Import/Export Management And Small Business Federal Government Contracting

Because the world has become tightly wired technologically and the current economic situation ties us inexorably to foreign economies, it is likely small business will encounter the import/export process either on the selling or the buying end of federal government contracts involving foreign countries. This is particularly true with Foreign Military Sales (FMS) contracts through DOD and services contracts with civilian agencies such as USAID.

Key to your success will be the development of links to buyers or sources in other nations. You may have gotten the idea that it is a simple and perhaps easy enterprise to get into and successfully perform. It is not in my experience any such thing. Companies who are successful evolve contacts and product relationships in foreign countries and in the US that take careful and businesslike approaches. You will find yourself importing to this country by exporting from other countries and vice versa. There are laws and processes that apply in both domains governing taxes, duties and the import/export process.

It is recommend that you research thoroughly the answers to the following questions:

(a) What are the specifics of the equipment and supplies you are becoming involved in? (Manufacturer's part number, performance specification, unique qualities and market potential) What are the distribution channels that currently exist; is there a product warranty and are their spare and repair parts involved?

(b) Who buys the equipment and supplies in the United States and in countries you intend to sell to. (commercial consumer, government agency, large business, hospitals, military etc.) Do you plan to do market research on the potential demand for a product before you buy it? My advice is that you should - before you buy. I further advise that you research practical marketing, sales and distribution channels for a product before you buy it or import it. What are the possibilities of locally retailing it yourself?

(c) What are the laws and regulations regarding the movement of equipment and supplies? How are they taxed in the US and how are they taxed in foreign countries? Are they regulated by US or foreign countries? Are licenses required to either import or export the items? The answers to all these questions vary with the product and the US State Department and US Customs and Border Protection will have those answers once you identify the equipment and supplies. The links to the associated web sites are in the section below entitled 'THE REGULATORS'

(d) What service can you perform in (a)-(c) above? What value can you add to the process? Do you have special channels to either a customer or a source for the supplies and equipment? Do you have special knowledge or do you know others with special knowledge of these equipment and supplies, customers and sources which you could involve in creating or designing a niche no one else is filling or offer these items at a price attractive enough to generate volume and profit for your business and beat the competition.

(e) Who is your competition and how are they performing (a)-(d) above? Your business involves offering the service of importing equipment and supplies to fill the need in the US from sources out of the country and the other way around. You must develop an available niche that other companies do not fill, either by having lower prices, more and better sources, or a low overhead cost for handling the business; faster delivery, better product warranty, parts service and replacement, all play in the equation. Your market plan must address the reliability of your sources in other countries and the US, the quality of their product and how well they support their product in countries other than their own.

SHIPPING AND FREIGHT FORWARDERS

Along the way be particularly careful in your planning to research Freight Forwarders (FF). Use the Better Business Bureau (BBB) or other such government agencies to research the experience the buying public has had with stateside companies you deal with. BBB company research capabilities on the web are free to the public. Carefully review FF terms and conditions and assess the liability arrangements in the event of product theft or loss for goods coming in from overseas.

A freight forwarder is your paid agent to safeguard your property. He is also registered to handle clearing US customs. Certain other FF specialize in dealing with foreign countries. He is normally the individual to which your overseas manufacturer ships you product or through whom you ship product to foreign countries. Relying on the manufacturer himself to ship, insure, handle export and import requirements is not a safe bet and shipping directly to a foreign country has no assurances of delivery.

The foreign factory producer has too much conflict of interest in simply getting you to pay his bill and move on and your expertise in clearing customs in a foreign country may be limited. Freight forwarder expenses must be added to those of the product you buy from the factory source. These expenses should be included in your business plan and in your product pricing prior to going to market.

BE CAREFUL

Be wary of networks and exchange sites on the web that offer to make you rich and handle all the arrangements. This is seldom the case. Check them out with the Better Business Bureau:

Better Business Bureau

INSURANCE

On the subject of insurance, I assume you have looked into business insurance. A Limited Liability Company (LLC) is a form of Subchapter 'S' corporation that usually experiences the lowest rates for insurance. Have you looked into becoming an LLC? Insurance is a must in the line of business you are pursuing.

THE REGULATORS

For research regarding exporting and importing goods to and from foreign countries please see the web site for the Bureau of Industry and Security out of the Department Commerce. It is the keeper of export administrative regulations and classification numbers. It also has a commerce country chart that shows taxes and duties and license information by country. 

Bureau of Industry and Security

The Office of Foreign Asset Controls out of the Treasury Department is also a site you will have to visit to see if there are any specially designated nationals or targeted countries that the US has regulations against selling to:

Sanctions Programs and Country Information

The US State Department and the US Customs and Border Protection regulate and assist in import and export matters. I strongly suggest you visit their web sites. The State Department controls high technology items and weapons through the International Traffic in Arms Regulation (ITAR). Export licensing under the ITAR can be a lengthy process. Services and technical data as well as products of a weapons or high technology nature requiring licenses appear on a controlled items list in the ITAR. A company can unwittingly make an illegal export of technical data simply by conveying the wrong specifics regarding a controlled item to a foreigner over the phone. 

For an excellent article on ITAR compliance please see:

ITAR Compliance: What It Is, Who Needs It, and the Penalties for Ignoring It


The web site for the US State Department and US Customs and Border Protection respectively are as follows:

U.S. Department Of State

U.S. Customs and Border Protection

You will need to research the above regulatory sites as appropriate once you identify the specific products in which you intend to deal. It will be necessary to determine licensing, declaration, tariffs, taxes and trade implications. All these factors should be fully documented in your business plan before you undertake operations in a product area.

FINANCE AND CREDIT:

Finally your business plan will be your best long -term asset in establishing your credibility with the banking community and with prospective investors. My advice is to start small and slow, with minimal personal investment and begin dealing in products only after you have a well developed business plan and market research indicates they will be profitable. As the business establishes itself, a demonstrated cash flow and projected earnings statement can be used as leverage with a good business plan to achieve a small business loan, perhaps working with the SBA for a guarantee. Small business credit cards are a possibility if you can work the interest rates into your planned expenses and recover them in your product pricing.

Your planned banking arrangements should involve setting up accounts that involve automatic currency conversion features in the countries you plan to do business in.

I recommend being careful not to make your inventory a burden. Carrying excessive financed inventory without associated sales to pay the bills is one of the biggest traps you can fall into. Also remember many products have a shelf life which must be considered in the storage environment.

Making an Astute Bid/No Bid Decision

Government contract proposal preparation is time consuming and can be costly. Meeting the agency Request for Proposal (RFP) requirements with a responsive proposal can be well worth the effort if a winning strategy can be formulated. 

When considering submitting a proposal to a given government solicitation, conduct a bid/no bid exercise. By going through that process you will begin formulating your win strategy or you will discover that you should not bid this job for lack of such a strategy.

 The elements of the process are discussed below in the form of questions to ask yourself against topics for key consideration.  Affirmative or non-affirmative answers to the topical questions and ability to fill in the blanks below will drive your decision to bid or not bid a solicitation.

A. Customer:
Do you know this customer? Yes __ No ___
Does this customer know you? Yes___No ___
Do you have any idea of the available funding for which the customer has obtained authorization? Yes___No ____
Specify the marketing contacts which have been made with the customer thus far:
Date:
Contact:

B. Supplies and Services:
Specify the supplies and services to be delivered in the prospective contract:

Line Item (s):

Description:

Are supplies and services in the RFP Statement of work a good match for what the company sells? Yes ___No ___
Is the RFP Statement of Work specific enough to identify risks? Yes____No ____
Is the RFP schedule specific enough to determine the delivery requirements? Yes____No____
Can the delivery schedule in the RFP be met? Yes ___No _____
Specify the delivery schedule for the prospective contract:

Line Item:

Delivery Date:

C. Contract Type/Value/Start/End Date:
Does the proposed contract type (FFP, CP, T&M, etc) suit the nature of the work? Yes___ No ___
Specify the contract type for this program: _______________.
Are there any unusual terms and conditions specified in the government RFP? Yes ____No___
Specify any unusual terms and conditions: ___________________________________________

What is the Rough Order of Magnitude (ROM) value of the prospective contract? $___________.
What is the anticipated start date of the contract? ________.
What is the anticipated end date of the contract? ________.

D. Company Strengths: 

Is this prospective contract for effort in which the company has strong skills? Yes____No ____
Specify the strengths the company will utilize in meeting the product specification or statement of work:

E. Company Weaknesses:

Are there any company weaknesses in meeting the product specification or statement of work? Yes ___No ___
Specify any weaknesses for which the company must compensate and manage associated risks:

F. Teaming Arrangements (If any):
Does company plan to team with other companies in the performance of the prospective contract? Yes ___No ___
Identify the other team member companies:

Will your company be a prime or a subcontractor? Prime___Subcontractor ____
Have NDA's and Teaming Agreements been executed? Yes____No ______

G. Competition:
Is this a sole source set-aside procurement to your company? Yes____No____
If this is a competitive procurement, identify the prospective competition and their associated strengths/weaknesses:

H. Win Strategy:
Identify the proposal features and themes which will be utilized in the proposal as discriminators to win this program:

Management:

Technical:

Cost:

I. Proposal Budget:
Estimate the man hours and dollars for proposal labor, any travel expenses, shipping, packaging, samples and other expenses associated with preparing the proposal. The government does not reimburse the contractor for proposal preparation under the subsequent contract. Proposal expenses must be included in the cost center overhead or G&A and accounted for as marketing expense allocated across the cost center or the company.

Labor Hours __
Labor Dollars $______
Material _______
Travel _______
Reproduction _______
Samples (if any) _______
Packaging/Binding/Ship _______
TOTAL $_______

J. Analysis: 

If you can answer "YES" to at least 5 of the questions under paragraphs A through D above, it is likely you should bid this procurement.

If the answers to 7 of the 10 "YES" or "NO" questions under paragraphs A through D above are "NO" it is unlikely you should bid this procurement unless the answer to G is "YES". Even then, examine your answers and carefully review whether this business is suitable for your company. 

If the answer to E is "YES", it is unlikely you will bid this procurement successfully unless the answer to G is "YES". Even then, determine how you will overcome the weaknesses you have identified in your company associated with doing this work before you decide to bid it. 

Carefully compare the competitive analysis under Item G to the win strategy under H before you make your final decision.

K. Decision: 

BID _____

No Bid _______

Multiple-Front Marketing In Small Business Federal Government Contracting

INTRODUCTION:

Your enterprise must market on several targeted government contracting fronts to be successful. Simply registering as a federal government contractor or acquiring a small business set aside designation does not mean that contracting officers will find you or that larger corporations will seek you out as a teaming partner. A GSA schedule or a multi-year IDIQ umbrella contract, purchase agreement or similar vehicle may look promising, but they are really no more than hunting licenses. The game must still be bagged (targeted sales of specific products or service projects to customers).

The prudent small business will target agencies and teaming partners that best fit its products and services, positioning itself to acquire advance information on requirements and displaying capabilities by conveying early solutions to customer decision makers. This article will suggest techniques, approaches and tools to conduct a multi-front, targeted, requirements-driven, marketing campaign for small business federal government contracting.

SELECT YOUR SMALL BUSINESS SET ASIDE DESIGNATIONS CAREFULLY

Your small business designation by North American Industrial Classification System (NAICS) Codes should be thorough and as comprehensive as possible when you register at the "System for Award Management (SAM) web site. Make sure your registration has the maximum number of codes for which you qualify, since the whole federal procurement system rides on those codes. Insure the narrative description of your services is complete as well. Please see the following link for further information on registration:

Federal Government Contracting Registration

The sub-categories of small business set-aside certifications should be chosen carefully and based on your company ownership and specific market research into which categories the agency or prime contractor favors, what their small business contracting plan includes in the way of targets and what their track record has been in awarding contracts. Good information on awards can be gleaned from the federal web site on federal government spending at:

USA Spending

You can also check the SBA small business goaling report at:

SBA Goaling Reports


For further details on each of the 7 small business set aside designations please see the following link:

Small Business Set-aside Programs

TARGET REQUIREMENTS EARLY

Government agencies, like companies, have long range plans and budget cycles. Keep abreast with the latest developments in trade magazines and journals regarding government contracting trends within agencies to develop and market solutions for anticipated requirements.

Monitor agency web sites and forecasts. Be constantly aware of the annual federal budgeting cycle, its development progress in the executive branch and its approval status in Congress. Agencies push to commit excess funding late in the fiscal year and at the same time forecast their next year needs for submittal to higher authorities. In the 1 October to September 30 fiscal year cycle, July, August and September are prime marketing periods.

Watch SAM for sources sought notifications, requests for industry comments on draft RFP's and similar early indications of programs taking shape which will later be advertised in full solicitation. Go after them early enough to market and get them set aside for your small business designation and influence the development of the project with constructive input creating a presence in the eyes of the customer and prospective teaming partners.

MAKE PRUDENT BID/NO BID DECISIONS

Develop a good fit in your bid/no bid decisions. The only thing worse than losing a contract bid is winning it and performing poorly, creating negative past performance notations on your record. Know what your company can do and cannot do. Acquire skilled personnel through contingent hire agreements or incumbent work forces as you grow and carefully choose what you bid. For information on bid/no bid decisions and proposal preparation please see the following link:

Government Contracting Bid/No Bid and Proposal Preparation

EXPLORE SERVICE CONTRACTING AND TEAMING

Other than FAR Part 12 Commercial Contracting for off-the-shelf items, entry into federal government contracting for small business usually occurs through service contracting direct to an agency or teaming as a subcontractor with another firm for a major program. Even for commercial products, particularly new ones on the market, the best way to introduce your solution to a customer is to become involved in a service contact supporting the client's operations.

With regard to larger government contracting corporations to whom you could subcontract, cover the waterfront. Find out what they are bidding and aggressively market a piece of the action as a small business. Find the locations for the largest government contractors nearest you and register at their supplier business sites. Everything they buy for their facilities, their personnel and their operations counts toward the small business goals required contractually of them by their enormous government contracts.

Research their web sites and locate their small business liaison officers. Make appointments and visit them. While visiting, seek the names and titles of managers internal to their companies who manage prime contracts involving expertise your business can supply. Go after those managers.
Form teaming agreements early with good industry partners and begin to develop a winning message to the customer while he is defining his program. The following article provides further details on teaming:

Teaming in Small Business Contracting

OBTAIN A GSA SCHEDULE

The below link is an article on how to apply for and utilize a GSA schedule:

Achieving and Utilizing A GSA Schedule

There are 3 major challenges to going through the GSA schedule application process:

1. Finding an open solicitation that fits your product line

2. Establishing a good working relationship with the GSA Contracting Officer on the schedule solicitation and getting his/her assistance in working the system expediently.

3. Presenting viable, auditable cost history on what you have previously sold your products for to pass the cost/pricing audit portion of the process.

Most companies continue to bid work to the government through FAR Part 12, Commercial Contracting procedures or other contract vehicles discussed this web site while their GSA schedule application is pending. Please examine this site for articles on teaming, marketing, IDIQ contracts, negotiations, subcontracting and many others.

Remember there are thousands of companies out there going through the system, so you will have to be patient. Very few applicants get through it in any less than 6 months. A GSA Schedule is a very valuable item to achieve, but it takes time to do so and there are other forms of government contracting you can use while your application is in process.

DEVELOP A DYNAMIC CAPABILITY STATEMENT

A capability statement (CAPE) is an absolute necessity. It contains the specific information a contracting officer needs to place an order. This information includes such items as your D&B Number, your government registration numbers, your North American Industrial Classification System (NAICS) codes and the like. These items are selected or provided by you or determined by the system when you register your company for government contracting.

Your electronic capability statement (CAPE) for government contracts should be short and hard-hitting. It should be 1or 2 pages and should highlight the salient points of your products and offerings, your personnel and your qualifications. Please see the following link for an example of a capability statement:

Your Capability Statement

WRITE RESPONSIVE PROPOSALS

Writing a winning proposal is an art form. It takes practice and the more proposals you prepare and submit the more artful you will be. You will find yourself utilizing the same materials over again on successive proposals. Management approaches, personnel profiles, win strategies and other major components of a good submission will fill your library and extend your CAPE to specific solutions for specific customers.

The following link contains guidance on writing effective proposals:

Proposal Preparation

SUMMARY

Your reputation as a reputable performer in the small business federal government contracting community is important. Be selective and high performing. Agencies, past performance data bases and other companies will be observing you, recording your performance and passing the word along to others directly and indirectly.

Then insure your web site, your capability statement and your marketing plans are maintained current alive and dynamically reflective of your successes as you pursue new business and carefully develop your library of past performance records by project with accessible profiles to use in your government proposals.

Please see the following link on meeting the past performance requirements challenge in federal government contracting:

The Past Performance Challenge


ABOUT THE AUTHOR:

Small to Feds is maintained by Ken Larson a Veteran of 2 tours - US Army Vietnam.

As a Volunteer Counselor, he assists many small businesses with their planning and operations processes.

Subsequent to his military service Ken spent over 30 years in federal government contract management and 10 years in small business consulting. He gets many inquiries from small companies wishing to enter or enhance their position in federal government contracting or grow their commercial enterprise. This site is intended to assist in answering those questions and others small businesses have in developing and operating a successful firm.

Those wishing a free counseling session may contact Ken at:

Ken Larson MicroMentor

Federal Government Contracting Small Business Set-aside Designations

A small business set-aside designation can be a valuable tool if adequately documented, registered, certified and prudently used for bidding work that your enterprise is capable of performing successfully.

The following are the major small business set-aside designations in federal government contracting:

1.  Small Business - Established by North American Industry Classification (NAICS) Code for all categories of government business (Please download the "SBA Small Business Size Standards" SBA Table of Size Standards for further information). Federal contract solicitations  have a NAICS Code assigned to them when thy are registered at the below web site:

System for Award Managment (SAM)

2. Minority Business Enterprise (MBE) - A  good interim designation while an 8(a) application is in process for minority-owned companies:

National Minority Supplier Development Council MBE Information

3. Woman-Owned Business - Applicable to Women-Owned Businesses only:

SBA Woman-Owned Business Information and Application Site

4. Veteran-Owned Business - Applicable to Veteran-Owned Businesses only

SBA Veteran-Owned Business Program Information

5. Service Disabled Veteran-Owned Business - Applicable to Service Disabled Veteran-Owned Businesses only

SBA Service Disabled Veteran-Owned Business Information

6. Small/Disadvantaged Business SBA 8(a) Program - Requires 2 years in business and a lengthy application process with the SBA at the following web site:

SBA 8(a) Information and Application Site

7. Historically Under-Utilized Business (HUB) Zone Located - Pertains to small businesses located in geographic areas with a historical record of low government contracting. This designation requires application at the following HUB Zone Site Web Site:

Hub Zone Information and Application Site

QUALIFICATIONS, REGISTRATION, CERTIFICATIONS AND REPRESENTATIONS

To qualify as a small business for a given solicitation an enterprise must have registered at the System for Award Management Web Site under the applicable NAICS code for the procurement and meet the SBA eligibility size standards for that code.

A small business certifying under the above must have individuals qualifying for the designations with at least 51% ownership interest and an operating role in the company. 60% is recommended to avoid the appearance of a front. Silent partners and investors without qualifying status or an operating role in the firm do not count toward the designation. It is suggested that ownership interest be specified by name on the articles of incorporation with the state and by % of ownership in an operating agreement or similar document.

To qualify as a HUB Zone Enterprise the business must be located in a HUB Zone and a qualifying percentage of the members (owners or employees) of the business must also live in the applicable HUB Zone.

SUMMARY

Carefully select your small business designations when preparing your business and marketing plans for federal government contracting. Keep in mind that self-certifications are verified through records checks and site visits by contracting officers, DCMAO and Source Selection Boards for federal procurements before contract awards are made.

Unsolicited Government Contract Proposals - A Multiple Stage Challenge

INTRODUCTION

Most enterprises in government contracting encounter the possibility of submitting an unsolicited proposal.  The perceived opportunity arises as a result of observing a requirement that the company could uniquely fulfill, but for which the government has yet to issue a formal solicitation.

These opportunities are normally  large enough so they can't be sold off a GSA schedule or an existing contract delivery order, and do not fall under FAR Part 12, "Commercial Contracting”  

CHALLENGES AND STRATEGY

Since your product or service is not on the funding docket with the agency it does not have a funding I.D. Your job is to get the technical and project personnel enthused enough about it to carve out a niche in their program area and support a funding request for it. They do so by  to obtaining a solicitation I.D; money and authorization to buy from you.

The key to achieving the above is a good presentation revolving around your capability statement but supplemented by a pitch that should emphasize specifically how you understand the agency mission and that your offerings could further it.

Your objective should be to submit a hard hitting summary with a proposal in letter form, protected with the standard proprietary markings, through the contracting officer with whom you have already had discussions to the technical lead in the agency and request a meeting to make the full pitch. 

WORK YOUR PROPOSAL IN STAGES

The following link is the Federal Acquisition Regulation (FAR) guidance on unsolicited proposals:

FAR Guidance - Unsolicited Proposals

Be advised that you need to assert your rights in technical data and software on anything you give them that is product oriented because you have made an investment in it. When they start putting money into its further development you find them pressuring you for a deal on licensing and free use of it in exchange for funding and orders for services. That is the normal course of events and it can be managed.

Another approach is to carefully locate a platform provider that could use your product or services and team with them on a larger scale, bundled program that may be going to formal solicitation.

In either of the above instances, carefully protect your idea using the tips in the below article:

Protecting Intellectual Property

You will note that the FAR guidance specifies that cost and pricing data must be submitted so the proposal may be evaluated.  Naturally you must provide that ultimately, but it is recommended you do not do so with your initial proposal submission.  Simply state you will be pleased discuss with the agency the scope in terms of types and quantities of product and services, after which you will price the result of their input for planning purposes, pending a formal solicitation with funding commitment.

If the agency or a prime gets enthused, they will ask for a Rough Order of Magnitude (ROM) estimate for planning and funding purposes on what your product or services may cost. Be careful to make it conservative because those things get cast in concrete and caveat any ROM with a written statement that your ROM is not a formal commitment to a contract and that you will be pleased to commit with a formal proposal from the government through a duly authorized contracting officer under a funded solicitation.

I have had clients that have even been requested by agencies to write a statement of work for such a solicitation

The government fiscal year is a key driver in terms of available funding and getting it earmarked. Keep in mind funding for a program using your idea or a platform using it must fall within a funding cycle that begins 1 October, picks up heavily in July and August and must conclude in September.

CONCLUSION

Success in unsolicited proposals is a process:

1.   An initial unsolicited proposal submission after focused marketing is the gateway

2.   A strong presentation to the customer in person is key.

3.   Rough order of magnitude (ROM) pricing permits planning by the customer

4.   A funded solicitation is a green light for a firm contract proposal.

5    A Formal proposal submission under a funded solicitation, committing to negotiable price, schedule and delivery terms wins the contract. 

In addition to the articles linked above, please review the following 2 articles for further guidance:

Pricing Small Business Federal Government Contract Proposals

Contract Baseline Managment

Practical Intellectual Property Management for Small Business Federal Government Contractors

INTRODUCTION

We have previously discussed Intellectual Property (IP) and Proprietary Data (PD) protection for small business:

Protecting Intellectual Property

Difference Between Freelancer and Contractor

The above posts discuss rights in technical data and software assertions, non-disclosure and teaming agreements as well as proprietary data protection involving the government and industry partners.

This article expands those discussions by offering practical operations guidelines involving IP protection for small business government contractors.

DEFINITIONS

The World Intellectual Property Organization defines IP as:

“….creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.

Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs.    Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs.”

What Is Intellectual Property?

OWNERSHIP ENCOUNTERS AND CONTROLS

Bringing IP into existence requires that the tangible property as a result come under control.  For small business this is usually brought about by a series of encounters with IP.  They are discussed below in the relative order in which a small business encounters them.

Company Founding Personnel

A small business usually encounters IP and PD concerns when it is formed.  The operating agreement between the founders must address these matters from the perspective of who brings property to the venture and who owns it as well as the rights to the property developed thereafter. A typical operating agreement may be downloaded from the Box Net “References” cube in the right margin of this site.  Please examine it as a framework and add those elements that are unique to your enterprise.

Employees and Contractors

The next encounter usually entails employees or contractors who apply for work.  It is wise to inquire as a standard practice, and as part of an employment agreement or contract, whether or not an individual has signed a non-compete or proprietary data agreement with prior employers.  If they have, acquire a copy of the agreement and assess whether or not the employment of these personnel poses a risk of IP violations in terms of another company's property or their claim to ownership of what the candidate may develop on your behalf while in your employ. 

Make it clear in your agreements of hire and contracts that IP and PD that employees may participate in developing are the exclusive property of the company, that they will not own it and that they are expected to protect it, even when they leave your firm.

Industry Partners

Declare in your non-disclosure, teaming, and contract agreements the precise definition of the IP and PD ownership brought to the table and the exact share of ownership in subsequent development items.  Most firms use the efforts of their employees (labor records) as a basis to make these distinctions, but further specificity may be necessary on complex projects. 

 

Government Agencies and Prime Contractors

Ensure your policies and practices utilize assertions to document the ownership of IP and sound job cost accounting records for any IP developed at company expense, either in the past or during the course of a contract. The link below discusses the following major rights assertions in detail:

Unlimited Rights

・ Government Purpose Rights (GPR)

・ Limited Rights

・ Restricted Rights

・ Small Business Innovation Research (SBIR) Data Rights

・ Specifically Negotiated License Rights

・ Prior Government Rights

・ Commercial License Rights

Rights In Technical Data and Software

CONCLUSION

Intellectual property and proprietary data protection should be tailored to your organization, its industry relationships, people and practices.  It must grow as the company grows, adapt to changing conditions and be ever-sensitive to risk.

The best intellectual property protections are well understood, practical, teaming relationships among partners, employees, industry and government.  All sides in such relationships lose if disclosure or violations occur. 

Establish sound operations practices and train to insure these practices meet the objectives discussed herein to protect your organization IP.