According to our recent report on federal contract compliance by attorneys Andrew Mohr and C. Kelly Kroll, government agencies are growing more aggressive about auditing contracts with suppliers. The government, after all, is the "world's largest customer," buying some $350-plus billion in commercial goods and services each year. Many distributors are eager to get a piece of the pie.
But the federal government leverages this buying power by including in its contracts numerous laws and regulations that typically won't be found in traditional commercial contracts. Some rules are intended to protect workers, some aim to promote contracting for small and minority businesses, and still others promote the purchase of American-made products.
The subject has come up due to the news that facilities maintenance distributor Grainger has been accused of not complying with stipulations laid out in its contracts with the government. (Read article.)
Mohr and Kroll say that distributors that sell to the government must reexamine the systems they have in place to ensure they are in full compliance with obligations under contracts. They say the process requires analysis, organization and discipline, and a management that demands employees take compliance obligations seriously.
