Confused about the government contracting process?

Here are helpful answers to some of the most frequently asked questions.   

Can I work with an independent contractor without a business entity?

Organizations often wonder whether it’s appropriate to include a 1099/consultant (without being an LLC or incorporated) using a Social Security number for small business subcontract reporting in the System for Award Management (SAM). And the answer is, somewhat unhelpfully, that it depends.

If the consultant is an independent contractor and can obtain a Dun & Bradstreet number, registers in SAM, and follows the regulations to register as a small disadvantaged business, then, maybe. The independent contractor must take several other steps as well, which is why we recommend working with an expert to help you sort through these details. But know that if the consultant has not followed all of these requirements, it will be up to the Small Business Administration's discretion to determine compliance, if your company is audited.

How can I determine whether my organization is a small business?

To be considered eligible to bid on small business set-aside opportunities for the government, you must adhere to the industry size standards set by the Small Business Administration for the North American Industry Classification System (NAICS) code. Each solicitation is issued under a specific NAICS code. These codes are reviewed every five years and then are updated in accordance with economic conditions. You’ll need to register your business as a government contractor in the SAM and self-certify your business as small. For some of the other disadvantage-based certifications, a more formal process is required.

Does the Federal Acquisition Regulation specify whether companies can keep electronic employment files versus paper files?

The Federal Acquisition Regulation’s direction on this says, in part, that original records don’t need to be maintained or produced in an audit if the contractor or subcontractor can provide electronic images of the records, and if they meet the following additional requirements:

  • The contractor or subcontractor has established procedures to ensure that the imaging process preserves accurate images of the original records, including signatures and other written or graphic images, and that the imaging process is reliable and secure so as to maintain the integrity of the records.

  • The contractor or subcontractor maintains an effective indexing system to permit timely and convenient access to the imaged records.

  • The contractor or subcontractor retains the original records for a minimum of one year after imaging to permit periodic validation of the imaging systems.

Given that these regulations for working with the government are so specific, we recommend that all small businesses interested in these types of contracts talk with an expert to ensure compliance. If this sounds like your business, contact us today to learn more.