Contracting With The DOD: 5 Things To Know

Contracting systems for government transactions are often complex, but none may compare to the Department of Defense (DoD) transactions.

While federal agencies may be complicated, have numerous requirements, and follow several processes for procurement, they’re often fixed. If you’ve been dealing with these offices for some time, you already know what to expect.

However, with DoD, every transaction may require different requirements, funding sources, types, proposal formats, and many other core elements. Businesses that have previously snagged a contract may have the edge.

Still, first-timers can understand the basics of DoD contracting for better success. Discover the things you have to know when dealing with this government agency.

  • Strengthening Business Security Is Critical

Of all the nuances in business requirements, security and Intellectual Property are possibly two of the most crucial.

Any transaction with the DoD becomes a target for potential security breaches, hence it’s considered a primordial consideration in every transaction.

The Defense Department has introduced the Cybersecurity Maturity Model Certification (CMMC) framework. This self-assessment system is the initial step in being awarded full compliance and covers all contractors in the defense industrial base (DIB).

This refers to a specific government’s assets deemed essential in creating weapons intended for the armed forces.

Contractors must fully comply with the requirements to become a preferred contractor, ensuring continuous dealings with DoD. Learn more here if you’re a new or would-be contractor.

  • Refer To The Contracting Cone

The Contracting Cone is a fan-like infographic that contractors and even the public can use to understand the basics of defense contracting methods.

In there, you can see multiple options for contracts and transaction types that a business may engage with the DoD. New contractors may refer to it to better craft a procurement contract.

This tool is often divided into two main classifications: Federal Acquisition Regulation (FAR) and Non-FAR. The former means that several pre-determined regulations apply to the contract.

Meanwhile, non-FAR means local statutes govern the business agreement. As such, they’re often more flexible than FAR transactions.

Non-FAR transactions are ideal for small businesses and startups that may not have enough resources to comply with the more prohibitive requirements set by FAR transactions.

  • Even Small Businesses Can Snag DoD Contracts

The Department of Defense (DoD) set up the Office of Small Business Programs (OSBP) to even out contracting opportunities to all business types. This agency facilitates improved dealings between the DoD and small businesses.

According to the OSBP website, eligible small businesses could get 23% of the total DoD contract spending in 2020. Of these, 45% were awarded to disadvantaged and women-owned firms.

Bloomberg Government data revealed that DoD contract spending increased to USD$445.5 billion in 2020, representing a 10% hike compared to the previous year.

Apart from women-owned entities, small businesses run by veterans who were disabled while on active service, small disadvantaged businesses, and those in historically underutilized business zones may be eligible for DoD contracting.

Business owners will have to approach the Small Business Administration (SBA) to kickstart the initial accreditation processes.

  • Study How To Increase Your Chances Of Success

Whether your business is working towards full compliance or has yet to start with the requirements, don’t forget to improve your business reputation online and offline to build your brand.

  • Choose your niche: DoD contracts can vary wildly, so check your business strengths and expertise even before thinking of submitting a proposal.
  • Work with SBA or OSBP: Federal agencies often have Federal Small Business Professionals to help small businesses access helpful resources. These professionals can guide small enterprises in looking for subcontracting opportunities.
  • Make your business stand out: Study the client (DoD) well and look for strategies to better market your services and expertise. Make sure your offerings align with what the client needs and address their specific pain points effectively.

Prepare For Auditing

Contractors must also be aware of the Defense Contract Audit Agency (DCAA), the entity tasked with auditing DoD contracts. This agency is mandated to ensure the government and taxpayers get the services, products, and protection they deserve.

The DCAA sets the guidelines applicable to contractors to prepare them for the auditing process. As expected, the process of auditing by DCAA is painstakingly thorough.

Besides business costs, the agency also audits timekeeping and other internal processes to ensure things are working based on the signed agreement.

The Bottom Line

There is no one-size-fits-all rule for achieving success at DoD contracting. But the points discussed earlier can help prepare your business for accreditation and recognition.

Armed with this knowledge, your business can have increased chances of successfully creating proposals, snagging contracts, and delivering the right products and services.

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