Cons of Being a Government Contractor
Lots of Rules
Applying to work as a government contractor takes lots of paperwork. Businesses have to apply for special qualifications and codes to be able to work with the government.
Companies also have to strictly follow the Code of Federal Regulations and various other labor standards. As mentioned before, everything the government spends money on is public information. If the job isn’t completed correctly or does not follow the set rules, it will be documented. That documentation is then available for the public to see at any time.
Businesses need to keep their paperwork in order too. At any time, the government can put in a request for its contracted companies to be audited.
No Stability
While working with a federal contractor can lead to a long-term work contract for some companies, there is still little stability in the industry. The government can decide to stop working with a certain business at any time with little to no warning.
Slow Payment
The government is a notoriously slow-paying customer. Contracted companies definitely get paid well, but the government can take upwards of 60 days to pay for completed services. Government contracted businesses often turn to government invoice factoring to ensure they have a steady cash flow while working the job – operational costs have still need to be covered and payroll still has to be made.
Is your company looking to become a government contractor?
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