The $787-billion stimulus package provides for about $130 billion in federal, state and local government construction spending. The entire construction industry has been anxiously awaiting the pipeline of projects now hitting the streets. With the economic crisis having all but shut down commercial and residential construction, many in the construction industry, including contractors who have no prior experience in government construction, are now actively competing for a share of the stimulus pie. This change in market focus has immediate ramifications for the newcomers. Most important, transitioning contractors must quickly learn that success in the public sector requires education and adjustments in four areas.
First, the rules of the game are fundamentally different. Unlike private contracting, which is governed by common law, local statutes, state mechanic’s lien laws, the Uniform Commercial Code and standard form agreements, government contracting is regulated by special procurement statutes and regulations and conducted under government-drafted “boilerplate” contracts. The statutory and regulatory framework includes unique laws on contract formation, bidding, negotiations, accounting, labor relations and many other issues not typically addressed in commercial construction contracts.