Federal vs Commercial Contracting; Is There A Difference?

Many commercial contractors have recently had to face the hard truth that there is not enough work out there to go around. Some have closed their doors, others have tried to find ways to diversify the services they offer in other markets. One of the markets that is still thriving is the federal market, but many shy away from doing work for the Government because of the many horror stories they have heard.

Is federal contracting that much different than commercial? The answer is both yes and no. As in any project, the rules change depending on the environment set by the Owner. The rules for doing school work are different from the rules for building churches. The rules for building private offices are different from the rules for building hospitals. In each situation, different types of construction produce different rules that have to be followed. It is the same in federal contracting.

One of the things you can count on in federal construction is that YOU WILL follow the rules. Where you might be able to freely substitute materials and systems on commercial work you better not go into a federal contract thinking that you are going to get by with anything less than what is called for. You will be held accountable for everything in the Contract Documents whether you picked it up or not.

Are there more rules to follow in federal work? Possibly. One of the most stringent projects in regards to rules that I have been involved with was in the building of the Dallas Cowboy's Stadium in Arlington, Texas. Our company had a very small contract compared to the overall scope of this billion dollar project. However the rules just for being able to walk onto the jobsite were like nothing we had ever seen in our years of doing work for the Government. Insurance requirements were much more stringent, safety requirements were above and beyond what we were used to (and we were used to complying with the Corps of Engineers Safety and Health Manual), and payroll reporting was ever bit as thorough as any federal job. So in comparison to this particular project are there more rules on federal jobs? The answer would be, No.

Now the stadium project is an exception. On most commercial work the paperwork, safety, insurance, etc. pretty much follow standard criteria. But, if you have never dealt with payroll reporting, cost loaded CPM scheduling that becomes your basis for payment, safety regulations out the wazoo, and submittal registers that include certifications on every bolt and screw country of origin, then you are in for a shock. And if you haven't allowed for these little nuances in you bid, you may end up spending a lot of your general conditions just in chasing down paperwork.

Then there are the Government Inspectors. Depending on the size of the contract, most project will have a team of Inspectors. Will they be tough? Are they sticklers for making you comply with every aspect of the Contract Docs? Well, in a word...Yes. That's their job. If you don't like it, if you try to get by with not following the Docs, it will not be a pleasant experience. Do you have to stand your ground when you are following the Docs and they are incorrectly interpreting something? Absolutely! The trick is in knowing what battles to fight and when to keep your mouth shut and do the work. It will always be a love/hate relationship, but we have been doing business with some of the same Government Agencies and Inspectors for many years and, even though we have come to blows on many occasions, they still give us favorable performance ratings because we have done them a good job, complied with the Docs, and have never left them out to dry.

Lastly there are the staff requirements that, if missed in your general conditions, will come back to haunt you. Qulaity Control Managers, Quality Control Team, Safety Manager, etc. are but a few of the stipulated personnel that will be required on any given federal project.

Bottom line, there are significant differences between federal and commercial work. Some contractors learn these differences the hard way and end up losing money on their first few Government contracts. Or, they do one project and have such a bad experience, they just give it up.

Want to avoid the many pitfalls that may await your venture into the federal sector? Are you a minority contractor trying to get established in the U.S. Government contracting world? If so, we can help.

Go to our website: http://www.advan-con.net/