Federal Contracting Compliance 101
What you need to know...
The United States Government is the largest consumer in the world. They purchase more goods and services than any other entity. They are one of the best customers in the world that a small business can have as they always pay on time and it seems their demand is always increasing in some capacity. They will even pay for a portion of your overhead. As such, they demand preferential treatment as a customer. They not only have a long list of terms and conditions for which they expect their suppliers to comply with, they also can dictate how a company does their accounting, their billing and other seemingly standard business tasks. This is the cost of doing business with the world's number one consumer. Companies that do not prepare for and then comply with these requirements, will not be viewed as suppliers of value to the government and will not be doing continuing business with the Government.
What You Need To Know About The Industry and Compliance
The rules for supplying goods and services for the United States Government are quite detailed and found in many places. The basic rules are found in the Federal Acquisition Regulations (see FAR below) and there are a number of other interactive regulations found in the Code of Federal Regulations, the Office of Management and Budget as well as each agency modifying these basic requirements to fit their individual agency mission. This smorgasbord of regulations is very intertwined and can be confusing to the uninitiated.
What is the FAR?
The Federal Acquisition Regulations (FAR) are a set of detailed requirements that govern how the government will purchase items and services. The FAR is 53 sections and over 2,000 pages of fine print covering everything from the types of contracts, to how contracts are awarded to terms and flow downs to appear on contracts. The cross references many times and sometimes to external regulations. It can be very difficult to figure out how to comply with for the uninitiated.
Who is the DCAA, and why do they matter to me?
The Defense Contract Audit Agency (or DCAA) a group within the Department of Defense (the largest budget within the Federal Government) responsible for auditing contractors. Their primary guide in these audits is the FAR and the DCAA Contract Audit Manual. There are many different audits they are responsible for including everything from pricing proposals to incurred cost proposals to full system audits. The risk of audit is up to the government, usually determined by a combination of contract type, size of award and apparent financial risk. The DCAA does do some work at the request of other agencies but their primary responsibility is auditing contracts and financial systems/reports of contractors supplying to the Department of Defense. According to FAR requirements, they will have full access to a contractors records in order to verify that the US Taxpayer is getting value for the money they spend.
Why Would a Small Business Like Mine Need a Compliant Accounting System?
The type of contract (cost type awards, many T&M awards and some Fixed price award require compliant accounting systems) as well as the size of the contract will normally dictate whether the government wants to see a compliant accounting system. The government can also request a compliant accounting system if they have some reason to mitigate their risk. This will be reflected in the contract terms and conditions.
How Can I Install & Operate a Compliant Accounting System?
For a new company, it can be rather painless to start a government compliant accounting system, as long as the company realizes there will be some procedures and policies required from the start that might seem "different". For an existing company, it can be a major paradigm shift for the company as the compliant accounting system for government contracting is sometimes referred to a "Job Cost Accounting System on steroids". Either way, ReliAscent has been able to help hundreds of companies in both of these categories with successful implementation of such a system.
Whether your business is located here in Colorado, across the United States or even overseas, ReliAscent can help. Through the use of modern electronic tools, such as e-mail, video conferencing, cloud sharing of files, cloud hosting of files and other virtual capabilities, ReliAscent can operate as if they were just down the hall. A complete, virtual, compliant accounting department can be affordable by even a small business.
How do I Get Help Understanding Contract My Contract Terms & Conditions?
Federal Contracts and Grants can be very difficult to understand for the uninitiated. ReliAscent has hundreds of years experience in Federal Government Awards management & administration and can help companies navigate this difficult myriad of regulations. FAR compliance is something that ReliAscent specializes in. Navigating through the maze of government regulations (FAR, Agency Specific FAR, CFR, OMB regulations, DCAA requirements, etc) is something we enjoy and understand. Simplify your life and outsource this task to ReliAscent and allow yourself the luxury of concentrating on your expertise to grow your business. Click the button below to get your DCAA Compliant Accounting System set-up:
Why a Small Business Should Outsource a CFO...
ReliAscent also can provide outsourced Executive Management services to a small business. A small business usually can't afford a full time CFO but this is the most critical stage in a business where this expertise is warranted more than ever. A CFO that can manage cash flow effectively as well as help form strategic direction for the firm can mean the difference between the firm growing and the firm failing. In addition, since ReliAscent has a collection of former CFO, Program Manager, Contract Administration and other related executives from the industry, you not only rely on one individual but benefit from a collective opinion on critical issues. Normally a small business would not have access to such powerful help.