending comes from the taxpayers.
With the complexities of government contracting, Mil-Pac Technology can help simplify compliance with DoD requirements. Get in touch with us today and let’s get started.