A government contractor is someone who hires subcontractors to do work for them. If the government is repaving a street, for example, the contractor will find a company to do the work. This is usually accomplished by gathering bids from various businesses and selecting the lowest-priced one. Even if the price is higher, the contractor may choose a company based on experience or turnaround rate.
It is possible that the government contractor will work directly for the government. A specific government office may have someone hired specifically to find subcontractors. However, a separate company will frequently gain access to upcoming government bids and hire salespeople to research and find subcontractors to perform the work or provide the services. These contractors typically learn to bargain with businesses in order to lower prices, and then mark them up slightly to make a profit. The sales team is usually paid a percentage of the profits.
Rather than finding service providers, a government contractor will frequently seek out suppliers of goods. The government, for example, must purchase a variety of items throughout the year. Medical supplies for hospitals and clinics, uniforms for the armed forces, and office supplies for various government offices are just a few examples. The contractor will contact several manufacturers in order to find not only the best price, but also a company that can provide the required quantity.
After a bid is won, the government contractor will most likely enter into a contractual agreement with the provider or subcontractor. This usually happens after the government contractor and the office or area of government with which he is doing business have signed a contract. Prices, delivery schedules, and other aspects of the products or services being offered are usually included in these contracts. This is a delicate procedure because the contractor bears a great deal of responsibility.
In the event of a delay in payment from the government, the government contractor is responsible for ensuring that the subcontractors are paid. Because the contractor, not the government, hired these businesses, it is his responsibility to ensure that payments are made on time. It is also his responsibility to oversee the work in progress, ensuring that deadlines are met and that subcontractors provide quality services. The contractor is held liable by the government if the subcontractor fails to meet his obligations.