Government Procurement Laws and Regulations

Now let's take a closer look at the laws and regulations that will affect you when you do business with the government. Maybe the easiest way to begin is with a brief history lesson.

Before the earliest law was passed, private individuals furnished from their own resources whatever supplies and materials the government needed. (How well do you think that would work today?) But that all changed with the Purveyor of Public Affairs Act of 1795, which allowed the government to buy needed supplies and materials.

The Civil War created monumental needs for federal government procurement needs thus the Civil Sundry Appropriations Act of 1861 became law, and this started the principles of advertised procurements for the next 86 years.

When it became apparent that small companies and their labor force needed protection, the Sherman Antitrust Act of 1890 was enacted.

Finally, the Armed Services Procurement Act, signed into law in 1947, continued the sealed bid as the preferred method of procurement, with specific exceptions. It also attempted to place procurement rules in one location. The result was the Armed Services Procurement Regulation (ASPR).

In addition, there are many other laws and Executive Orders that affect how you must conduct your business if you want to contract with the federal government.

For example, the Eight-Hour Work Law of 1892 set the eight-hour workday. The Davis-Bacon Act of 1931 set the minimum wage on the construction site at the local prevailing wage. In 1933, the Buy American Act required the government to buy only American products. The Walsh-Healey Public Contracts Act of 1936, drastically changed in 1994, required a supplier to certify that it was the manufacturer or a regular dealer. This was an attempt to do away with the broker.

In 1941, the Berry Amendment, as it is known, was passed by Congress to ensure that the Department of Defense only acquires certain end products, material and components (mostly food and natural fiber products) that are of U.S. origin, or from a qualifying country. It remained in Defense Department appropriations acts until it became law in 1994. Later it was modified in 2002 and 2006, further restricting the use of specialty metals. It only applies to DoD purchases above the Simplified Acquisition Threshold (over $100,000). DoD contractors need to be especially aware of these restrictions. Do not overlook these requirements.

Later on, the Small Business Act of 1953 was passed, which established the Small Business Administration. The Truth in Negotiation Act of 1962 required both prime and subcontractors on contracts over $500,000 to certify the cost data submitted under the solicitation. Public Law 95-507, which amended the Small Business Act of 1978, formalized the Small Business Subcontracting Plan requirement in contracts over $500,000 to large businesses. At that time, this law was considered a significant change in government procurement practices.

Now we come to the recent laws. The Federal Acquisition Streamlining Act of 1994 (FASA) was revolutionary in its impact on the federal acquisition process. It repealed or substantially modified more than 225 statutes and pushed the contracting process into the 21st century.

Among other things, it simplified the federal procurement process, reduced paperwork burdens, and transformed the simplified acquisition process to electronic commerce. Before the law could be fully implemented, the Federal Acquisition Reform Act of 1996 (FARA, also known as the Clinger-Cohen Act) was passed to correct some deficiencies in the earlier legislation and to make more changes. These last two laws were significant events because of the vast changes they made in the way that the government conducts it business. The system is continuing to make adjustments to the new, more open environment.

Laws that Affect Government Contracting
Public Law Name Result
Purveyor of Public Affairs Act of 1795 Allowed the government to buy needed supplies and materials to perform government functions.
Civil Sundry Appropriations Act of 1861 Continued the principle of advertised procurements for the next 86 years.
Sherman Antitrust Act of 1890 Protected small companies and their labor force from large business.
Armed Services Procurement Act of 1947 Continued the sealed bid as the preferred method of procurement, placed procurement rules in one location and gave us the Armed Services Procurement Regulation (ASPR), which was the beginnings of today's rulebook, the FAR.
Eight-Hour Work Law of 1892 Set the eight-hour workday.
The Davis-Bacon Act of 1931 Set the minimum wage on the construction site at the local prevailing wage.
Buy American Act Required the government to buy only American products.
Walsh-Healey Public Contracts Act of 1936 (note that this law was drastically changed in 1994) Required a supplier to certify that it was the manufacturer or a regular dealer. This was an attempt to do away with the "broker."
Small Business Act of 1953 Established the Small Business Administration.
Berry Amendment of 1941, (later modified in 1994, 2002 and 2006) Mandated that the Department of Defense buys certain items from U.S. or qualifying countries.
Truth in Negotiation Act of 1962 Required both prime and subcontractors on contracts over $500,000 to certify the cost data submitted under the solicitation.
Public Law 95-507, Amendment to the Small Business Act (1978) Formalized the Small Business Subcontracting Plan requirement in contracts over $500,000 to large businesses. Set goals for large primes.
Federal Acquisition Streamlining Act of 1994 (FASA) Revolutionary in its impact on the federal acquisition process. It repealed or substantially modified more than 225 statutes and pushed the contracting process into the 21st century. Among other things, it simplified the federal procurement process, reduced paperwork burdens, and transformed the simplified acquisition process to electronic commerce.
Federal Acquisition Reform Act of 1996 (FARA) or (Clinger-Cohen Act) Before FASA could be fully implemented, this Act became law and corrected some deficiencies in the earlier legislation and made more changes.

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