What is DoD Compliance All About?
It’s easy to see why companies bid on government contracts – the Department of Defense spent approximately $294 billion on goods and services in 2017 alone. And with approximately half of what they purchase being non-combat supplies, firms in a variety of verticals have embraced the opportunity to supply the government with a range of goods.
But the challenge of staying in compliance with all of the DoD’s requirements can deter businesses from working with the government. As a supplier, you must follow certain standards set forth by the DoD which can be confusing. Not only are there multiple systems you’re required to use for bidding, invoicing, asset tracking and more (such as DIBBS, VSM, and iRAPT/WAWF), and the fact that every data point and every step in the process introduces the risk of human error, many companies can be understandably intimidated by the requirements.
For many companies, working as a DoD supplier accounts for one part of your business, but often involves a disproportionate amount of risk and time. But DoD compliance does not have to be a burden, and firms that are willing to give defense commerce a try can build a steady income stream for years to come.
The Importance of Staying in Compliance with the DoD
Not following DoD commerce requirements to the letter can cause delayed payment, and the cash flow issues that come with it. Compliance mistakes can also result in rejected shipments, potential penalties, and the risk of not receiving a contract renewal or getting new contracts.
An example of a consequence of making a compliance error is a formal Corrective Action Request (CAR), a notification to suppliers asking that nonconformities be remedied. Each government organization has its own CAR procedures. There are four levels of CARs, depending on how severe the nonconformity is and how it will need to be resolved.
- Issued for a nonconformity that can be corrected immediately and where no further corrective action response is necessary
- The issue is not considered systemic, significant or recurring
- Issued when contractual nonconformity cannot be corrected right away
- Problems that involve Critical Program Impact items, Safety of Flight or critical safety items
- CARs should be directed to the supplier management level responsible for initiating corrective actions
- Issued to the supplier’s top management to call attention to serious contractual nonconformity
- Because of the severity of a Level 3 CAR, the supplier must acknowledge receipt and understanding with a due date
- There may be contractual remedies involved, such as reductions of progress payments, cost disallowances, business management systems disapprovals, or more
- Issued to the supplier’s top management when a Level 3 has been ineffective
- May also be issued if the contractual nonconformity is serious enough to warrant contractual remedies, such as suspension of progress payments or product acceptance activities
The data associated with these requirements, especially when you’re also asked to use many different government websites, provides fertile ground for errors and nonconformities to happen. CARs have the potential negatively affect your profits.
Learn more about other common defense compliance concepts in our DoD glossary.
Addressing DoD Compliance Challenges with Technology
Ensuring that your business complies with all DoD requirements can positively impact your cash flow, increase the chances of contract renewals, and deliver greater efficiency that enables you to focus on your core business. Here are five things you should be doing to make sure you’re staying in compliance with the DoD:
1. Automating processing and receipt of government contracts. Get notified automatically of new contract awards using an integrated software platform for government contract management and fulfillment. Such solutions also allow suppliers to kick off the required processes to fulfill the contract from one unified dashboard, saving time and reducing opportunities for errors to occur.
2. Unifying connections to all required government databases. Working as a government supplier means providing information through multiple disconnected systems, including DIBBS, VSM, iRAPT (WAWF) and others. Integrated, DoD-approved software like Odyssey’s allows you to push and pull data from all the required databases using one interface. Instead of logging in and out of multiple government databases, having multiple windows open, and copying/pasting (or worse, entering by hand) all the data required by the government, you can create labels and perform all other necessary fulfillment functions using one software that’s connected to government systems via server-to-server integration.
3. Streamlining data entry. Every time your staff is entering required data by hand, your company is exposed to opportunities for errors that can have major consequences. That’s why it’s important to look for ways to limit manual data entry by using a system that can pre-populate necessary data and reduce the number of keystrokes required to complete fulfillment. Not only does this increase accuracy and reduce risk, it allows you to get more done in the same amount of time – potentially allowing you to scale up the amount and scope of your government contracts and bring in more income.
4. Reducing liability in labeling processes. The label creation process is a minefield for errors, requiring several different specific data points. Managing label templates manually introduces too much liability from having to be correct 100% of the time. Instead, reduce your risk by using a system that programmatically creates compliant labels by allowing you to choose commercially acceptable, pre-coded selections from a menu of options.
5. Working with a defense commerce industry expert. Supplying goods to the DoD is unlike working with any other customer. It’s crucial to partner with companies that have deep expertise in defense commerce. They can help you remove all uncertainty while still controlling the process. Government compliance standards are always changing, so it’s important to look for a company that can help you stay ahead of the curve and make sure any necessary changes are implemented quickly.
Odyssey, a leader in defense contracting solutions, has the software and expertise to ensure your work as a commercial supplier to the DoD runs smoothly. Our suite of government contract management and fulfillment solutions offer a one-stop shop for all the tasks you need to perform to execute your DoD contracts efficiently while staying compliant. Here’s what Odyssey allows you to do:
- Work straight from the contract, using a single system to manage the end-to-end fulfillment, labeling, and invoicing processes
- Integrate directly with government databases, letting you work from a unified dashboard to complete every aspect of the process
- Reduce manual data entry, and therefore reduce opportunities for errors and problems
- Automate compliant label creation, saving time while ensuring labels meet government standards
- React and response to corrective action requests in real time
- Rest assured knowing that updates to DoD mandates are implemented within Odyssey, often before they’re formally announced