GovCon Compliance Basics: An Overview (1 of 6)

Key Details: Navigating the compliance maze in the government contracting industry can be a daunting task. Understanding the fundamental compliance requirements is essential for any government contractor looking to succeed in this highly regulated industry.  

In this 6-part series, we break down some of the most critical compliance areas that every government contractor should be aware of. This article series covers the following topics:  

• General compliance considerations. 
• Accounting system compliance. 
• DCAA and SF 1408 compliance. 
• Payroll and timekeeping compliance. 
• Labor law compliance. 
• Other compliance considerations.

Every government contractor’s compliance requirement may vary significantly depending on their company size, the nature of contracts, and the specific government agencies they work with. As such, it is critical to consult with a trusted advisor to understand the requirements specific to your company. Note that the items included in this article are not wholly exhaustive but intended to be used as a guide as you build your compliance program.  

At Ryan & Wetmore, we work closely with contractors to ensure they meet relevant requirements and avoid potential pitfalls. To assist in this process, we offer a detailed compliance questionnaire designed to help you assess your unique compliance needs. Speak with a Ryan & Wetmore advisor today to learn more.  

General Compliance Considerations 

Ryan & Wetmore’s general compliance section of the compliance questionnaire encompasses a wide range of responsibilities and requirements that contractors must manage to ensure they meet federal regulations and contractual obligations. The following list is not exhaustive; contact Ryan & Wetmore for a more exhaustive list. 

• Establish key company roles and responsibilities surrounding compliance and security. 
• Appoint a compliance officer to oversee compliance with legal and regulatory requirements such as those outlined in the Federal Acquisition Regulation (FAR).
• Assign a security officer to oversee safeguarding critical or sensitive information. This also includes providing employees with regular security training. 
• Ensure that appropriate individuals are assigned to manage contractual responsibilities such as: 
• Funding limit notifications as outlined in applicable contracts. 
• Monitoring of contract vehicles or schedules. 
• Development and implementation of a company compliance program. 
• Review contract types and any set-aside designations to maintain compliance. 
• For example, if the Company is part of the Small Business Administration’s (SBA) 8(a) Business Development Program, ensure annual compliance with net worth, adjusted gross income, and total assets. 
• If the company performs on cost-plus contract types, ensure the Allowable Cost and Payment FAR Clause 52.216-7 is followed, which requires an incurred cost submission.   
• Assess your contract risk management process by creating a contract matrix that identifies risk based on contract type. This should include contract provisions such as FAR clauses and other government-mandated requirements. 
• Develop a code of business ethics and conduct aligned with FAR 52.203-13 and provide employees with regular ethics and conflict of interest training.
• Ensure thorough background checks are conducted on all employees before they are assigned to government contracts, particularly those requiring security clearances or access to sensitive information.
• Ensure that the proper subcontracting procedures are followed. This includes ensuring flow-down requirements are met under FAR 52.203-13.
• Other general compliance considerations to review:
• Review your record-keeping procedures and ensure documents are retained in a safe location.
• If government property is used during contract performance, ensure compliance with regulations governing tracking, reporting, and usage.
• Review the security clearances that the company or employees currently hold. Ensure they are current, and relevant documents are saved in a secure location. 
• Review your record-keeping procedures and ensure documents are retained in a safe location. Be sure to review the record retention requirements outlined in FAR Subpart 4.7 to ensure compliance.

Conclusion and Action Plan 

Navigating the complexities of government contracting requires a rigorous and proactive approach. From adhering to FAR requirements and ensuring proper accounting practices to maintaining ethical standards and labor law compliance, government contractors must remain vigilant in meeting all federal requirements.  

To learn more about your compliance requirements or to discuss our compliance questionnaire, contact Ryan & Wetmore today.