Are state and local government contracts governed by the same rules as federal contracts?

Many of the rules that govern state and local government contracting are modeled after the Federal rules. Most states and localities have rules that require some form of competition before the state or local government awards a contract. Many states and localities limit the availability of true breach of contract damages through the inclusion of "changes" and "termination for convenience" clauses.

There are many important distinctions in states and localities contract practices that firms must take into account. Unfortunately, there are so many differences in procurement rules from state to state and locality to locality that makes it impossible for us to cover here.
A firm wishing to do business with a state or local government must pay particular attention to the rules that govern procurements (e.g., the rules of competition), claims entitlement and pricing, and dispute resolution.

It is our strongest recommendation that prior to rushing to bid on any Government contract that you turn to an attorney to advise you on the special restrictions and complexities involved or if you expect any parts of the transaction to require special treatment in this very complex area of law. Otherwise you may "win" a contract, only to learn a very expensive lesson instead of earning a profit.