If you run a business of any size, you have likely heard just how beneficial it can be to sign and keep a contract with the federal government. The DCAA, Government Contract Agency Compliance is a vital part of getting and keeping any contract with federal authorities.

Why is that? Because, as with many contracts, compliance with every part of an agreement is paramount. With that being said, complying with the government is a lot trickier than just complying with another company, as you may imagine. It requires a lot of work, oversight, alterations, adjustments, record-keeping, and so much more.

If it’s all done correctly, then a company can have a long-lasting and special relationship with the government. But if it isn’t done correctly, the relationship will be short and fruitless and will only leave a lot of untapped potential.

Cost Accounting: In order to promote consistency in the cost accounting methods controlling costs to government contracts, standards have been put in place.

These standards are stringent, long-lasting, constant, and do not relent. A business that is not ready to show just about every single purchase it makes will not do well with a government contract. They have to show all of their work, how they spend their money, why they spend their money, and so much more.

The government will only do business with companies that are willing and able to show how they are spending their money.

Constant Auditing: Auditing is a huge part of having a government contract. These audits are frequent and carried out by organizations such as the Defense Contract Audit Agency, also known as the DCAA, in order to verify compliance with legal and regulatory obligations.

Pre-award audits, incurred cost audits, and customized audits focusing on certain facets of contract performance are examples of audits. And when they start, they rarely stop. A business should be prepared to have multiple audits, often, once they have signed government contracts.

Ethical Standards: A business also has to be on its best behavior basically all of the time once they have made a contract with the government. They will need to stick to strict moral standards, which are set by the government and monitored closely.

Bribes, conflicts of interest, and other issues will be carefully watched by the government. Any business that doesn’t stick closely to the rules established will be punished, perhaps by losing their contract and being unable to get another one ever again.

The upside to having a government contract is that it can generate a ton of income for many years. The revenue raised by a government contract can be massive and it can change the trajectory of a company, for the better, for years to come.