USA compliance for procurement firms

Title: USA compliance for procurement firms Excerpt: Expert guidance for US business owners and LLC founders on federal and state procurement compliance, registrations, cybersecurity, export controls, sanctions, and practical next steps. Intro Winning and performing government and public-sector contracts brings revenue and credibility — but it also brings compliance obligations. This guide collects the essential federal and practical state-level compliance requirements procurement firms (including LLCs and small businesses) must know in 2026, and provides a clear checklist to prepare, bid, and perform while minimizing legal and operational risk. 1) Essential registrations and baseline obligations - SAM.gov registration and Unique Entity ID (UEI): register and maintain an active SAM entity record to bid on federal opportunities; renew and monitor SAM notifications. (Register at SAM.gov.) - GSA Schedule and alternatives: consider a GSA Multiple Award Schedule (MAS) contract if selling to federal agencies frequently. Explore alternatives (team with primes, Mentor-Protégé, state/local markets) if a schedule isn’t yet feasible. - NAICS codes, past performance, and financial responsibility: prepare accurate NAICS, demonstrate past performance, and maintain financial records (P&L, bank references) to support responsibility determinations. 2) Federal procurement rules — FAR/DFARS - FAR governs most federal procurements; it sets procurement processes, contract clauses, and representations and certifications. Compliance with FAR clauses (and agency supplements) is mandatory where incorporated into solicitations and contracts. - Defense contracts also carry DFARS requirements (e.g., clauses on safeguarding information, cybersecurity reporting, and supply chain risk). Always review solicitation-specific FAR/DFARS clauses and flow them down to subcontractors as required. 3) Cybersecurity, CUI, and DoD requirements - If you handle Federal Contract Information (FCI) or Controlled Unclassified Information (CUI), you must meet NIST-based cybersecurity requirements. For DoD work, NIST SP 800-171 controls and DoD assessment requirements (DFARS clauses) are central; CMMC/assessment rules apply to many defense suppliers. - Prepare a System Security Plan (SSP) and Plan of Action & Milestones (POA&M) for gaps; perform gap analyses versus NIST SP 800-171 and map controls to operations. Register and submit required self-assessments/scores where DFARS requires them and track SPRS/CMMC status. 4) Export controls and sanctions screening - Export controls (EAR administered by BIS at Commerce; ITAR administered by DDTC at State) can restrict sales, technical assistance, and technology transfers. Determine whether your goods, software, or services trigger EAR/ITAR controls and secure any necessary licenses before performance. - OFAC sanctions compliance: screen customers, partners, and subcontractors against OFAC SDN and sanctions lists. Contracts with sanctioned parties or with restricted-country end-users can result in civil/criminal penalties. 5) Anti-corruption and financial compliance - FCPA and anti-bribery: implement policies prohibiting bribery of foreign officials; conduct third-party due diligence for agents and partners. Maintain accurate books and records respecting contract costs and billing. - AML and beneficial ownership: track FinCEN developments — as of March 26, 2025, FinCEN issued an interim final rule changing BOI reporting scope; verify current FinCEN guidance and any filing obligations (particularly for foreign entities registering to do business in the U.S.). 6) Labor, wage, and sourcing rules - Wage laws: Davis-Bacon Act and Service Contract Act requirements can apply to federal construction and service contracts; ensure prevailing wage classifications and certified payroll records where required. - Buy American / Build America, Buy America (BABA): certain federal procurements require domestic content or domestic manufacture percentages. Verify Buy American/TAA applicability and maintain supplier documentation for country-of-origin claims. 7) State-level procurement and registration (practical approach) - States have their own vendor registration portals and certification programs. Examples: California Department of General Services (DGS) procurement resources, New York OGS vendor central, Texas DIR and state procurement sites. - Practical steps: identify target states, register as a state vendor where you intend to sell, maintain copies of state-level tax registrations, and check state-specific small business set-asides and preference programs (HUBZone, WOSB, SDVOSB, etc.). 8) Recordkeeping, audit readiness, and subcontractor flowdowns - Maintain contemporaneous records: invoices, bills of lading, country-of-origin documentation, subcontractor agreements, payroll, timesheets, and procurement decisions. - Implement written procurement policies, conflict-of-interest disclosures, and an internal audit protocol. Be ready to produce records for contract audits and government reviews. - Flowdown mandatory clauses to subcontractors and ensure subcontractor compliance (cybersecurity, export controls, OFAC screening, wage compliance). 9) Practical compliance program for procurement firms (step-by-step checklist) Initial setup (before bidding): - Register in SAM.gov and obtain UEI. Keep entity data current. - Identify applicable NAICS/PSC codes, select target agencies and states, and register on state vendor portals. - Conduct a compliance risk assessment (cyber, export, sanctions, labor, Buy American, FCPA). - Prepare policies: Code of Conduct/anti-bribery, export control screening, sanctions screening, procurement procedures, records retention. - If handling CUI/DoD data, perform NIST SP 800-171 gap analysis and draft SSP and POA&M. When bidding/performing: - Review solicitation FAR/DFARS clauses carefully and confirm flowdown requirements. - Verify supplier chain compliance for country-of-origin and export control status. - Screen customers and partners for OFAC/denied-party status. - Ensure payroll and wage systems meet prevailing wage requirements if applicable. - Keep detailed procurement and contract execution records. Ongoing maintenance: - Renew SAM registration annually and monitor entity status. - Conduct periodic training (FCPA, sanctions, cybersecurity hygiene, procurement ethics). - Audit procurement and subcontractor compliance at least annually. 10) State-specific considerations (how to research for your state) - Look up your state procurement/vendor registration portal (search: [State Name] + "vendor registration" or "procurement vendor"), and review required documentation and small-business preferences. Example portals: California DGS, New York OGS, Texas DIR. - Confirm state tax registration (foreign qualification or nexus) and occupational licensing that may apply to service providers. - Check for state-level disclosures (contractor disclosures, lobbyist/ownership disclosures) that may apply to public contracts. 11) Common pitfalls and how to avoid them - Incorrectly certifying Buy American/TAA compliance — verify supplier documentation and implement supplier surveys. - Neglecting OFAC/denied-party screening for subcontractors and partners. - Underestimating cybersecurity obligations (especially for DoD work) — treat cyber readiness as a contract requirement, not a nice-to-have. - Poor recordkeeping — many contract disputes and False Claims Act exposures arise from inadequate documentation. 12) Resources & next steps - Core federal resources to bookmark: Acquisition.gov (FAR/DFARS), SAM.gov (entity registration and UEI), GSA (MAS/GSA Schedule resources), FinCEN BOI page, DoD CMMC and NIST SP guidance, OFAC sanctions pages, BIS/DDTC export-control pages, SBA contracting resources and PTACs for free state/local assistance. - Seek procurement- or government-contracts counsel for complex bid strategies or compliance breakdowns; consult PTACs and SBA for no-cost counseling and GSA OSDBU resources for small businesses. Closing This guide consolidates the immediate compliance priorities procurement firms face when pursuing government and public-sector work. Use the checklist to triage the highest risks for your business (cybersecurity, sanctions, export controls, and registrations), and seek expert counsel when you encounter complex DFARS, ITAR/EAR, or multi-jurisdictional tax/licensing questions.