The nation has expected the implementation of “pay-to-play” laws in Washington D.C. for years, but the legislation has been delayed — until now. On November 9th, 2022, the new law will be enacted after funding issues prevented efforts from materializing. This is ultimately part of the Campaign Finance Reform Amendment Act of 2018. But what is a pay-to-play law and what will this one do?
In general, these laws provide much needed regulations for those who receive financial contributions while trying to obtain government contracts. They also limit and govern contributions made by public officials.
The D.C. law would ban contributions made to any officials who are behind the awarding of government contracts — so long as those contracts are worth more than $250,000. In other words, you can still embrace corruption as long as the contract is a small one.
Most businesses in the running for a government project should probably hire a business contracts attorney to review the new laws before making a bid, as any mistake could delay or prevent a victory.
Several states already have similar laws on the books. They include Maryland, New Jersey, Pennsylvania, and Rhode Island. Other states have different versions of the law.
In Pennsylvania, business organizations have until February 15 to report on disclosure requirements. In New Jersey, business contributions that toal over $50,000 must be reported by a business on March 30. In Maryland, businesses must disclose contracts worth $200,000 or more. Businesses must also disclose contributions made to lobbyists so long as those contributions amounted to more than $500. In Rhode Island, businesses must disclose contributions worth more than $5,000.
The awarding of government contracts has always been considered a shady business. There are a number of factors that determine who gets the contract and how much is paid. For example, businesses are subject to the lowest price technically acceptable (LPTA), the price performance tradeoff (PPTO), confidence based on past contracts awarded, and the strength and qualifications of the proposal itself.
Let’s say you bid on a government contract (and that your business could actually fulfill this contract). The first thing the federal government does is evaluate all contracts based on the aforementioned factors. Each bid is assigned a value. As you might expect, whichever business has the highest valued bid will win the contract.
There are a number of reasons high-profile companies might lose a contract they should have won. One of the most common is wrong or inconsistent formatting. It’s like sending a publisher a book manuscript. It needs to be perfect. If the margins are inconsistent or there are punctuation errors throughout the book, the writer won’t hear back.
Many contracts blend in or fail to answer all the questions asked in a government proposal. Others fail to meet the criteria. Some don’t understand how competitive the bidding would turn out to be.
All of these are great reasons to hire an attorney first. To use the book metaphor again, it’s like hiring an editor to check your work before you send it in — it increases your chances of success tenfold.