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Government vs Commercial Contracting

Jul 06, 2012

The Federal Acquisition Regulation (FAR) contains the uniform policies and procedures for contracts awarded by federal agencies. The regulatory authority for FAR is found in Chapter 1 of Title 48 of the Code of Federal Regulations (CFR). In addition, federal procurement procedures are established by executive orders of the President, Office of Management and Budget (OMB) circulars, Office of Procurement Policy (OFPP) policy letters, and decisions by courts.


In contrast, the Uniform Commercial Code (UCC) and common law govern contracts between two commercial entities. The UCC is designed to protect the buyer and seller equally.


The FAR favors the government and taxpayer. This is because the government is acting not on its own behalf, but on behalf of the public, with public funds and public interests at stake.


There are significant differences between the FAR and UCC. Therefore, prospective government contractors need to be aware of the applicable regulations before getting involved in the process.


Some areas unique to government contracts, which require specific attention include:

Acquisition Methods

Standard Terms and Conditions

Treatment of Costs/Pricing of Contracts

Ethical Responsibilities

Socio-Economic Obligations

Commercial Item Acquisitions

The Government Contract Disputes Process

Government Authority

Contract Monitoring


Contracting with the federal government is a very lucrative endeavor. It is hard to ignore the potential volume of business available. But it is important to acknowledge the significant differences between government and commercial work and avoid any pitfalls which may arise.  


Jeff Sneddon


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