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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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