Agovernment contractor is a company (privately owned,publicly traded or astate-owned enterprise) – eitherfor profit ornon-profit – that producesgoods or services under contract for thegovernment.[1] Some communities are largely sustained by government contracting activity; for instance, much of the economy ofNorthern Virginia consists of government contractors employed directly or indirectly by thefederal government of theUnited States.[2]
Frequently a termpublic contractor is used to describe the government contractor.
Inancient Rome, termpublican was used for private individuals that performed work on public buildings, supplied Roman armies, or collected taxes.[3]
Section 12(2) and (3) of theOfficial Secrets Act 1989 define the expression "Government Contractor" for the purposes of that Act.[4]
TheUnited States federal government seeks to select contractors in a way that is fair to all and promotes thefree market system. Contractors are selected viaFederal Acquisition Regulations which are intended byCongress to ensure that taxpayer money is used to benefit the public or nation as a whole. Contractors must learn how to operate within these regulations.[5]
Prime contractor is a term defined in the US law.[6][7] Statutory definitions of prime contract, prime contractor, subcontract, and subcontractor are in41 U.S.C. § 8701.[8] The prime contractor term was already defined before the 8 March 1946 passage ofAn Act To eliminate the practice by subcontractors, under cost-plus-a-fixed-fee or cost reimbursable contacts of the United States, of paying fees or kick-backs, or of granting gifts or gratuities to employees of a cost-plus-a-fixed-fee or cost reimbursable prime contractors or of higher tier subcontractors for the purpose of securing the award of subcontracts or orders. (Pub. L.Tooltip Public Law (United States) 79–319, 60 Stat. 37)
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