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MDJohn

Guide for when small business becomes large

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XYZ, Inc., has been a small co working as a government contractor. However, it has grown and is now other than small. Suddenly, it must begin complying with all the requirements of a non-small government contractor. For example, rather than be a participant in a small business subcotnracting plan of a large company, XYZ, Inc. must adopt a small business subcontracting plan.

I would appreciate it if someone could point me toward a guide, if one exists, for such situation. If none exists, then I guess a guide to complying with government contracting rules and regulations, generally, would be the next best source.

Thanks,

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Feldman, Government Contract Guidebook, 4th, 2011-2012 ed. (West 2011).

Keyes, Government Contracts Under the Federal Acquisition Regulation, 3d ed. (West 2011).

Seyforth Shaw LLP, The Government Contract Compliance Handbook, 4th ed. (West 2011).

Visit: http://store.westlaw.com/default.aspx, click on Shop Practice Areas, then click on Government Contracts.

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If XYZ, Inc. is just now starting to think about "complying with government contract rules and regulations," it may have a problem. It's been subject to most of them all along. There are only a few things (e.g., Cost Accounting Standards, small business subcontracting plan requirements) that a small business is exempt from.

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To outsidelegalguy: understood. XYZ has been in compliance. It's the short list of thing, such as you mentioned, that it needs to focus on. Thanks.

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Welcome to limbo.

You no longer have small business preferences, and you probably don't have the economies of scale enjoyed by really large businesses. Although there's more lip service than in the past, there is no meaningful legislative effort to balance the playing field for midsized businesses, largely due to trade agreement prohibitions. There's no effective lobby. You may have difficulty locating small businesses of the right category to supply your subcontracting needs at cost-effective prices. If you're in a service industry, you will probably be training your small business subcontractors to compete with you directly in the future.

You need a plan.

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MDJohn,

I have helped several companies with the issue(s) you describe. I can tell you from experience that the real issue is linked to culture and to leadership. Reading books is not going to address those.

Start with current contracts and develop a list of compliance requirements. Prioritize them and start working. If you have a cost-type contract, you may already have CAS issues with which to deal. You may or may not have Business Systems to implement.

Get with your business development folks and see what work is on the horizon. Try to think about what compliance requirements might flow from the new work and be proactive.

But -- most importantly -- make sure your management is aware of the requirements and has budgeted the necessary investments in order to be compliant. The biggest obstacle to compliance is "we don't have enough funds to do it right."

Hope this helps.

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