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The federal government conducts its business
through authorized agents, called contracting officers:
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The Procurement Contracting Officer
(referred to as the "PCO") places contracts and handles contract
terminations when the contractor defaults.
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The Administrative Contracting Officer
(referred to as the "ACO") administers the contracts.
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The Termination Contracting Officer (referred to
as the "TCO") handles contract terminations when the government terminates for
its convenience.
Depending on the situation, the same person may be all three.
Because the government is a sovereign entity (in other words, it is the ruling
power), it has rights that commercial businesses do not have. For example, the
government has the right to unilaterally revise the contract, so long as changes
are within the parameters of the contract.
This means the government can change the quantity it is contracting for, or how
it is packaged or how it is being shipped. The contractor is entitled to
equitable cost adjustments, but must comply with the changes. The government also
has the right to cancel the contract if the need for the product or service no
longer exists. Here again, the contractor would be entitled to reimbursement for
costs incurred.
Because taxpayer dollars are being spent, the government can impose extensive
audit and surveillance requirements under the terms of a contract.
However,
extensive and stringent requirements are usually imposed only on higher priced
contracts (i.e., contracts of $100,000 or more in value) and thus are not
usually applicable to contracts with small businesses.
One big fear that small business owners seem to have is that the government will
come in and audit their books, go through their files with a fine tooth comb,
and tell them how to run their business. That fear is totally unfounded and far
from the truth
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