DCAA Compliance Blog

Government Contracting News and DCAA Information for Contractors

ReliAscent® LLC specializes in FAR compliance, DCAA compliant accounting, and government contract management/administration for Federal Government contractors and grantees.  In our DCAA Blog, we discuss the latest government contracting news from the Federal Government, the DCAA, and DCMA.

While the best way to maintain compliance with government requirements is to hire our experts, we hope our blog gives you some valuable insight into this complex environment.

We hope you will visit and take part in the discussions on our blog on a regular basis. If you ever have any questions or would like to discuss how our experts can help, do not hesitate to contact us at any time!  

To browse our extensive library by topic, use the form to your left and search by tags.

DCAA Compliance & Accounting Services

Government Shutdown – Déjà vu All Over Again...

Posted by Dave Donley on Fri, Jan 19, 2018 @ 09:23 AM

Federal Government Shutdown

As of this writing, the U.S. is scheduled to shutdown at midnight, tonight. One of the first things you learn in government contracting is something called the Anti-Deficiency Act, first enacted in 1870, which says the government can’t obligate expenses unless funding has been appropriated through Congressional action. The Act also prohibits the government from accepting voluntary services not already authorized by law.

Without Congressional action for further appropriation of funds by midnight, the government is prohibited from paying personnel (except Congress, and other officials) and for other services, including grants and contracts. Fortunately, much of the funding provided by the government to our clients has already been appropriated and will continue to be funded.

Below is a list of what we know so far on the latest shutdown.

Payment systems

Payments through WAWF (DoD) could be delayed, however the Prompt Payment Act still applies, so interest penalties will be paid.

Grant draw down systems, such as the DOE’s ASAP and NSF FastLane are expected to be operating.

Contract funding

Contract funding for incrementally funded contracts could be disrupted during the shutdown. If contracts have costs or billings at or near the funded limit, contractors may not be reimbursed for performance during the shutdown period. However, if funding is sufficient, contractors are obligated to continue performance even if there is a government shutdown.

New Contracts and Grants

Contract and grant awards would likely be delayed due to a shutdown. Deadlines for submitting proposals or applying for grant may or may not be extended due to shutdown periods.

Government Support Contractors

Those who provide IT support or other personnel services to the government may be particularly vulnerable to a government shutdown. Support operations may be halted, so a contractor should expect a Stop Work order from their contracting officer. Employees may have to be either furloughed or charge to indirect labor accounts. Government employees typically receive back pay for shutdown periods. However, contractors may not.

Results May Vary

The impact from a government shutdown is wide-ranging. Government agencies have some latitude on what they can continue to fund during a shutdown period. As a government contractor and grantee, the implication for your business may vary widely from others. It’s always best to take up any specific concerns to your contracting officer who at this point is likely the most knowledgeable and your best advocate.

Contact Us

Bear in mind that even if the government avoids a shutdown tonight, continuing resolutions funding the government could be extended day-to-day or week-to-week, making this a chronic risk to contractors and grantees.

Feel free to contact us with your concerns and observations on this latest wild ride.

Topics: Federal Government Shutdown

“What Happened To My Profit?” - ReliAscent Featured Partner Blog (Part III)

Posted by Rich Busch on Wed, Jan 10, 2018 @ 09:36 AM

The following blog is the third in a series of special guest and ReliAscent partner blogs, contributed by Richard Busch of the Busch Law Firm, and Mike Anderson, of ReliAscent.  This series covers important topics ranging from an introduction to government contracting, to requests for equitable adjustments, risk management, contract change orders, and scope creep.  Additionally, our series will cover government financial assistance efforts, and how defense contractors--both small and large business (along with subcontractors)--can increase profits, improve their ability to strategically plan for the future and remain profitable.

By combining DCAA compliance and accounting expertise with defense contracting and FAR compliance legal representation and consultation, ReliAscent and Busch Law can help position contractors for financial success…

“Even if you’re on the right track, you’ll get run over if you just sit there.”  - Will Rogers.

Sitting on the tracks.jpg

Unmanaged “Creep?”…Make Informed Decisions and Manage the Work Effort

The meaning of Mr. Roger’s quote is especially important to a contract administrator for many reasons.  The administration of a government contract, as a prime or subcontractor, is a difficult balancing act between strict compliance of your contract obligations, pleasing the government client, balancing the budget, and timely performance—to name a few.  Even if you think you are “on the right track”---you must always be performance vigilant.  As Mr. Rogers inferred---being proactive in the administration of the work effort is of paramount importance. Successful performance, no matter what type of contract, Fixed Price or Cost Reimbursement, requires keen oversight of performance and cost control. 

The concern is NOT just with Government attempts to increase the level of effort; but the contractor MUST police its own actions.   Contractors may unknowingly degrade their profits or adversely affect the Government’s budget by not controlling their own performance through unilateral contractor actions that increase the cost of performance that may not be reimbursed.  Simply, being on the “right track” can still negatively affect profit if the contract performance contains unmanaged task “creep” cause by either contract party.

 

No Such Thing as a Perfect Contract---“Position Determines Perspective”

Whenever two or more people with separate interests are involved, there is a strong likelihood there may be different goals for the successful accomplishment of the contract work effort.  Real time changes thought to be needed to obtain the desired results; the cost of performance may “creep” beyond the initial understandings of the parties.  Take the time to proactively discuss and agree, as much as possible, on what is successful contract performance AND what the cost of performance should be expected.

 

Complete Understanding the Statement of Work

When creating a cost of performance management system, you must start with the “scope” of the contract.  If the initial contract “scope” is poorly defined, performance creep and increased costs will most likely result in subtle changes. Not all scope “creep” is readily apparent.  You may not recognize the change or fail to give it any thought; just like recording your daily expenses normally “shock” most people when they learn how their money is spent.  A “vague” SOW hurts cost control by opening the door to work scope creep.  Simply, you must determine what you are contractually bound to do and what the parties agree is success?  Comparing reality to the contractual performance baseline determines the profit on the work effort.

 

Type of Contract is NOT Always a Factor for Profit

The parties must determine whether the “scope” of the Statement of Work can be completed or is only a “level of effort” expected for successful contract performance?  In addition, is the Statement of Work based upon a firm government design or is the final product described through only performance criteria with little design?  Obligations and the allocations of risk defined by the Type of Contract must be understood and appreciated before the work effort is agreed upon.  Those understandings create the foundation to perform the SOW and achieve the profit expected. While these factors seem premature when discussing “profit,” these factors are the basis for your profit.

 

Assumption of Risk

Fixed Price contracts always obligate the contractor to accept the risk for the cost of performance and any resulting profit.   It is imperative to clearly understand the work effort, the risks of completion, contingencies, and the overall performance baseline. To avoid “scope” creep and the increased costs of performance in time or effort, the contract must be administered in a deliberate fashion.  Increased work effort, delays, uncalled for inspections, etc. must be identified and documented as soon as possible and a decision made whether you will accept its impact on the cost of performance or whether a change order is appropriate.

Cost Reimbursement contract performance can also affect the profit factor.  It is incorrect to think that just because all allowable costs are reimbursement, the fee cannot be adversely affected.  The amount of fee recovered is still measured by contract work effort.   Fee is NOT profit.  In reality, the “fee” may be proportionally decreased by the increases in time of performance, costs, and work effort that result from scope “creep” and its increased effort/time for performance.  The contractor receives less profit from scope “creep.”  A contractor is mistaken if they think the risk allocation in a cost reimbursement contract does not impact profit due to its failure to manage the costs of performance.

 

Who is Responsible for the Cost Growth and Its Effect on Profit?

The Government has the obligation to control costs; but still conduct business with integrity, fairness, and openness.  The Contractor must help the Government with those obligations.  In the recovery for scope ‘creep” to the performance baseline, the Contractor must not only prove “entitlement” but also “quantum.” Managing risk through sound cost accounting and performance oversight, along with documented contract administration, is the focal point for successful contract performance.  As William Arthur Ward stated, “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”  The Contractor must recognize the difference in and balance the need for “risk avoidance” verses “risk management.”

So, what does all this mean for the contractor that is trying to make a profit?  It means that managing a Federal Government contract is not just as simple as controlling one aspect, but rather, knowing what your contractual obligations are and managing all the elements of the performance baseline agreed upon by the parties.  How can the contractor insure that they make money, especially when the government or the contractor can unwittingly affect the profit margin on contracts?  The answer is experience.  Experience in how the “game” is played, as well as many years’ experience in playing the game within the rules.  Many businesses don’t have this expertise readily available within their organization.  It is always cost effective to consult the experts (like ReliAscent and The Busch Law Firm) that deal in the successful administration of government contracts in conjunction with the successful completion of the technical performance.  Corporate Management, contract administration, cost control consultants, legal considerations, and technical supervision, are integral parts of understanding how to successfully perform a government contract; especially on how to maintain your profit goals.

- Richard Busch
Managing Partner, Busch Law Firm LLC

 

Coming up: in part IV, “Request For Equitable Adjustment,” Rich discuss how contractors can make a money-losing contract profitable again. This piece is a must-read for small and large federal contractors alike.

Topics: contract change orders, Colorado Defense Contractors, scope creep, How to stay profitable with defense contracts, Request for Equitable Adjustment (REA)

ReliAscent Seminar Tomorrow: "Cost & Pricing in Government Contracting" 

Posted by Tyler Link on Tue, Jan 09, 2018 @ 09:15 AM

ReliAscent PTAC Seminar - Cost & Pricing in Government Contracting

SIGN UP NOW! ONLY 8 SEATS REMAIN!

ReliAscent's Mike Anderson will be presenting a seminar at the Westminster Office of the Colorado Procurement Technical Assistance Center (PTAC), tomorrow, January 10, as part of their Expert Training seminar series. This training session is a valuable opportunity for all federal contractors, and small businesses looking to sell to the "World's Biggest Customer."

Topic: Cost & Proposal Pricing

Summary: Mike will cover a number of important issues for government contractors, including: 

  • What’s the difference between cost and price?
  • What’s a fee?
  • Which accounting requirements are needed in case of an audit?
  • What are Indirect Rates?
  • What costs are allowable versus unallowable?
  • What percent profit is considered fair and reasonable?

This class will address these important topics and point attendees to other resources to build their knowledge of government contract pricing. 

Date: January 10, 2018 (9 AM - 12 PM)
Cost: FREE
Location: 12200 Pecos Street Suite 100, Westminster CO

TO RESERVE YOUR SEAT, CLICK HERE NOW!

We look forward to seeing you there. If you have any questions, please feel free to contact ReliAscent today!

Topics: PTAC, Indirect rates, DCAA Unallowable cost, Allowable cost, Colorado PTAC

DoD SBIR/STTR 2018.1/A Open For Proposal Submission Today!

Posted by Tyler Link on Mon, Jan 08, 2018 @ 10:01 AM

DoD SBIR STTR Program 2018.1 Now Open

ReliAscent would like to remind all contractors that you may now submit your Phase I proposals for the SBIR 18.1 and STTR 18.A Broad Agency Announcements (BAA) through the DOD SBIR/STTR proposal submission website. All proposals for this Announcement must be received by 8:00 p.m. ET on Wednesday, February 7, 2018. 

Important 2018.1/A Dates To Remember:

  • January 24, 2018: SITIS closes to new questions 
  • February 7, 2018: SBIR 18.1 and STTR 18.A close at 8:00 p.m. ET

SITIS Reminder:

Just in case you are new to the SBIR/STTR world, ReliAscent would like to remind contractors that though you are no longer able to interact directly with the Topic Authors, you are still able to view the relevant information and submit written questions through the SITIS Q&A system (in SITIS, the questioner and respondent remain anonymous, and all questions and answers are posted for general viewing).

Good luck on your proposals, and remember to contact ReliAscent when it's time to install and maintain your DCAA compliant accounting system!  Our experts have over 200 combined years of government contract accounting experience, and are here to help!

Topics: 2018 SBIR, DoD 2018.1/A SBIR/STTR

Upcoming ReliAscent Seminar: "Cost & Pricing in Government Contracting" 

Posted by Tyler Link on Wed, Jan 03, 2018 @ 01:43 PM

ReliAscent PTAC Seminar - Cost & Pricing in Government Contracting

ReliAscent's Mike Anderson will be presenting a seminar at the Westminster Office of the Colorado Procurement Technical Assistance Center (PTAC), on January 10, as part of their Expert Training seminar series. This training session is a valuable opportunity for all federal contractors, and small businesses looking to sell to the "World's Biggest Customer."

Topic: Cost & Proposal Pricing

Summary: Mike will cover a number of important issues for government contractors, including: 

  • What’s the difference between cost and price?
  • What’s a fee?
  • Which accounting requirements are needed in case of an audit?
  • What are Indirect Rates?
  • What costs are allowable versus unallowable?
  • What percent profit is considered fair and reasonable?

This class will address these important topics and point attendees to other resources to build their knowledge of government contract pricing. 

Date: January 10, 2018 (9 AM - 12 PM)
Cost: FREE
Location: 12200 Pecos Street Suite 100, Westminster CO

TO RESERVE YOUR SEAT, CLICK HERE NOW!

Hurry! Registration is filling up fast, and there are only 14 seats left!

We look forward to seeing you there. If you have any questions, please feel free to contact ReliAscent today!

Topics: PTAC, Indirect rates, DCAA Unallowable cost, Allowable cost, Colorado PTAC

ReliAscent Presenting at Colorado PTAC - "Cost & Pricing in Government Contracting"

Posted by Tyler Link on Wed, Dec 13, 2017 @ 11:21 AM

ReliAscent PTAC Seminar - Cost & Pricing in Government Contracting

ReliAscent CEO, Mike Anderson, will be presenting a seminar at the Westminster Office of the Colorado Procurement Technical Assistance Center (PTAC), on January 10, as part of their Expert Training seminar series. This training session is a valuable opportunity for all federal contractors, and small businesses looking to sell to the "World's Biggest Customer."

Topic: Cost & Proposal Pricing

Summary: Mike will cover a number of important issues for government contractors, including: 

  • What’s the difference between cost and price?
  • What’s a fee?
  • Which accounting requirements are needed in case of an audit?
  • What are Indirect Rates?
  • What costs are allowable versus unallowable?
  • What percent profit is considered fair and reasonable?

This class will address these important topics and point attendees to other resources to build their knowledge of government contract pricing. 

Date: January 10, 2018 (9 AM - 12 PM)
Cost: FREE
Location: 12200 Pecos Street Suite 100, Westminster CO

TO RESERVE YOUR SEAT, CLICK HERE NOW!

We look forward to seeing you there, and as always; if you have any questions about DCAA compliance, government contract accounting, or contract management, please do not hesitate to contact ReliAscent.

Topics: PTAC, Indirect rates, DCAA Unallowable cost, Allowable cost, Colorado PTAC

“Should We Do It?” - ReliAscent Featured Partner Blog (Part II)

Posted by Rich Busch on Thu, Nov 30, 2017 @ 01:39 PM

The following blog is the second in a series of special guest and ReliAscent partner blogs, contributed by Richard Busch of the Busch Law Firm, and Mike Anderson, of ReliAscent.  This series covers important topics ranging from an introduction to government contracting, to requests for equitable adjustments, risk management, contract change orders, and scope creep.  Additionally, our series will cover government financial assistance efforts, and how defense contractors--both small and large business (along with subcontractors)--can increase profits, improve their ability to strategically plan for the future and remain profitable.

By combining DCAA compliance and accounting expertise with defense contracting and FAR compliance legal representation and consultation, ReliAscent and Busch Law can help position contractors for financial success…

"The Key to Wisdom is Knowing All the Right Questions." - John A. Simone, Sr.

jump.jpg 

Should We Get Involved In the Government Marketplace?

The Federal Government spends trillions of dollars annually for a wide range of goods and services to meet mission needs.   Current events indicate that one potential factor in the economy will include stable or increasing government procurement budgets.  Construction and construction-related activity is a very large part of the Government’s budget and recovery plans.  In addition, along with the current depletion of the spare parts inventory for the military, technology advancements require up to date development programs and a consistent focus on maintaining our lead in state of the art equipment.   Finally, the Government has become increasingly reliant on industry and the commercial markets to provide the technical expertise to advance the infrastructure and the required solutions for mission success. 

While many of the largest defense companies and government contractors have an operational presence in Colorado, the majority of existing defense/government construction projects, contracting, and research/development opportunities remain untapped by Colorado businesses. The doors are opening, particularly in the area of construction, remodeling and refurbishment projects. High technology practice areas in Colorado include, but are not limited to: energy and construction; nanotechnology; space; software development. Colorado businesses, as well as the state legislature, are realizing the vast potential in the government marketplace and the unique position Colorado has in becoming a primary state to provide the government marketplace with the supplies and services needed to successfully accomplish its mission. 

Doing business in the Federal or State marketplace has changed over the years.   Past difficulties have been eliminated with the new focus on the commercial contractor and smaller businesses.  Please consider the following FAQs to better understand the current opportunities: 

Q: If a business entity was considering entering the government marketplace and you could give them just one piece of advice, what would it be?

A: Do it right! The concept is simple, but the execution can be more complex if a company attempts to perform in the government marketplace without the experience or advice necessary to succeed.  Unique skills are needed because the government marketplace is a different forum than the commercial market. A company must recognize, understand and prepare for the differences. In order to take advantage of the many opportunities when dealing with the government, the company must be prepared to understand there are differences, how those differences can be “handled”, and that the potential is worth the focus.  In that regard, it is crucial to have experienced, qualified professionals advising you about those unique requirements when dealing with the government—contract administrators, accountants, quality and marketing experts, and legal professionals. It may not always be necessary to hire people experienced in these areas, but a company should have such advisors available as needed.

 

Q: Once a company wins a government contract or is awarded an order, what focus should they have in completing their obligation?

A: It’s important to remember that a company’s “past performance” is not just a concept, but rather an important element of success. While there is no such thing as a perfect contract, careful administration, timely performance, quality work and accurate accounting are essential to securing an “outstanding” performance evaluation. The manner in which a company performs and how its contracts are administered is a primary factor the government considers when awarding new opportunities. Exercising sound business judgment, even on those occasions when the company must seek an equitable adjustment or relief from the contracting officer, is important in avoiding and/or resolving disputes over the performance of the contract. Remember, the government has responsibilities under the contract as well and must be held accountable.  If approached in a business-like manner and supported by the guiding principles in the regulations, executive orders and statutes, the Government generally appreciates an attempt to resolve issues at the lowest level and in the quickest amount of time.

 

Q: Is it important to understand the commercial-item procurement initiative when dealing with the government?

A: Federal Acquisition Regulation Part 12 provides guidelines for the purchase of “commercial” supplies and services. Briefly, the regulation states a preference for the acquisition of commercial items and that commercial items shall be acquired to meet the needs of the agency whenever they are available. In addition, the regulation requires prime contractors and subcontractors at all tiers to incorporate, to the maximum extent practicable, commercial items as components of items supplied to the government agency. This initiative is very important for any business participating in or considering entering the government marketplace. Having a product or service designated as “commercial” affects intellectual property rights, accounting audits, quality programs, socioeconomic requirements and the imposition of most of the normally required terms and conditions.  The Government favors “commercial” items because they know that pricing is driven to the most favorable level possible by market competition and as such they don’t need to spend extra effort justifying that they are receiving a fair and reasonable price. 

 

Q: Obviously contract terms and conditions are important, but how closely should contracts be reviewed?

A: As with all legal documents, it is important to understand the terms you are committing to and your responsibilities under the contract. In addition, over-incorporation of clauses only creates opportunity for increased spending and a forum for failure. In one situation our client, a small subcontractor on a major program, was given flow-down terms and conditions from the large prime contractor. We were requested to review these flow-down clauses and comment on the applicability of the requirements. Although the subcontractor was on the prime’s proposal team, the prime flowed down more than 115 contract provisions. Upon review, we found only a limited number of clauses that were mandatory due to the unique status of dealing with the Government and 14 clauses that would be acceptable if appropriately modified to support the prime contractor’s responsibilities to the government. The rest of the clauses did not apply or were just not appropriate. Always review the clauses and negotiate the final contract as much as possible. Balance your review by recognizing acceptable risks, managing those risks, and keeping in mind your goals in acquiring and performing the contract.

 

Q: What are some important considerations when establishing the Prime-Subcontractor relationships?

A: A company’s approach to entering the realm of government contracts should include various relationships with prime contractors. Those contractual relationships could include not only the traditional subcontract, but also teaming arrangements, joint ventures and mentor-protégé programs. Be thorough and proactive in the development of such relationships. Ensure that there is an understanding in terms of the focus and goals to be achieved and the responsibilities assigned to each party. Understand billing, risk allocation, intellectual property issues, marketing, and quality issues between the contract parties. Most important, clearly identify the roles and goals of the parties. Finally, understand and limit the terms and conditions necessary to successfully perform the contract.

 

Q: How should the contractor handle a dispute with the government or prime over contract award or performance?

A: There are different approaches to resolving disputes with the government or prime over a contract award or performance. In my opinion, it is most important not to be arbitrary and to understand that there is a certain cost to performing any business obligation. Management must balance the rights supplied under the contract with the importance of the company’s relationship with its customer. Generally, my experience has been that the government understands that parties to a contract may have a dispute—there is no perfect contract. While there are no guarantees, most government officials understand that it is “just business” as long as the issues are presented in a business-like approach. A professional approach goes a long way toward resolving issues and maintaining a high past performance rating.

Whatever the level of the dispute, the contractor must ensure that the claim is drafted well and fully supported. While there are times that demand a more formal resolution technique, I am a firm believer in trying to resolve issues through unassisted negotiation or formal mediation. There are a number of government directives that encourage alternative dispute resolutions between parties; take advantage of those directives as much as possible (it’s just good customer relations)

 

Coming up: in part III, “What Happened to my Profit?,” Rich discuss how factors like scope creep, the type of contract, and risk, can chip away at your bottom line. This piece is a must-read for small and large federal contractors alike.

Topics: Government Contractors, Commercial Pricing DoD, government contract reviews, Colorado Defense Contractors, doing business with the federal government, commercial item procurement

DoD SBIR/STTR 2018.1/A Topic Pre-Release

Posted by Tyler Link on Wed, Nov 29, 2017 @ 10:25 AM

DoD SBIR STTR Program 2018.1.png

ReliAscent would like to remind all Federal Government Contractors that the Defense Department just opened their 2018.1/A SBIR/STTR Topic Pre-Release, today!  To view the topics and ask technical questions through SITIS, visit the DoD SBIR/STTR Portal.

During the Pre-Release period, contractors are allowed to contact the topic authors directly,  and ask technical questions about specific topics (contact information is listed within each topic). We highly recommend you take advantage of this opportunity to connect with authors, and ensure you have a clear understanding of what they are looking for.

The DOD begins accepting proposals on January 8, 2018, and will close on February 7, 2018, at 8:00 p.m. EST. ReliAscent advises that all contractors plan ahead and submit your proposal early.  There is always heavy traffic on the site during the final week, which can slow things down considerably.

Important Dates

  1. SBIR 18.1 and STTR 18.A Pre-release: November 29, 2018
  2. SBIR 18.1 and STTR 18.A Open for Submissions: January 8, 2018
  3. SITIS Q&A Close: January 31, 2018
  4. SBIR 18.1 and STTR 18.A Close: February 7, 2018

As always; if you have any questions about SBIR accounting requirements, FAR & DCAA compliance, and/or protecting you intellectual property when submitting SBIR/STTR proposals, please do not hesitate to contact ReliAscent.

Good luck!

Topics: 2018 SBIR, DoD SBIR Pre-Release, DoD 2018.1/A SBIR/STTR

New White Paper: Government Contract Management Part I - The RFP Review

Posted by Tyler Link on Wed, Nov 15, 2017 @ 09:00 AM

ReliAscent is proud to announce the release of our latest white paper, written by ReliAscent Co-owner, and industry recognized government contract expert, Russ Farmer.  This white paper is the first in a 6-part series that focuses on Federal Government Contract Management, and how the important role of a Government Contract Manager (CM), helps a business to stay profitable, efficient, avoid risk, and even avoid legal trouble with the Federal Government.

In Part I, Russ discusses how a CM helps contractors and grantees to review an RFP; from ensuring the protection of contractor IP, to financial and performance risk review, avoidance and mitigation, and a complete review of terms and conditions and relevant FAR clauses and other compliance issues.  Each step is important when reviewing an RFP, and deciding how to best respond.

To get your copy of "Government Contract Management Part I - The RFP Review," click here now!

Government Contract Management - Part I White Paper

We hope you find this white paper helpful, and be on the lookout for the next installment coming in December: "Government Contract Management Part II - Proposal Participation."

If you would like to learn more about ReliAscent's Government Contract Management and Administration services--from contract reviews, to negotiations, subcontracts, closeouts and terminations--visit our website, or call us today!

Topics: government contract management, RFP Review, white papers, Contract Manager

“If You Are a Commercial Contractor, Please Consider This!” - ReliAscent Featured Partner Blog (Part I)

Posted by Rich Busch on Wed, Nov 08, 2017 @ 10:31 AM

The following blog is the first in a series of special guest and ReliAscent partner blogs, contributed by Richard Busch of the Busch Law Firm, and Mike Anderson, of ReliAscent.  This series will cover important topics ranging from an introduction to government contracting, to requests for equitable adjustments, risk management, contract change orders, and scope creep.  It will also cover government financial assistance efforts, and how defense contractors--both small and large business (along with subcontractors)--can increase profits, improve their ability to strategically plan for the future and remain profitable.

ReliAscent and the Busch Law Firm are proud to announce this synergistic relationship. We think this team will bring value to our clients and defense contractors across the country through the combination of our individual expertise and a blend of the administration and legal guidance to all phases of dealing in the government marketplace. By combining DCAA compliance and accounting expertise with defense contracting and FAR compliance legal representation and consultation, ReliAscent and Busch Law can help position contractors for financial success…

Government Contracting

 Part I - "If You Are a Commercial Contractor, Please Consider This!”

Why should an otherwise commercial company consider entering the Federal Government market place as a prime contractor, vendor, or subcontractor at any level?  

Over the last five years, the government has recognized a shift in the direction to advance business solutions.  Due to the growth in technology, the government has determined that the commercial business sector must be the primary force to develop and provide the products and services they need to achieve society’s goals.  Consequently, the Federal Acquisition Regulation (“FAR”) and the individual agency supplements have been revised to become much more “commercial” friendly in most situations.   If the potential contractor is a “commercial” business engaged in supplying commercial products or services, many of the complex requirements simply do not apply.  Except for a very limited number of government unique provisions, most clauses are negotiable. The following are some general points a commercial business should consider:

  • Just over $640B DoD 2018 proposed spending plan (total government budgets much bigger)
  • Limited government audit rights for commercial companies with commercial products
  • Terms and conditions more conducive to commercial application (subject to the unique mission of the government)
  • Over $41 Billion on the GSA Schedules for commercial products
  • Favorable research and development terms if negotiated correctly
  • Commercial pricing based on the market----- (Government does request the best commercial prices under like terms and conditions)
  • “Other Transaction” commercial type contracts may be available
  • Electronic Payment with automatic interest on due and payable amounts for late payments
  • Commercial markets highlight products purchased by the government due to quality verifications
  • Joint venture, teaming arrangements, and subcontract opportunities in addition to prime status purchases
  • Retention of license rights or patents if negotiated correctly on new products or modified products using government money

The government market sector has vast potential for a company that has the resources and products/services to benefit the goals of the government.  If a company is considering doing business with the government, the effort must be based on one simple principle---DO IT RIGHT!  

Bottom Line:  There is a great market potential for a “responsible” company that focuses on performing in the “right” way.

 

Coming Up: in part II, “Should We Do It?,” Rich introduces a series of important Q&A’s for government contractors to consider. From contract reviews, to establishing subcontracts, and how to handle disputes with the Federal Government, this piece is a must-read for small and large businesses alike.

Topics: Government Contractors, Commercial Pricing DoD, Colorado Defense Contractors, doing business with the federal government