The Problem With FARS Compliance
Federal contractors don’t lose contracts because of capability — they lose them because of compliance. Falling short on FARS isn’t paperwork, it’s lost revenue, frozen cash flow, damaged reputation, and in some cases, terminated awards. Decision makers who understand this risk can act before it becomes irreversible.
What’s Really at Stake?
Case Example: A $12M IT services firm was dropped from a subcontractor pool because they couldn’t demonstrate compliance with FAR Part 52 clauses. Months of pursuit, erased by a missing policy document.
Case Example: A construction contractor lost $450K in unreimbursed costs after their indirect cost allocations were challenged under FAR Part 31. Weak billing controls drained profits.
Case Example: A logistics company faced a DCMA audit. Without documented compliance, what should have been routine became a four‑month crisis, delaying payments and halting new awards.
Red Flags Leaders Can’t Ignore
Policies Without Practice
Billing or ethics policies exist on paper, but staff aren’t trained to follow them. Auditors look for evidence, not binders.
Weak Accounting Controls
No segregation of direct vs. indirect costs or missing CLIN reporting. Invoices stall, cash flow suffers.
Cybersecurity Gaps
Even civilian contracts require FAR 52.204‑21 compliance. Missing basic access, monitoring, and backup controls can trigger disqualification.
Subcontractor Blind Spots
Primes increasingly demand documented flow‑downs. If your subs fail, your contract is at risk.
Why Decision Makers Must Act Now
Executives are measured on growth, profitability, and reputation. FARS compliance touches all three. By the time a contracting officer raises the question, you’ve already lost leverage. Proactive compliance is no longer optional — it’s the price of staying in the game.
- Protect revenue streams by eliminating eligibility risks.
- Safeguard profitability with accurate cost controls.
- Build trust with primes and contracting officers.
- Avoid emergency audits that cripple delivery teams.
Act Before It Becomes a Fire Drill
Most contractors wait until an audit notice or RFP deadline to scramble. By then, it’s too late. Address compliance now, and turn it into your competitive advantage. Nexxus GovSec helps leaders move from reactive firefighting to proactive readiness — and that shift changes everything.
Book a 15‑Minute Intro