One of the classic readings in contract management within the government is Richard D. Lieberman and Jason D. Morgan’s The 100 Worst Mistakes in Government Contracting. This book provides detailed account of the mistakes that government contractors should avoid at different stages of the government contract lifecycle.
While some people prefer to outline best practices, Lieberman and Morgan’s approach has proven to be quite effective. In this article, we will take an overview of the worst mistakes in government contracting, so you can make sure to avoid them.
Proposal Preparation and Submission
11% of the worst mistakes in government contracting happen before a contract is even signed. Non-conforming bids or non-compliant proposals are very negative because they not only prevent you from starting a relationship with governments but also jeopardize your ability to maintain one long-term. Lieberman and Morgan point out that contractors often don’t understand what the difference is between a quote and a bid or proposal, or how unilateral offers will lapse.
Contract Administration
By far the largest number of worst mistakes in government contracting happens under the contract administration category. This key area of contract management holds 35% of the mistakes. From the initial list of contract management mistakes, it becomes quite clear that a company must effectively store their documentation in order to avoid many of the mistakes made in government contracting.
For example, one mistake is following oral promises and directions that deviate from the contract language. With a paper-based contract management system, you would be at a disadvantage in trying to look up the specific contract clauses that a government official is trying to circumvent. Even worse, you may be at a disadvantage in verifying whether or not the official is authorized to provide directions. Feeling pressured to act quickly, you may then follow direction from an unauthorized official regarding obligations under a contract.
Other examples of common mistakes in government contracting are the failure to correctly identify and submit a claim for constructive change as well as defective specification. Keeping these mistakes and others in mind makes having a true contract management system with a library of the right clauses and specifications a definite necessity for an effective contract management solution.
Audits
Even though audits only account about 6% of the worst mistakes in government contracting, they are very serious. Consider this list from Lieberman and Morgan:
- Request in writing from a contracting officer before providing access to your records
- Letter or entrance briefing explicitly stating the scope of the audit
- Appointing a single point of contact with the auditors
- Allowing auditors access to employees other than for floor checks of timecards
- Auditors provide an exit briefing stating their findings
- Cooperating with an audit
Considering these mistakes, it becomes clear that you not only need a library of clauses and specifications for a government client but also a repository of documents related to that client. For example, an employee would benefit from having a sample request for accessing records in order to evaluate the legitimacy of an incoming request.
Takeaway
Proposals, contract administration and audits account for close to 50% of the worst mistakes in government contracting, according to Lieberman and Morgan. Using a contract management system like Contract Logix would allow your company to avoid them by preparing proposals and bids correctly, managing contracts efficiently and complying with audits effectively.
If you are interested in learning more about this topic, the NCMA is offering a course throughout 2014. For more information, visit the NCMA site.