Special Bulletin

On October 21, 2004, the U.S. Congress delivered its final version of the "National Defense Authorization Act" to President Bush. Once the President signs the act into law, which he is expected to do soon, over $270 million in new construction projects will be channeled to North Carolina.

North Carolina's military bases and other federal facilities generate numerous contracting opportunities. Many contractors are turning to federal construction work as a new or expanded source of business. In addition, small businesses benefited from over $67 billion in federal small business contracts in 2003. This Special Bulletin lists the new Department of Defense ("DoD") contracting opportunities and presents the three essential steps in successfully becoming a DoD contractor.

North Carolina Military Installations Can Benefit You

There are tremendous opportunities for contracting with the DoD during the coming months. The following is a list of the new contract opportunities at DoD installations in North Carolina. Construction projects already in progress are not listed, and also may present ongoing contracting opportunities.

Preparing to Compete

What do you need to know to be able to take advantage of these opportunities? Unlike traditional commercial contracting, you will need to prequalify with the DoD in order to bid on construction contracts. (However, if you are a subcontractor on a DoD project, you usually do not need to prequalify.) There are several steps you should take now to ensure that you are prequalified and in a position to compete. Below are the most important initial steps:

• First, you need to determine whether you are a "small business" according to federal government standards. These standards are available through the SBA, but usually general and heavy construction contractors must have less than $28.5 million in annual revenues to be considered "small." Even if your business exceeds this amount, you may qualify as small under a different category, so it is important to check. Small businesses may benefit from DoD small business participation programs including entire contracts "set aside" for small business bidding. "Disadvantaged" and HUBZone-located small businesses can benefit from an even greater range of "preference" programs.
  
  
• Second, you need to register with the federal government's Centralized Contractor Registration ("CCR") system, which is the primary vendor database for the DoD. The DoD requires both current and potential contractors to register with CCR. Contractors are required to complete a one-time registration to provide basic information relevant to procurement and financial transactions. Contractors then must renew their registration annually to maintain an active status. Registration is free, but it does require an investment of time and effort to assemble the many pieces of required information.
  
  
• Third, you should consider the general standards the DoD uses to determine if a bidder is "responsible." Even if you make the most attractive offer, the DoD will not contract with you unless you are found to be "responsible". Among other criteria, you must be able to demonstrate that you (1) have adequate financial resources; (2) are able to meet deadlines; (3) have a satisfactory record of performance and ethics; (4) have the necessary organization, experience, and accounting controls; and (5) have the necessary equipment and skills to complete the contract.

Knowledge of the steps needed to make yourself competitive goes a long way to improve your chance of winning a job. For access to a tremendous amount of federal contracting information, you should view www.sba.gov, www.ccr.gov, and www.fedbizops.gov. Unfortunately, the volume of information can be overwhelming. Many contractors benefit from additional assistance when faced with DoD contracting, including help with teaming arrangements, solicitation and bid projects, and disputes with the government during the course of a contract. Ward and Smith, P.A. offers legal advice and support aimed at helping businesses to become and remain successful DoD contractors.

Our Government Affairs Practice

Successful federal government contractors cannot rely solely on technical expertise and good business sense. Instead, success is also linked to an understanding of the federal procurement process. Ward and Smith, P.A. regularly assists clients in government contracting matters by helping clients apply for small business programs, working with clients to bid on contracts, disputing solicitations or awards, requesting relief under existing contracts and appealing adverse contracting officer decisions, lobbying for funding of projects, and fair treatment of interests.

Our Construction Practice

Our Construction Section represents clients involved in all aspects of construction, including general contractors, subcontractors, suppliers, developers, owners, architects, and engineers. We assist clients in reviewing and drafting contracts and resolving all types of disputes. We emphasize avoiding costly disputes and litigation. Clients can benefit from early counseling on issues such as bonds and liens; contractor licensing; regulations of the Occupational Safety and Health Administration; building codes; scheduling, delays, and payment claims; and project administration. Determining the quickest and least expensive manner in which to resolve claims and disputes is a top priority. Our attorneys have significant experience negotiating settlements and frequently engage in mediation.

Ward and Smith, P.A. is the largest law firm based in eastern North Carolina, and serves as counsel for more mid- and large-sized businesses in the region than any other law firm. More than 60 attorneys comprise the firm and serve clients locally, regionally, nationally, and internationally from offices in Greenville, New Bern, Raleigh, and Wilmington. Honored with the distinction of being rated as one of America's Greatest Places to Work with a Law Degree by Harcourt Brace, Ward and Smith, P.A. is also home to 16 attorneys included in the publication The Best Lawyers in America and five attorneys selected as "Legal Elite" from a peer-review survey published in Business North Carolina.

For further information regarding the issues described above, please contact one of our Government Affairs attorneys Albert R. Bell, Jr., James W. Norment, Hugh R. Overholt, or Samual H. Poole.

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This newsletter is not intended to give, and should not be relied upon for, legal advice in any particular circumstance. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.