Rules of the road: the key players, rules and obstacles you need to know to sell to the U.S. Government

19/02/2016

Rules of the Road to sell to the U.S. Government

Rules of the Road to sell to the U.S. Government

For those looking to initiate business with the U.S. federal government, my aim is to lay aside some of the mysteries around the U.S. federal contracting process by introducing a few terms that are tossed around in a conversation, but perhaps not well understood, such as FAR, DFARS, FCT and GSA.

This article will also point to a few important websites that will be useful for Canadians in the pursuit of exporting to our closest neighbour and biggest trading partner.

The first and second articles published in this series provided information on where to review U.S. opportunities, and how to register to do business with the U.S. Government. Let’s hope that this piece will provide sufficient knowledge to put the “big picture” in context, enabling you and your team to move ahead in selling to the U.S. Government.

Discover the Federal Acquisition Regulation (FAR) and its cohorts

The FAR is the manual of U.S. Government contracting. You can find it, you can learn it, you can use it and you can understand it if you work at it, but you can’t possibly memorize it! Note that the FAR consists of 53 parts, which are further divided into detailed subparts.

Above and beyond the FAR, some U.S. Government departments and agencies have supplemental regulations. In the case of the U.S. Department of Defense (DoD), it has the Defense Federal Acquisition Regulation Supplement (DFARS). These specific regulations are based upon DoD policy and/or U.S. law.

A complement to the DFARS is the Procedures, Guidance, and Information (PGI). The PGI will help you to understand the DFARS. The Office of Defense Procurement and Acquisition Policy (DPAP) is the DoD authority for contracting and procurement policy.

Agreements between friends

As a Canadian company and a potential supplier to both DoD and NASA, you need to be aware of two important agreements between Canada and the United States of America: the Defence Production Sharing Agreement (DPSA) and the Defence Development Sharing Agreement (DDSA).

The DPSA is administered by the Canadian Commercial Corporation (CCC), while the DDSA is managed by Innovation, Science and Economic Development Canada (formerly named Industry Canada).

The DPSA was signed in 1956, and the DDSA in 1963. In 1985,the U.S./Canada Joint Certification Program (JCP) office was activated in Battle Creek to support both agreements by allowing Canadian and American companies access to controlled unclassified technical information belonging to DoD and DND (Department of National Defence) on a need-to-know basis. By the way, a hybrid JCP website also exists in a transition state during an update to new Defense Logistics Agency web pages; you can try either site to see what works best for your browser.

The legal authority in Canada for the JCP is the Technical Data Control Regulations enacted under the umbrella of the Defence Production Act.

A contract award by a U.S. Government agency to your company will contain clauses that come from the FAR, and maybe even supplemental regulations. In the case of a contract award from DoD, it will contain clauses from the FAR and the DFARs as well.

Some special clauses directly relating to Canada are those in the DFARS which identify CCC. For example, DFARS 225.870 is one which stipulates that awards over the Simplified Acquisition Threshold (SAT) (currently $150,000 U.S.) must go through CCC. Can you find the FAR that identifies the SAT level(s)? Hint, look at FAR 13.000 Policy.

If a DoD contracting office wants to award a contract to your company over the SAT, DoD will award it to CCC, who in turn will create a domestic contract for your company, provided it passes CCC’s due diligence (managerial, technical and financial) process. In turn, CCC gives DoD a sovereign guarantee on the terms and conditions of the contract. Are you keeping up with all of these acronyms?

If a contract is under the SAT dollar level, DoD can award it to your company directly or ask one of its sub-contractors to purchase it for them. They also have the option of making a credit card transaction.

Pay attention to security

In the U.S. Government environment, Top Secret, Secret, and Confidential are the security levels of protection that may be required in the performance of classified contractual work.

Security requirements in an awarded U.S. contract to CCC are converted into the Canadian equivalent using a Canadian Security Requirements Check List (SRCL).

If a contract contains a classified security requirement, no contract can be awarded to the company until the company itself, and appropriate staff, have been identified as having the required level of facility and personnel security clearances.

Such clearances are issued by Public Services and Procurement Canada’s (formerly Public Works and Government Services) Industrial Security Directorate. Obtaining security clearances for classified projects can take a considerable amount of time to process.

Readers need to review the Industrial Security Manual to understand that security is everybody’s business. Also, note that if your company is required to have certain U.S. defense articles as part of the contract, you will have to apply to the Canadian Controlled Goods Program and appoint a Designated Official as part of the process.

By the way, DFARS dealing with cybersecurity are very topical within the U.S. defence milieu and will remain so because of the threat environment. It is recommended you review the presentation found at the link in this paragraph.

What happens when a Canadian supplier receives an unclassified contract with cybersecurity DFARS identified and the end buyer is the U.S. Government? In this situation, if the CCC is the Canadian prime contractor, the company should contact the CCC contracting officer for assistance.

In turn, the CCC would most likely discuss the question with Public Services and Procurement Canada’s Industrial Security Directorate to develop the appropriate policy and guidance. You should expect to see cybersecurity clauses called out in any contract you receive indirectly or directly from DoD.

Finally, if a CCC contract award requires you to have Communications Security (COMSEC) equipment and keying material, you must work with CCC and the Industrial Security Directorate to obtain the required security clearance level for the contract. Then, be sponsored for a private sector COMSEC account.

Research your competition and customers

Who is the competition? Who is buying what? If you don’t know, it’s absolutely crucial that you find the answers to these questions.

Remember to use USASpending.gov and fbo.gov to do your research as well. You can use Subscribe Now to see daily listings of high value DoD awarded contracts from the main DoD web site. Use USASpending.gov by inserting a company name into the Search Site box found on the right hand side near the top of the page. You can also use the Advanced Data Search.

When you use fbo.gov, go to “Opportunities List,” click on “Advanced Search,” and select “Archived Documents” on the right hand side. Next, go to “Opportunity/Procurement Type” and check “Award Notice”.

As another avenue, try searching the FBO Opportunities List for “BAA” without the quotes. You will be surprised what you find.

Another DoD program you can use to search for opportunities is the annual Foreign Comparative Testing (FCT) program. Once at the site, click on “Help” to discover what the program is all about this year. Also, review the DND web site dealing with international programs that can help you in dealing with the U.S., or even NATO.

In FBO, many awards from the Defense Logistics Agency show Canadian suppliers. Review the DLA Internet Bid Board System (DIBBS) to view and submit secure quotes on DLA items of supply. TIP: If you enter DLA into the Keyword/Solicitation # box at FBO.gov you will see a comprehensive listing of DIBBS requirements without going to the actual DIBBS website. JCP certification is required to obtain access to the secure C-Folders part of the DIBBS web site. Once at DIBBS, you will get a consent banner – click “OK”. At the actual site see the “DIBBS Notices” at the bottom of the page for important information.

Training, Knowledge, and Opportunities (TKO) seminars have been scheduled for 2017 in Columbus, Ohio. They should be of interest to companies supplying parts to DLA or who want to do so. The JCP Directly Arranged Visit process should enable you to attend the event. Contact the Canadian Representative if problems arise with access to the seminars.

The opportunity to sell to the U.S. Federal Government is a profitable one that is accessible to exporters both large and small, and now is a great time to start the process.

Doing your homework and getting to know the players, regulations and hurdles you may face on the way will be key to your success in tapping in to this market.

In the next article, we will be talking about the biggest challenges you will meet on your way to achieving a contract to sell to the U.S. Government and how you can overcome them.

Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Author: Norman Weir

Norman Weir is a Senior Advisor at the global trade strategy consulting firm Allam Advisory Group. He specializes in Aerospace, Defence and Security as an experienced trade and security professional with a thorough knowledge of the national technology and industrial base of the United States and Canada. He has worked extensively in the United States with the Defense Logistics Agency and the United States Navy. He also served as a Canadian diplomatic attaché in Washington for 7 years. As a FITT graduate, his interest continues to lie in helping companies grow their unique businesses.

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