Government Contracts

Our federal government really likes to spend billions of dollars every year, often I hear people complain about its uncontrollable spending habits and the politics associated with it. You won’t hear me complaining because I like getting work from the government! Once you get all the red tape taken care of it’s very easy work and the pay is not too shabby either.

Business owners and managers of firms who have yet to capitalize on this steady stream of revenue might consider that now’s a good time to jump on the bandwagon. Why not? The economy sucks, no one’s buying anything, but the government is!

So now you’re in a meeting and the sales team is talking about all the revenues that the company could realize if they start getting government bids. With all the charisma and good news, do you dare to start talking about expenses?

There are major employment compliance costs associated with becoming a government contractor, therefore it is up to the HR and legal team to be informed so owners and executives can make proper decisions that take all costs into consideration.

It is critical to realize that the costs associated with obeying regulatory obligations are: contingent upon the size of the company, the extent and intricacy of its hiring processes, the aggregate of applicant, promotion, and termination activity, and the complexity of HR information systems.

Compliance as a federal contractor in the first year is extremely expensive, therefore the following costs need to be considered: Training payroll clerks on any existing wage rate issues, reconfiguring IT to account for additional fields that the Office of Federal Contract Compliance Programs (OFCCP) requires, analyzing job-application forms to make sure the firm is soliciting the race and gender of Internet applicants, putting into practice and publishing new policies e.g. Drug-Free Workplace Act and commitment to nondiscrimination and affirmative action, organizing annual affirmative action plans, training HR on recordkeeping responsibilities in accordance with OFCCP regulations—and the list goes on! Then with all the new piles of paperwork you’ll likely need more employees in HR to manage it.

Never rely on your sales team to read the fine print on the contract. Let’s face it; the folks in sales only have the ability to sell more products and services to Uncle Sam. As an HR professional who’s looking out for your firm’s bester interest, it’s valuable to realize that there are indeed some major benefits related to procuring government contracts, but compliance costs are real, so comply to the hilt or don’t submit that bid.