DCAA Compliance Blog

Your Source for DCAA News and Information for Contractors

ReliAscent® LLC is the only government contract accounting firm that specializes in all aspects of government contracting compliance.  From our DCAA compliant accounting services, to monthly government contract accounting for all government agency awards, contract management & administration, and financial services & planning, our goal is to ensure the success of our clients, and all small business government contractors and grantees.  

In our DCAA Blog, we discuss the latest government contracting news from the Federal Government, the DCAA, and DCMA, as well as promotions offered by ReliAscent, and helpful tools and resources for contractors.

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!  


 

Top 5 Reasons Small Government Contractors should outsorce their CFO

Posted by Mike Anderson on Fri, Oct 28, 2011 @ 08:21 AM

In small businesses executives must wear many hats.  There simply isn't enough revenue to fund specialists in various "non-direct" areas like accounting.  For this reason alone, the Chief Financial Officer (CFO) duties are often carried out either by a founder with limited financial experience or carried out by someone who does not have enough time to devote to the duties to do the job in a complete and efficient manner.  As a result, the business usually suffers.  To hire, as a consultant, an outsourced CFO for your business you can focus on the tasks that will bring the most benefit to your firm again and rest assured that the financial health and strategic growth of the company are being watched.  Here is a quick list of the top 5 reasons for hiring a consultant to serve as your CFO:
  1. Cash flow:  Cash flow is the lifeblood of a small government contractor or subcontractor.  Managing cash for a small government contractor requires knowledge of government contract types and specific clauses related to contract payment.  Negotiating the most favorable terms may mean the difference between long term success or failure of the contract and possibly even the firm. 
  2. Pricing:  Pricing in the proposal stage of a contract is crucial.  Knowing how to leverage government cost rules when budgeting and pricing new proposals will directly affect cash flow after the award of the contract.  With all the FAR regulations and other flow-downs on most government contracts it is critical that the small business has an expert CFO that can anticipate and construct pricing models that will be in the best interests of the firm going forward. 
  3. Compliance: Depending on your mix and dollar amounts of the contracts, your financial and business systems may be heavily scrutinized by the government.  Most small businesses simply don't have the expertise to survive the scrutiny if it focuses on your firm.  An experienced outsourced CFO can provide that expertise and stability.
  4. Profitability:  Success as a government contractor means monitoring profits and threats to performance on a job-by-job basis.  Understanding the special contractual obligations imposed by government work is key to assuring this success.  Understanding all of the government's complex matrix of requirements and applying them strategically can also lead to the maximization of a limited "fee" under government contracting guidelines. 
  5. Company Vision:  An outsourced CFO provides a "second set of independent eyes" on your business that assures the best possible long term strategy.  This helps control costs because you pay for only the CFO duties that you need and don't need to pay 6 figures to receive the benefit of this position.  A part-time CFO makes you look "bigger" and helps assure the government of your ability to survive and grow in the market.  Also, by hiring a consultant you may have the benefit of more than one CFO at the outsourced agency that can "poll" their ideas and strategies resulting in a better final strategy for the small business.  To top it all off, this is an allowable expense for government contractors.
Tech BizSolutions offers experienced CFO personnel on an outsourced basis.  All of our CFO's have over 20 years experience with government contracting and financial responsibilities.  Call me today if you want to discuss how this could positively impact your business.
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Topics: Outsourced CFO, Government Contractors


Budget Cuts, Fraud & Inefficiency Means Stricter Compliance

Posted by Mike Anderson on Wed, Oct 12, 2011 @ 08:30 AM

There may be a perfect storm brewing in the government contracting world that will make it harder to do business with the federal government.  It started in July of 2008 when the Government Accountability Office (GAO) issued a report that 3 of 3 DCAA audits showed inadequacies in the DCAA's performance of the audits.  This was followed up with another GAO investigation in September of 2009 that indicated a widespread problem within the DCAA organization.  As a result the DCAA went through 3 directors in a little over a year.  Major reform was announced and the DCAA is performing audits strictly to the book now, with only a "pass/fail" grade issued.  But even with this increasing dose of compliance issues for contractors, there continues to be problems.  Does it seem to you that we are hearing more about federal contractor fraud cases lately?  And then how about the case where government contractor executives are paid excessive salaries?  Many contracts suffer from cost overruns and late deliveries.  Combine all of this with the current economic crisis and the emphasis on cutting the federal budget and we have a perfect storm focused on government contractors.  What does this mean?  I think it will mean more scrutiny on government contractors, more emphasis for compliance and certainly more emphasis on performance.  There will be more difficulty for firms to survive in the government marketplace that do not meet all he compliance issues and/or that don't perform on-time and either on budget or under budget.  The contractors that can do this will be rewarded.  The contractors that cannot perform to this new standard will be rapidly pared from the market.  Companies that have an experienced staff to respond to all the government's compliance issues will prosper.  Companies that do not have significant experience in this area need to shore up that weakness.  Outsourcing this function can strengthen a company and assure survival.  Tech BizSolutions staff has the experience to offer to these companies in need of this service.  Call us today if you need to address a weakness or potential weakness.  We can help.
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Topics: FAR, DCAA compliance, Government Contractors, DCAA, DCAA audit


Secretary Gates DoD cuts and what they mean to Government Contractors

Posted by Mike Anderson on Mon, Nov 08, 2010 @ 02:02 PM

As most of us are aware of now, Defense Secretary Gates make sweeping proposals to cut overhead spending in the Defense Department over the next 5 years (reference our blog from Sept. 10, 2010).  The goal is to find $100 billion over the next 5 years by improving efficiencies and cutting unnecessary overhead.  So what does this mean to the average government contractor?   I listened to Rich Wilkinson, government contracts Vice President at Deltek, Inc, last week as he accessed this question.  Secretary Gates' proposal includes trimming 10% of the funding for service support contractors each year for the next three years.  Rich's point is that this could mean serious re-adjustment for small to medium sized businesses that are supplying what is known as Professional, Administrative & Management Support Services (or PAMS).   It could result in the elimination of close to $4.5 B in PAMS spending.  Obviously other areas will be cut such as the closing of the JFCOM in Virginia.  If you are a small business supporting this area of the Department of Defense you need evaluate your business model immediately in order to survive over the next 3 years.  Now, more than ever, is the time for strategic planning for the future.  Rich has some recommendations in his paper and we can help you here at Tech Biz evaluate your business model as well.  I think everybody that has enjoyed supplying the Department of Defense with products and/or services over the last 10 years needs to be proactive right now in order to survive in the future.

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Topics: Government Contractors, DoD, PAMS, Secretary Gates


DCAA Timekeeping Requirements - Part 3

Posted by Mike Anderson on Wed, Sep 29, 2010 @ 03:05 PM

In the previous two articles in this series we looked at what is required for a DCAA timekeeping system and what types of systems will meet these requirements.  Today I want to look at how the DCAA monitors these systems and what you, as a government contractor, might expect to be compliant. I think you can fairly assume that any time the government comes to your facility to do an audit (pre-award audit, system audit, or other) that they will be interested in looking at your timekeeping system.  But there are also other types of ways that they will check up on contractors timekeeping systems.  This is usually called a Labor Floor Check.  This is where a DCAA auditor shows up at your facility unannounced and randomly samples a few employees and checks for their understanding of the system and how they fill out their timesheets.  They have a detailed audit program that they follow from their Contract Audit Manual and it could be worth while to familiarize yourself with exactly what they might be looking for.  They will be looking for standard stuff like is the employee actually at work, do they know what to charge their labor to, are they recording their labor times daily, do they know the company procedure for timekeeping and are they following it.  There are also guidelines for the auditor to follow if you have remote employees or "work at home" employees.  These two areas are possible areas of misuse and of keen interest to the auditor.  You can be certain that if the auditor finds dicrepancies that your contracting officer will hear about it.  If you cannot resolve these findings with the auditor and/or contracting officer, there can be serious consequences.  All the more reason to make sure your timekeeping system is a good system and you have trained employees to use it properly.
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Topics: Government Contractors, DCAA, DCAA audit, timekeeping


Changing Winds for DoD Federal Government Contractors

Posted by Mike Anderson on Fri, Sep 10, 2010 @ 09:04 AM

One of the most important skills for a small business owner is to be able to anticipate future changes in the market that will affect their business.  I think we face such a critical time right now in the world of government contracting.  Those businesses that support the Department of Defense in one way or the other have seen an increasing budget over the last 10 years or so.  We are starting to see signs that that may be coming to an end.  Oh the spending won't stop, please don't misunderstand.  What I think will stop is the ravanous increases and, to some degree, the "I have to have that for our military at any cost" mentality.  There was obviously some excess and some "fat" buildup in the budget over this time period.  Examples that this is changing are all around us.  The F-22 program was stopped.  Secretary Gates has announced recently that he will "save" $100 Billion over the next 5 years from the defense budget.  There is allegedly a "blacklist" being created as a result of the 2012 National Defense Authorization Act that could further cause difficulties for contractors.  President Obama is more than hinting that "outsourcing" of government functions should be brought back in-house.  Lockheed Martin announced a reduction of about 600 executives from their upper management ranks last week.  I think the Lockheed action is significant.  Lockheed is the nation's largest contractor (especially in the Defense market) and they are obviously taking steps to trim their overhead, batton down the hatches so to speak.  Everyone serving the defense market should take note and make preparations for the coming storm.  If you prepare properly now, the storm may not affect you as much.  If you are confused about what this means, give me a call and I'll be happy to discuss it with you.
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Topics: government contracting, Government Contractors, DoD


Tech BizSolutions Job Opening

Posted by Mike Anderson on Wed, Aug 18, 2010 @ 05:05 PM

Tech BizSolutions, Inc. is looking to expand our nationally recognized staff.  We are looking for special individuals.  The right person is someone that has accounting experience/knowledge and also knowledge of government accounting requirements.  So the right individual will know about all the Federal Acquisition Regulations, know about Generally Accepted Accounting Principles (GAAP) and have experience in servicing contracts with the Federal Government.  Familiarity with small business accounting programs such as QuickBooks, PeachTree, Deltek GCS and others is definately a plus.

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Topics: Government contract consultants, Government Contractors, Tech BizSolutions