Your Source for DCAA News and Government Contracting Information 


Government Contracting: 5 Strategies to Beat the Budget Crunch

Posted by Mike Anderson on Tue, Sep 06, 2011 @ 03:54 PM

The government plans to cut $2.4 Trillion from the budget over the next 10 years, beginning in the 2012 budget.  It is expected that up to $900 Billion in cuts could be included in the 2012 budget.  The Defense department could see over $28 Billion in cuts in 2012 with an expected $350 Billion over the next 10 years.  Federal agencies and departments are "running scared".  Contractors should be too as many current programs either will not exist or may exist in a reduced form in the next budget.  The Federal Budget is a large pendulum that swings from one extreme to the other.  We have enjoyed almost 10 years now of increased spending that can only be viewed as a boom.  Now there is a correction.  Sometime in the future the pendulum will swing back, we need to survive in the meantime.  Here are 5 strategies that small businesses can use to help mitigate their risk in this uncertain time;

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Topics: Government Contract, Defense Budget, 2012 Budget Cuts, Business Strategy

Government Contract Types & the Risk Continuum

Posted by Mike Anderson on Wed, Mar 30, 2011 @ 12:48 PM

You maybe surprised to learn that the government attempts to us many of the same practices commercial firms use to buy products and services. In fact, you could say the majority of what the government purchases falls into this category. For the most part, the government purchases what it needs on a competitive, best-value, fixed-price basis. That’s no different than most commercially businesses, and it’s even how consumers chose the majority of their purchases.

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Topics: Contract type, Risk Continuum, Government Contract, government contracting

Department of Defense - Continuing Resolution?

Posted by Mike Anderson on Mon, Feb 28, 2011 @ 09:51 AM

What is wrong with the way we are currently operating our government?  The government operates on a budget year from Oct. 1 to Sept. 30.  Theoretically the budget for the fiscal year should be established and approved prior to the start of the year.  Right now, the budget is not approved!  What?  That's right, the budget is operating on what is called a "continuing resolution" authorized by congress.  This means uncertainty, it means inefficiency and it means slow actions by the acquisition arm of the government (since they are not sure of funding, whether it will be approved, reduced, increased, eliminated, etc).  Undersecretary of Defense Aston Carter describes the problems well.  This short video allows some of his views of the problem. 

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Topics: SBIR Re-authorization, Ashton Carter, Government Contract, government contracting, DoD, Defense Budget

Greenhouse Gas a competitive advantage for Government Contracting

Posted by Mike Anderson on Thu, Jul 15, 2010 @ 09:18 AM

With all of the discussion in the news and all of the advertising we have seen over the last couple of years for "going green" it only makes sense that "going green" in federal contracting would follow.  The GSA formed a cross-agency group recently regarding Greenhouse Gas (GHG) emissions.  They concluded that not only was it possible to track this but it could be controlled somewhat by coordination with government suppliers.  For instance, it was estimated that IT systems alone were responsible for over 1 1/2% of global carbon dioxide emissions.  The reasoning was the energy required to run servers, computers and other computing equipment contributes to carbon dioxide generation.  OK you say, so how does that impact government contracting?  Well, the working group doing this study suggested that it would be acceptable to pay a higher price provided the higher priced supplier had a better GHG record than the competing bids.  Likewise, a procuring office could select against a supplier that did not have a particularly good GHG record.  Since this is relatively new, look for new ways to track and evaluate GHG in the near future.  I suggest that you stay in tune with this as you can use it to your advantage in bidding a contract if you can prove your firm has a good GHG record.  So now "going green" becomes more than a PR or goodwill gesture, it now can help you secure government contracts.  
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Topics: Government Contract, GHG, GSA

Changes in Defense Spending on the Horizon

Posted by Mike Anderson on Fri, Jul 02, 2010 @ 12:43 PM

On June 4, Defense Secretary Robert Gates set a deadline for Defense Department agencies to submit proposals by July 31st on how they would streamline operations to save over $100 Billion.  The focus is on becoming more streamlined, to eliminate unnecessary overhead and trim excessive programs.  The overall Defense Department budget is not going down but Secretary Gates wants to put more emphasis on the war efforts in Afghanistan & Iraq.  He also wants to see the federal spending done more efficiently and more productively.  There will be a scrutiny of programs that we have not seen over the last 10 to 15 years and without a doubt some programs will be canceled.  The types of contracts to be let will change as well.  Already we are seeing indications that the DoD is looking for more Firm Fixed Price (FFP) type contracts and less of the Cost Reimbursable type contracts.  The FFP contract vehicle will put more pressure on the subcontractor to make sure they are profitable.  In this type of a contract the government will only pay a specified amount and any over-runs will be the problem of the contractor.  Now, certainly, there are some types of activities where a FFP type contract just won't work but you can bet that every Contracting Officer in the DoD will be considering how they can spend their money more wisely.  The questions is, are you as a subcontractor, ready for this new challenge in the Department of Defense?
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Topics: Government Contract, government contracting

Improving Government Contracts by Presidential decree.

Posted by Mike Anderson on Thu, Jun 17, 2010 @ 07:00 AM

Well, as with anything from the government, there appears to be conflicting rules being issued.  At first glance when you look at 15 U.S.C. 644 (g) (1) it requires that a minimum of 23% of the value of all federal prime contracts issued are being issued to small businesses.  President Obama issued a memorandum (Memorandum for the Heads of Executive Departments and Agencies,Subject: Government Contracting, dated March 4, 2009) that called for 5 main objectives including to clarify the role of when functions should be performed by federal employees and when independent contractors may be used.  When you consider this memo and read between the lines of actions by this administration it is clear that the size of the government workforce will be growing.  If indeed that is the case, will it not take more of the federal contracting "pie" from small businesses?  Most of the small business content has consisted of services provided to the government so by pulling more work into the government itself, this would logically have to reduce some of the small business contracting, wouldn't it?  I know this is not the intent of the administration and if you ask, they will certainly say that is not the case.  I rather suspect that this requirement will put more pressure on existing federal employees that are involved with the procurement of goods and services for the government, the contracting officers.  As most small business people that do work with the federal government learn, the contracting officer (CO) is in control of your situation in a government contract.  If the workload of the CO becomes more difficult, they will try to maximize their effectiveness by taking the path of least resistance.  What this means to small business is that they must take extra care to make sure they meet the requirements of the RFQ and make the CO's job as easy as possible.  This includes making sure your accounting system meets all the FAR guidelines and your indirect billing rates are up to speed.  

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Topics: Government Contract, government consulting, government contract management

Navigating FAR and "late payments"

Posted by Mike Anderson on Mon, Jun 07, 2010 @ 07:00 AM

It always amazes me to hear about small business entrepreneurs who are successful in receiving SBIR grants or government contract(s)  but suddenly have difficulty in collecting money or continually have late payments from the government.

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Topics: FAR, Government Contract, SBIR, DCAA accounting