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GSA Processors says understanding federal contracts key to success

In the highly competitive federal marketplace, GSA Processors knows that individuals and small businesses can easily become overwhelmed. If they want to remain viable candidates for federal contracts, individuals and small businesses must thoroughly understand the contractual obligations they are committing to.

While the government contracting process can be daunting for these entities, GSA Processors can help them make it a more efficient and rewarding experience. When it comes to signing a federal contract, expert advice can save companies time, money and possibly their reputation.

“Understanding federal contracts before signing them is paramount to the successful completion of the agreement especially since contracts are often negotiated over many sessions and the final agreement can vary from the original expectation of the business,” GSA processors said.

Slow Down

There is no substitute for taking the required time to thoroughly read and understand the contents of any contract. The document is a legally binding agreement between purchaser and vendor and without knowing what is in the document, the probability for misunderstandings increases.

Jack Garson is a business law expert and the founder of the law firm Garson Claxton LLC. In an article for titled Read the Contract: I Rushed, I Signed, I Regretted, Garson contends it is not uncommon for people to not read their contracts. In fact, it is a common occurrence.

“Every day, all across the country thousands of businesses put their companies in jeopardy when they rush to sign contracts,” he said. “They don't read them, they don't understand them and they are not prepared for the consequences.”

Legal Consequences

Contracts with the federal government carry an additional responsibility to the vendor. The U.S. Small Business Administration says on its website, “If your contract is terminated for default, you are entitled only to payment, at the contract's price, for items accepted by the government.”

Further and more distressing to a business, it says, “If the government still needs the items that you failed to deliver, it has the right to procure the same items elsewhere and, if they cost more, charge the excess costs to you.”

Reputation Damage

“Financial damages aside, the harm to the reputation of a business can be even greater,” the professionals at GSA Processors said.

If a federal contract is terminated for any reason that can be proved to be the fault of the vendor, acquiring future contracts can be problematic. For a company that relies on the income from these contracts, something as basic as failing to read and understand the terms can be disastrous.

Further, the government representatives may feel that a company’s inability to comprehend the terms of the agreement makes them unsuitable for future work. Rushing to sign the agreement without fully understanding what is required is does not reflect well on the enterprise. GSA Processors recommends that you take your time.

Standard “Boilerplate” Agreements

Most contracts contain standard terms and conditions that are often referred to as a boilerplate. With experience, contract terms and conditions will become more familiar and the process will seem less arduous. Despite the use of boilerplate sections, each contract is different. They need to be read and understood.

If a company has done business with the federal government in the past, there might be an inclination to assume any new contract contains the same term and conditions. While some of the content may indeed be boilerplate, the specific contents of the document will not be standard. Never assume, always read.

Contract Changes

Many government contracts contain a section allowing the designated contract official to unilaterally order changes to the specifications and other contract terms. The changes, if required, will generally fall within the scope of the contract. As the vendor, a company is obligated to perform the changes. Pay special attention whenever unilateral is including in the wording.

By understanding the terms of the contract, a company will be more able to adapt to these changes. GSA Processors warned that ignorance of the scope of work is not an excuse that can be used if changes are required. A careful reading of the document will provide the business with an idea as to any potential problems that a change may incur for the company.

In order to keep the vendor and supplier relationship healthy, start by thoroughly understanding the exact terms of the new relationship. Receiving a government contract can be one of the most rewarding times for a business. GSA Processors hopes that by carefully reading the documents, the work can proceed smoothly for both parties of the agreement.

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