Socioeconomics in Federal Contracting

Abstract
A contract refers to a written or spoken treaty particularly regarding employment, sales or occupancy that is envisioned to be enforceable by law. The government, always finds itself engaging in contracts with various companies while undertaking its projects. Through the agreements, the government employs the companies to undertake the proposed project within a given budget and time. The agreement is enforceable by law, and therefore if one of the parties violates the contract, they can be sued in the court. In the country, there exist various disadvantaged people who own small businesses, without huge capitals and resources. If these small businesses compete for contracts with other large companies, it is definite that they will not be able to win any contract. Therefore, the government has established various policies that ensure the small businesses enjoy similar benefit as other large companies in matters concerning federal contracting. This paper discusses on various socioeconomic programs that have been established by law in the federal contracting. The programs include; small business set- asides, Service-Disabled Veteran-Owned Small Business, small disadvantaged business program, Woman-owned small scale business and the hub zone Small Businesses program.
Socioeconomics in Federal Contracting
Federal contracting refers to a form of a grant or cooperative agreement that is used by the federal government to offer to finance for research and development schemes. The federal government uses contracts as a procurement method unlike the grant or cooperative contract.

The main objective of the federal contract instrument is to buy possessions or services for the direct advantage or the use by the American government. The federal contracts are administered by strict rules and regulations that are contained in the federal acquisition regulation (FAR). The contracts mostly necessitate regular reporting and a high level of accountability to the sponsor. Therefore, the failure to attain the required results or product within the given period and the financial plan leads to criminal or civil felonies.
There exist a great difference between the federal contracts and grants. For example, the federal contracts are used as a procurement funding method for the government, while grants are flexible funding method to assist the public needs. The federal contracts are comparatively inflexible to nature of work and budget while grants are flexible to alteration in nature of work and budget. Also, the federal contracts require regular reporting while the grants usually require the annual report only. Federal contracts are administered by laws, rules, and guidelines while the grants enjoy the freedom and less accountability to produce results. In case a federal contract fails to perform, it results in legal action or financial consequences, while the grants do not have legal action, in case the project do not perform.
The government is very careful on how it purchases its products and services. The main objective of the rules and guidelines that oversee the federal contracts are to guarantee that the competition is open and fair. The process of inviting proposals and assessing bids should be fair and open. Any company in the country that is fit to bid should be considered. The rules also guarantee that the goods and services are appropriately valued. The government pursues pricing that is equal with its formidable buying influence. Also, the rules guarantee that the government gets what it pays for, whereby it guards itself by stipulating requirements and circumstances for all the acquisitions. Lastly, the rules help to ensure that both the government and the contractors comply with the country’s law. The federal acquisition regulation usually applies to most federal organizations.
There are various major socioeconomic programs in the federal contracting that accrue benefits to many citizens in the United States of America. One of the socioeconomic programs is known as a small business set- asides. This program necessitates organizations to limit rivalry on particular contracts to fit small businesses so that small companies do not compete with large companies for the same contracts. However, because the law necessitates the government to purchase products at competitive prices, contracts are made when two small businesses are anticipated to submit offers so as to confirm enough competition. Service-Disabled Veteran-Owned Small Business program is another important socioeconomic program found in the federal contracting CITATION FAR l 2057 (FAR, n.d.). The public law established a regulation to federal organizations to reward 3% of prime deals to service-disabled-veteran-owned small companies (SDVOSB). Also, the large prime contractors have the SDVOSB subcontracting objectives. Another socioeconomic program is known as a small disadvantaged business program. Due to the determination of refining and inspiring the small business segment, the environmental protection agency formed a realistic department-wide goal. The goal is to award contracts to the small cooperation that are owned and administered by socially and economically disadvantaged persons. Through this program, small entrepreneurs are encouraged on their activities and can grow.
The woman-owned small scale business program is another socioeconomic program in the federal contracting CITATION FAR l 2057 (FAR, n.d.). So as to be able to assist and grow businesses that are owned by women, this program guides acquisitions bureaucrats to take suitable action to ease, preserve and reinforce females’ business enterprises and safeguard involvement of females in a free enterprise system. The appropriate action comprises of awarding prime contracts and subcontracts and the advising of women-owned companies. A hub zone is another socioeconomic program in the federal contract which refers to an area which is located in either a qualified census tract, qualified Non-metropolitan County or areas within the limits of federally renowned Indian reservations. The US small business administration controls and implements the hub zone program.
This paper analyses on Service-Disabled Veteran-Owned Small Business program, which is an important socioeconomic program found in the federal contracting. The public law established a rule to federal agencies to award 3% of prime contracts to service-disabled-veteran-owned small business (SDVOSB). Also, the large prime contractors have the SDVOSB subcontracting objectives CITATION FAR l 2057 (FAR, n.d.). The government’s strategy for contracting with the Service-Disabled Veteran-Owned Small Businesses proves its obligation to maximize opportunities for the veteran-owned small trades in the federal contracting. The government plans comprise policies of keeping contracts wholly for the service-disabled veteran companies. Also, the strategy encourages and facilitate participation, by the SDVOSB in rivalries for the award of agency contracts. Through the strategy, various agency contractors are encouraged to subcontract SDVOSB and actively monitor their performance. The strategy also helps in training the agency personnel on the applicable law and rules involving the participation of SDVOSB in the federal contracting. Lastly, these strategies offer information to the SDVOSB that help the companies in partaking in awards of agency contracts. For a business to qualify for the service-disabled veteran group, it should be a small company that is owned and governed by a disabled veteran.
The Service-Disabled Veteran-Owned, Small Business program, has various advantages to the parties involved. For example, the small business owned by the disabled veterans can get into contracts with the government, a process which would have been difficult without the program. Also, the businesses are prevented from competition in the contracting process from other large businesses. Therefore this program assists the small business to grow and provide sufficient returns to the owners. However, this program has various disadvantages. For instance, the contracting business may not have the essential resources to undertake a given project. In such a scenario, the project results are poor and also wastage of time is experienced, as the companies outsource resources.
In conclusion, federal contracting is a vital process for the government in its activities of funding various development projects. Without the socioeconomic programs established by the government, large companies would be the one benefiting most from the government projects. Therefore, the socioeconomic programs play a vital role in guaranteeing that the deprived people in the society can engage in business with the government. The various socioeconomic programs have more advantages compared to disadvantages to the community at large.
References
FAR. (n.d.). Retrieved from Part 19 Small Business Programs: http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/19.htm