Surety Bond Quarterly - Winter 2015 - (Page 14)

feature Hot Topics in Federal Government Contract Here's what surety professionals and their contractors should know. This is the first in a series of five articles on federal government contract compliance requirements that contractors often fail to satisfy. WhEN IT COMES to federal government contracting, compliance can be the last item that construction contractors want to address. It can be burdensome and time-consuming, and every dollar amount that a contractor devotes to compliance cuts into a contractor's bottom line. Despite the arduous nature of compliance, however, the risks BY W. BARRoN and consequences of not comA. AVERY plying with contractual requirements far outweigh the burdens encountered and the costs of compliance. These risks, consequences, and costs are particularly outweighed when compared to the relatively straightforward compliance requirements that contractors often fail to satisfy. Set forth below is a discussion of the potential consequences of compliance failures, a summary of two selected compliance areas that have recently been the focus of the federal government's compliance enforcement efforts, 14 surety BoNd Quarterly | WINTER 2015 and conclusions for surety professionals and their construction contractors. A. Severe consequences for compliance failures Federal government contractors' failures to comply with various contract requirements are not taken lightly by the government. Draconian penalties are commonplace, and even a single violation can be catastrophic for contractors with a government contracting portfolio. These draconian penalties are frequently levied through the government's assertion of claims against contractors, termination for default of contractors' contracts, suspension and debarment of contractors, and False Claims Act suits against contractors. At the very least, and similar to concepts in the commercial sector, contractors' failure to comply with contractual requirements can result in litigation and the government's termination for default of contracts. With respect to litigation, non-compliance with a contract requirement may have a financial impact on the government; and, particularly in light of recent budget limitations, the government can seek to mitigate that financial impact by asserting claims against the contractor. In connection with terminations for default, even a seemingly minor failure to comply can result in a termination; and recent budget woes within the federal government have incentivized the government to terminate contracts and increased the number of

Table of Contents for the Digital Edition of Surety Bond Quarterly - Winter 2015

NASBP Upcoming Meetings & Events
2015-2016 Executive Committee
From the CEO - Never Forget Your Latin: Ignorantia Juris Non Excusat
Practical Insights: What You Need to Know - Unlicensed Contractors A Threat to Their Sureties
Hot Topics in Federal Government Contract Compliance
Fraud Schemes and Related Controls in the Construction Industry
Unravelling the Mystery of Court Bonds
NASBP Attorney Advisory Council Participates in NASBP Regional Meetings
Public-Private Partnership Projects
Mining the Value of the NASBP Member Network
Applied Education
Index to Advertisers

Surety Bond Quarterly - Winter 2015