Government Contractors: DCAA, FAR and Other Compliance Issues

Running a small business is a challenge.  I saw a statistic the other day that less than half of small businesses survive to see their 5th birthday.  If it isn't enough facing challenges of cash flow, business development and infrastructure to confront the new business owner there can be other obstacles like compliance with government regulations.  Government regulations take many forms and meanings to the small business, depending on your business line and even your customer list.  A "standard" small business must concern itself with loans (bank, SBA, Angel funding, etc), taxes, municipal regulations, rent, lines of credit, equal employment regulations, minimum wage guidelines, vacation time, mandatory sick leave, cash flow, health care for employees, insurance and a myriad of other complex situations.  For instance, if you are a government contractor, you open yourself up to a lot more regulations.  When your customer is the US Government, there are regulations to go around that make things more complex.  Things like the Federal Acquisition Regulations (FAR), the Code of Federal Regulations (CFR), the Office of Management and Budget (OMB) directives, Agency directives, Defense Contract Audit Agency (DCAA) regulations and Defense Contract Management Agency (DCMA) to name a few can add layers of complexity on the small business. 

I saw a couple of articles this week that would add to this list of complexities for small business.  One is the recent increase in the Federal minimum wage.  The other is a local regulation that only affects companies in one city (albeit a large city: New York) related to Eared Sick Time.  A related topic, that I won't go into here, is the implications on a small business as a result of the Federal Health Care Act (or Obamacare if you will). 

The Department of Labor released a proposed rule on June 17th, 2014 to implement Executive Order 13658 to increase the Federal Minimum Wage to $10.10 by 1/1/15.  This is applicable to all government contractors.  The implication here is that perhaps some government contractors were bidding on government jobs and paying some of the labor at less than the Federal Minimum wage.  This will now be a term on the contract, enforceable by the government.  Again, another regulation to be concerned with. 

Recently New York City implemented an Earned Sick Time Act to protect workers rights in the city.  It means a couple of things to the employer (the small business) as summarized in the following table:


Number of Employees 

Amount of Sick Leave per Calendar Year

Paid or Unpaid Sick Leave

Rate of Pay

5 or more

Must work 80+ hours a calendar year*

Up to 40 hours


Regular hourly rate but no less than $8 per hour (minimum wage)


Must work 80+ hours a calendar year

Up to 40 hours


Not Applicable

1 or more domestic workers

Must work 80+ hours per calendar year and have been employed by the same employer at least 1 year

2 days


Regular hourly rate but no less than $8 per hour (minimum wage)

Again, more regulations and "headaches" for the small business owner.  My thoughts on this are that the back office tasks are becoming so onerous to the small business that they definitely need professional help in this area.  Outsourcing the back office tasks (including accounting, compliance, contract administration, HR and other tasks) can relieve the owner of most of these headaches and allow the business owner to concentrate on what makes the business grow and/or make more money.  Experts like the ReliAscent team can handle all these back office tasks quickly, efficiently and reliably primarily due to the knowledge base and experience levels of our personnel.  This means less time overall spent by the small business, more focus on the real objectives of the business, lower overall cost, higher growth and higher profits.  Please let me know if you would like to discuss in more detail.