Government Contracting can be an exciting opportunity for businesses both large and small. Even in hard economic times, when everyone’s tightening their belts, the government still needs to spend money to keep running. As has been discussed in previous blog posts, there are prerequisites to becoming a government contractor. In order to do business with the federal government, you must have a DUNS number and you must be registered in CCR and ORCA. We all know that it is important that these registrations be completed correctly, but why? What are the potential consequences of improper registration?
The most obvious consequence is that your business may miss out on a contract award if your registration is not completed correctly. From a sole proprietorship to a multinational corporation, all businesses must be registered in CCR before they can work with the government. No registration, no contracts.
If you somehow manage to get a contract, incorrect data in your registration could prevent you from being paid for the work you’ve performed. Unless you have far more civic pride than the average Joe, this is the whole point of being a vendor: getting paid for your work! While CCR does not process payments, agencies are required to make payments only to the bank account and information as it appears in CCR. Additionally, many agencies will withhold payment if there is a lapse in your CCR registration during the duration of a contract.
Beyond these somewhat benign but frustrating consequences, incorrect information can also have more severe results. The government considers the contractor to be solely responsible for the accuracy and completeness of the information contained in CCR and ORCA…and for any liability resulting from the government’s reliance on that data. In particular, liability under the False Claims Act stipulates that any person who knowingly makes a false claim for payment or approval, or uses false information in order to be paid or approved, will be held liable to the US government for a civil penalty of $5000-$10000, plus three times the amount of damages sustained by the government due to the contractor’s actions. Additionally, unlike in criminal law, specific knowledge of the misinformation is not required. What is required is only that the accused acted in disregard to the truthfulness of the information.
As you can see, it is of utmost importance that your business’s CCR and ORCA registration are completed fully and correctly. Even if you never miss out on a contract or face accusations of fraud, corrections can cost your company vital time, energy and money. Government investigations due to incorrect information can also be time consuming and stressful.
To avoid these consequences, be sure your information is complete and correct, in particular when it comes to your financial institution’s information and metrics used to consider whether or not your company qualifies as a small business. Also be aware that if any of this information changes, it is very important that these changes be updated in CCR and ORCA. While the procedural paperwork may seem like a preliminarily inconvenience on your way to a big contract, don’t let this molehill become a mountain due to easily avoided errors.