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Win Federal Contracts With FAR

Scott Honiberg and Jeffrey Weinstein, for HealthLeaders Media, October 27, 2008

You can't win a federal healthcare contract without knowing something about the Federal Acquisition Regulation, commonly known as "the FAR." For example, a list of selected healthcare contracting opportunities was just announced by various federal agencies.

You'll need to know how to participate in the process in order to win a contract. The FAR comprises the fundamental law, policies and procedures that almost every federal agency uses when buying services and supplies. The FAR's rules—implemented in scores of clauses that an agency inserts into every contract—address the entire spectrum of federal procurement, from how an agency determines and publicizes its needs to how a proposal should be prepared and evaluated through contract completion and final audit.

For healthcare providers, the FAR is about as detailed and complex as the Medicare Provider Reimbursement Manual (...and just about as exciting a read, as well). It's a necessary evil with which any healthcare organization must become reasonably familiar in order to capture a federal contract and perform successfully once that contract is awarded.

Even a quick glance at the FAR's table of contents shows how different doing business with the federal government can be from contracting in the private sector. For example, the government prohibits its contractors from engaging in practices and conduct that are fairly common (and legal) in commercial business, like giving gifts, offering employment, and buying meals for purchasing personnel. In addition, the government uses its massive purchasing power to implement socioeconomic policy, like "setting aside" certain contracts for small business, businesses owned by women, veterans, and minorities, and requiring drug-free workplaces, occupational safety, and certain privacy protections, among other things.

The FAR is to federal contracting what the tax code is to filing your Form 1040. However, despite the apparently endless number of confusing, complex, and obscure rules and regulations, those applicable to most federal healthcare contracts are relatively limited. Many federal healthcare contracts are based on the language of a request for proposal. In a typical RFP of some 50-60 pages, perhaps half is "boilerplate" language that, for all practical purposes, can almost be ignored completely, as it will be totally irrelevant to a healthcare contract. To the uninitiated, the sheer volume of material acts as a powerful intimidation factor. As one becomes more familiar with the process, experienced federal healthcare contractors actually learn how to effectively turn that intimidation factor around to their own advantage.

If there is a silver lining to the FAR, it is that firms that have not been selected for awards still have certain rights to learn about how their proposal was evaluated, and, if appropriate, formally challenge, or protest, the award. This provides an opportunity to have the evaluation process and the award decision reviewed by the Government Accountability Office as an independent arbiter, which may result in an award decision being overturned. While there are many burdens associated with the federal contracting process, there are few examples in the private sector where a firm that didn't get the business has the "right" to challenge the buying firm's decision. (Just try telling General Motors, for example, that you were unfairly excluded from their solicitation to become a member of their preferred provider network and want them to reconsider... see how far that'll get you!)

The FAR is always being revised and updated, so it is important to know and understand which version of a particular clause applies to your contract. Government agencies and judges who hear cases involving government contracts expect a company doing business with the government to be familiar with the FAR's provisions, even if a company has just begun doing business with the government or has very little government business.

In next month's article, we'll explain how to begin navigating the FAR's requirements in preparing a bid or proposal in response to a government agency solicitation.


Scott A. Honiberg is president and Jeffrey E. Weinstein is senior counsel at Potomac Health Associates, Inc. They can be reached at honiberg@erols.com and JZWLaw@msn.com, respectively.
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