How strategic controls fuel growth in government contracting

Contractors must implement compliant and robust controls to succeed in the competitive government contracting landscape.

Over the past several years, the government contracting regulatory environment has changed substantially. Not only are contractors subject to government-specific business system requirements, but they also are being held to increasingly higher standards of compliance. Meanwhile, internal and external stakeholders continue to seek cost savings. While the government does not mandate the use of specific software systems or applications, contractors are expected to have fundamental processes and controls in place to meet specific contract business system requirements.

In addition to the DFARS business system requirements, contractors are expected to have internal controls in place to address the unique requirements of government contracting. These controls should govern the entire lifecycle of a government contract, from making a bid/no-bid decision to contract closeout. While a standard commercial financial control framework will address many of the financial aspects of accounting for government contracts, it will not address the risks and controls that stem from the additional statutory and regulatory requirements related to the pricing, administration and accounting of government contracts.

It is important to have approved business systems in order to increase award eligibility, process efficiencies and trust from the government customer. Disapproved business systems could subject the business to payment withholds and ineligibility to submit bids, which may impact cash flow and lead to a damaged reputation.

Efrain Gutierrez, John Gault and Blake McKelvy also contributed to this article.