Tag Archives: Government Contractors

5 Steps to Stand Out From The Government Contracting Crowd In 2018

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Small Business Standing Out in a Crowd

“WASHINGTON TECHNOLOGY” By Mark Amtower

“How can they stand out from the crowd to get some of those precious government contract dollars?

Several things come to mind but these five are usually at the top of my list. I have included a reference for each to a previous WT article.”


“Networking

We all understand that this market is driven by relationships: who you know, who knows you, what they think of you and you of them, and what you might be able to do together or for one another.

In the summer of 2012 I wrote an article on networking, which is a big part of the relationship puzzle. Where you choose to spend your time is critical. You have limited time and there are always many venues where you can network. Picking the venues which yield the best return on investment, where you can meet prospects, customers, partners, media and others, is a key component to help you stand out where it matters. You must be seen. Here is my column.

Strategy

I have been in numerous meetings where an executive will have goals, sometimes nebulous, sometimes well-defined, but they lack a strategy for reaching the goals. Knowing your goals is important, but without a game plan you will likely go nowhere and you will certainly not stand out. Read more here.

Differentiate

Clearly enunciate what you bring to the table. This can be a combination of things that make you and your company unique, or it can one really strong area of competence.

Combinations can include technical expertise, deep relationships with an agency, SMEs, owning a spot on preferred contracts, set-aside status and more.

The more you can differentiate in terms that appeal to government buyers the more you stand out. Read more.

Agency (account) based marketing (ABM)

I wrote about this back in November, but it is worth repeating.

Since the mid-1990s I have been advising companies to maximize their presence in agencies where they are known before they try to migrate to “greener pastures,” which are often pastures where they are not know. If you are selling in a cabinet level department to one or two divisions, why not expand to other divisions within that department? This is often a saner approach than migrating to another cabinet department or independent agency.

It is much easier to stand out when you are doing more business with your best customer(s).

Social selling

This is another recent column topic. Social selling is an adjunct to traditional selling, leveraging social networking platforms to start and manage relationships with customers, prospects, partners and others.

Social selling is the process of finding buyers and influencers on a social networking platform (I prefer LinkedIn), getting on their radar and sharing information that will make you and your company stand out from the competition. There are many social selling tactics that you can use, depending on who you are trying to influence.

LinkedIn is pervasive in the government contracting community and by adding valuable insights on social media you will most definitely stand out.

You can’t stand out by being part of the herd.”

About the Author

Mark Amtower advises government contractors on all facets of business-to-government (B2G) marketing and leveraging LinkedIn. Find Mark on LinkedIn at http://www.linkedin.com/in/markamtower. 

https://washingtontechnology.com/articles/2018/01/17/insights-amtower-2018-strategy.aspx

 

 

 

 

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Key Processes for Winning Proposals

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Writing Winning Proposals

“WASHINGTON TECHNOLOGY” By Matthew McKelvey

“Don’t be fooled, winning proposals are created, and do not simply materialize from some magical force. It’s not magic, but a disciplined process.

By adhering to key principles and steps, such as: careful planning, time management, attention to detail, and assembling a team of experts, your organization can create your own recipe for success.”


“The often lengthy and detailed process involved with developing winning proposals for new government opportunities can sometimes seem almost mythical.

You decode a requirements document that is hundreds of pages long and identify a combination of recommendations from limited or conflicting information, past performance experience which doesn’t necessarily match the current opportunity exactly, and somehow propose a price you will have to live with for five years or more.

The bottom-line is that, while writing cost proposals requires following a basic formula, it is critical to develop a multi-level, detailed plan to include all data points and requests to ensure a timely turnaround and delivery. Following a process ensures your proposal is compliant (meets all of the government requirements) and accurate (no mathematical, grammatical, or presentation errors). Failure to be either compliant or accurate is a sure way to lose — regardless of how great your solution is.

Here are some ‘pro tips’ from our experts to take the guesswork out of your cost proposal development process:

Arm Yourself with Tools for Success- Key Processes for a Winning Approach

From the get-go, it is essential to begin a proposal response approach that will result in a consistent, repeatable new business approach that wins time and again.

In a RFP review, for example:

  • Always be sure you read the full document up-front and ensure you have all of the relevant information required to respond accurately and comprehensively.
  • Document key questions right away, as well as identify areas where you’ll need more detail. Also, remember that the best time to meet the client, gather information, develop your team, and plan the proposal response is before the RFP is ever released.
  • Assemble your team and develop your production schedule that highlights key milestones and backs into known due dates. At this stage of the game, it is critical to involve your pricing team right out of the gate and before the RFP drops (at the capture process). This is a critical step because of the potential impacts your teammates and sub-contractors can exert on your cost decisions.
  • Always create a Compliance Matrix. The best proposal is often eliminated from consideration all because of a minor compliance error. To avoid this happening to you, put together a matrix to organize all steps, responsibilities, activities, deliverables, and team members so you can keep your eyes on the prize (that finished response!) and track progress at-a-glance while keeping communication lines open. The matrix should list everything the RFP requires so nothing is missed, and it also makes it easy for reviewers to check off the boxes to ensure you hit all necessary points.
  • Determine the Cost Schedule right away. This includes an assessment of indirect rates, using a model to calculate inputs and additional costs beyond RFP requirements, calculate your wrap rate, and analyze basis and pools, as well as ceiling impacts.

Tricks of the Trade – The Secret Sauce

  • Get Started Early. Particularly with cost decisions, time is a critical factor to be sure your data is accurate. Building in the over-communication and transparency among your team members is important to finishing the response in a timely manner, but also to allow for early intervention and mitigation of any roadblocks that may arise.
  • Develop a production framework and strategy early, and use it often. Implement a phased, targeted structure to your cost meetings during a response development process. Doing so early on makes it much easier to adjust for changes in requirements or information as they come up as you already have your framework established.
  • Master Excel. Consolidate data entry onto single tabs for easy management and recall, use color coded values as opposed to formulas where possible, check formatting, data validation, and perform independent quality checks on your model as you go to ensure everything is on track.
  • Manage your Sub-Contractors Effectively. Create templates for key deliverables and document responses to distribute to subcontractors, helping to ensure a consistent work product – and less editing, formatting, and merging later on – while establishing a structure of regular communication and status updates throughout each project stage.
  • Own the Narrative. Refer back to your compliance matrix regularly, create an outline based on the RFP, and create your narrative early in the process so it can grow and evolve as the process unfolds. The narrative is where you sell your price and clarify all bases of estimates.
  • Determine Labor Rates and Support Your Proposed Cost Elements. Typically, the distributor of the RFP will tell you what they are looking for. You’ll need to know early on what exactly you’ll be proposing to address this need. To do this, you’ll need to gather as much data as you can up-front and map requirements from the RFP against company, prime, and labor categories.

Remember- especially in the government sector, you are not just making a case about what is needed to address an identified objective, you are also selling what the associated costs will be.

Having a strong and competitive cost strategy for each of your cost estimates (staffing, direct labor, subcontractors, other direct costs, indirect rates, and fee/profit) is key to increasing win likelihood.

Doing this right, with compelling support, will ensure you are able to successfully defend your case in your response and demonstrate that your proposed solution – and the associated costs – are realistic and reasonable.

How To Develop a Tight Production Machine

At the top of the list is to always plan ahead! The enemy of timely production and accurate completion of tasks is rushing to the finish. It’s a good idea to dedicate at least three days for review – whether in soft copy or printed.

It is also a good idea to conduct your pricing reviews ahead of the last minute to allow for time to correct quality control issues, formatting (which is a compliance issue), and others. Allow five days here in your production schedule, ideally.

Other tips? Color code everything on your spreadsheet documents- this allows you to keep things organized, but also to know on the cost side which sheets are to be printed and submitted, and which stay with you.

Leverage all of the power of your team here as well; they are often your best proofers!

The Bottom-Line

Overall, the secret to a winning proposal process and cost structure is not a mystery. Proposals take time and effort – maximize both by ensuring you plan early, assemble a strong team, develop a compliance matrix, create a tight production schedule, use your narrative to sell your approach, and make sure you provide a compelling cost story. Remember – compliance and accuracy are key.

Adhering to these principles will ensure your cost proposal isn’t just a mix of ingredients. Instead, it is a well-formed recipe which produces a very tempting choice for the government.”

About the Author

Matthew McKelvey is the president of the McKelvey Group, a financial consulting firm in Gaithersburg, Md.

https://washingtontechnology.com/articles/2017/12/21/insights-mckelvey-no-magic-proposals.aspx

 

 

 

 

How Ellen Lord Plans to Reduce Pentagon Acquisition Time By 50 Percent

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Cut Pentagon Aquisition time 50%

“DEFENSE NEWS”

“The Pentagon’s top acquisition official plans to cut the time for early lead procurement by 50 percent.

A future goal of compressing the timeline of request for proposals to contract on major defense acquisition programs from two and a half years down to about 12 months.”

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“Much of the strategy revolves around things the department can do, right now, to try and speed up the front-end of the acquisition timeline, Ellen Lord told a Thursday hearing of the Senate Armed Services Committee.

For instance, Lord’s plan starts with two moves that she believes the department can do with existing authorities: “Incentivizing contractors to submit responsive proposals in 60 days or less,” and “implementing an electronic departmentwide acquisition streamlining tool.”

https://www.defensenews.com/7be21fac-5643-4cfc-912e-130e9dacec1f

Similarly, she pointed to two examples of pilot programs where she believes AT&L has the authority to draw down the lead time for programs. Those examples – the C-130J retrofit kits, and the Japanese Global Hawk foreign military sale requirement – could prove a way forward for the department as a whole.

The goal of those two programs is to prove the Pentagon can get those on contract in 280 days or less of the request for proposals, with the eventual goal of getting it down to 180 days from RFP to contract award.

“If we were granted the statutory authority, on sole source procurements, it would allow us to use our judgment to reduce the amount of cost and pricing data we would require when we have cost transparency with the companies with which we do business,” Lord told the SASC.

Lord is also looking at ways to specifically speed up the FMS process, which she raised as an issue during her time in industry. As a result, she said DoD is looking at “prepositioning production contracts” for yet-to-be-determined FMS requirements.

Those would essentially be prepared contracts with language where the department can almost “fill in the blanks” with the details, Lord said, which would reduce the timeline – yet another step to speed up the start of the acquisition process.

Committee Chairman Sen. John McCain, R-Ariz., appeared pleased to hear Lord’s ideas, interjecting several times during Lord’s opening statement to ask for clarification on specific points and offering broad support to the idea that DoD needs to take chances to speed up the process.

“You need to take more risk [and] we recognize Congress can make that more difficult,” McCain said, before emphasizing that Lord and the rest of the Pentagon acquisition network needs to keep in touch with Congress to explain the work they are doing.

“We would rather have a small failure that teaches us something [in the] acquisition process than deal with a multibillion dollar program that becomes ‘too big to fail,’” the chairman said, to which Lord responded: “We’re going to work with you and your teams to demonstrate how we do it and we’re going to come back to you [if we need] new authorities.”

https://www.defensenews.com/pentagon/2017/12/08/heres-how-ellen-lord-will-reduce-acquisition-time-by-50-percent/

 

 

 

 

 

5 Marketing Best Practices to Drive Your Brand to the Future

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Marketing Best Practices.jpg

“WASHINGTON TECHNOLOGY” By Elizabeth Harr

“The world of government marketing has been slow to change, but that’s no longer the case, and increasingly, contractors are adopting best practices from the private sector.

These five strategies, when executed well, can offer enormous benefits.”


“No single strategy can guarantee success in government marketing. But my firm’s recent research reveals five marketing strategies that can significantly benefit government contractors.

1. Gain Market Insights through Research

The biggest challenge in improving your firm’s government marketing impact is increasing your understanding of your audience’s changing business needs. Research can reveal insights into the challenges facing current and prospective clients, strengths and weaknesses of both yourself and competitors, and most critically, how you’re different.

What’s more, firms that conduct formal research on their target markets grow faster and are more profitable. In a recent study, we found that 34 percent of high growth firms do systematic market research at least quarterly, unlike their slow-growth peers.

2. Follow a Focused Strategy

Our research also found that firms benefit from narrowly focused strategies.

The reason is that the broader a firm’s appeal, the more numerous are its competitors — and the more difficult it is for the firm to stand out. That being said, there are a few differentiators that consistently outperform others. For example, firms that offer a niche service are 25 percent more likely to be high growth firms, while firms that specialize in a particular industry are an impressive 89 percent more likely to become high growth firms.

We’ve identified three reasons that such niche approaches are effective:

  1. They allow a firm to be more visible to a smaller audience, making it easier and less expensive to reach them.
  2. The firms are more likely to be seen as top experts in their field, allowing them to close business more quickly — and charge premium fees.
  3. Smaller, well-defined markets are easier to understand and monitor, positioning these firms to introduce innovative solutions as their clients’ needs evolve.

3. Build Your Brand around Expertise

Our research reveals that expertise is the number one selection criteria decision makers use when building the list of firms to consider. More to the point, in 72 percent of cases, expertise was the single factor that tipped the scale in favor of the selected firm. Even in a contract-driven environment, expertise — and the extent to which your brand is built around it — helps build the visibility firms needs to stay in front of, and on top of, the right opportunities.

Fortunately, there are ways a firm can make its expertise more visible to target prospects. The most effective is to bring the expertise directly to the audience, even before they are ready to buy. Some of the best ways to do so are by speaking at events, publishing articles and blog posts, and conducting free webinars.

4. A Balanced Approach to Business Development

Our findings also show that contractors get the most traction when their business development efforts balance networking with speaking and publishing activities. Networking by itself can produce useful leads — but when a contractor is also engaging with potential buyers through compelling content delivered at speaking events or through published articles, their audiences are that much further into the sales funnel. Contractors that communicate with prospective buyers through both online and traditional platforms are also better positioned for success as marketing becomes increasingly digital.

5. The Impact — and Implications of — Attracting Top Talent

Professional services firms are only as good as their talent. After all, it is their professionals’ expertise that firms are selling. But many firms struggle to attract and retain top talent. A lack of qualified job candidates can severely limit a firm’s future prospects and put a ceiling on growth.

The good news is that the most important criteria that top talent looks for when selecting their next professional home aligns nicely with the top criteria organizations use when vetting firms with which to do business. We learned from our research on employer branding that being aligned with a growing firm was most important to job candidates in their search. And we know from our other bodies of research, cited above, that expertise is what decision makers are looking for when selecting a firm. Building both your external and your employer brand around specialized expertise signals to decision makers you have what it takes to get the job done, and it signals to future recruits that you really are the firm best able to help them achieve their career goals.

In short, when you’re the firm known for its deep expertise, everyone wins.

About the Author

Elizabeth Harr is a partner with Hinge Marketing and leads the firm’s technology and consulting practice. She is the co-author of two books, the Visible Expert and the Buyer’s Brain.”

https://washingtontechnology.com/articles/2017/11/28/insights-harr-marketing-strategies.aspx

 

DCAA Audits And Small Business Job Cost Accounting Systems

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DCAA Audits

‘Small Business Federal Government Contracting (Smalltofeds)” By Ken Larson

 

“Introduction

Small Businesses typically have a learning experience growing into government contracting. Part of that process is undergoing reviews by the Defense Contract Audit Agency (DCAA). It takes knowledge of the requirements and strategic focus to set up the type of business processes required for accommodating government contract job cost accounting and fit those processes into the way your company does business.

DCAA or other agency representatives do not approve job cost accounting software packages. They approve contractor job cost accounting practices in compliance with Federal Cost Accounting Standards (CAS). If you are a small business, you are probably going to come under modified CAS Coverage that you can read about at the following link:

Cost Accounting Standards Compliance

Perhaps you have already examined the above background, but I would encourage you to review it again in connection with planning for your business system. Perhaps you have discovered that CAS compliant job cost accounting effects your estimating structure, your long range planning for indirect rates, as well as your general ledger, overhead and G&A structure. You may have discovered as well that DCAA wants to see your government contracts accounted for in a separate cost center from your commercial work and that there are certain unallowable costs that cannot be charged directly or indirectly to government contracts.

Proposal AuditsProposal audits are performed by DCAA on your cost proposal at the request of the Procurement Contracting Officer (PCO) and verify your direct and indirect rates against your long range plan, your labor category pricing, contingent hire agreements, vendor quotes, subcontractor proposals and all other data related to the cost volume of the proposal. Results go to the PCO. Arithmetic checks are made. No opinion is offered on the merit of the pricing, only that it has been documented in a long-range plan or a vendor or subcontractor quote and it is accurate.

Progress Billing Audits under Firm Fixed Price ContractsThis type of audit is on live data from your billing system. It is triggered by your submitting a progress payment under a firm, fixed price contract. Progress payments can be allowed in long-running firm, fixed price contracts that are front-end loaded with material and labor investment and have lengthy schedules for delivering the end product.

The DCAA Auditor will get the audit request from the contracting activity and will ask to examine the complete set of job cost records in your accounting system for incurred cost on the fixed price contract and tie those records out to the progress payment requested amount (usually 85-90% of the incurred cost to date – they hold some billed amount in retention). Records audited are at the time card and expense report level, as well as purchase orders, travel vouchers and any other transactions that are booked and billed in your accounting system to the fixed price contract. They will want to see the time cards and other documents and will trace them back through the system.

If you do not have a progress billing clause in your firm, fixed price contract, it is unlikely you will be audited. The contracting activity or the Defense Finance Accounting System (DFAS) will simply compare the final amount you bill to the firm, fixed price amount in your contract and pay if the item or service has been accepted and delivered. (Usually a sign-off by the PCO, Contracting Officer’s Technical Representative (COTR) or a DD Form 250 signed by a government inspector on product deliveries)

Cost Plus and T&M Contract Billing AuditsBilling audits are performed by DCAA, again at the request of the contracting activity. The auditor will go into all actual cost records submitted with your billing. Cost plus and T&M billings must have all the billing detail behind them or they will not be paid. The detail must be at the transaction level and the audit is identical to the one discussed above for progress payments.

Incurred Cost Audits (Often referred to as “Rate” audits)These audits are conducted when you are closing out contracts with the government and they have been billed at provisional rates, or the government needs to establish that you are billing accurately from a rate standpoint. If the contract is fixed price with progress payments, cost plus or T&M in nature and has been billed over a long period, particularly if it has crossed more than one government fiscal year, then a system-wide incurred cost audit will be necessary to verify the rates that were charged to the government and determine the difference between the provisional rate billed and the actual rate incurred (where applicable).

In addition it is periodically necessary for the government to establish that no unallowable costs have found their way into government contract billings.

The government allows provisional billing rates for the convenience of the contractor based on his long-range plan and mix of business. The government holds a retention amount on each billing and then at closeout determines with the contractor through an incurred cost audit the final amount due on the contract, releases the retention accordingly, and the contract can then be closed if all other obligations have been completed. At closeout the government pays the final bill.
A rate audit determines the compliance of the job cost system if it occurs while the contract is in process. If an incurred cost audit occurs on contract closeout actions, results will directly impact final contract billing approval and amounts.

Job Cost Accounting Software
My experience with job cost accounting software tools is that complete packages are pretty expensive. COTS accounting packages such as Quick Books do not provide job cost accounting. I have installed JAMIS, which is the ‘Cadillac’, DELTEK, which is the ‘Fairlane 500’, and SYMPAQ, which is the ‘Volkswagen’. They are all expensive, even for single user licenses. You can go to these and other product sites on the web and examine their capabilities:

Deltek

Sympaq

JAMIS

Here are some products especially designed for small business:

ERP-GOV is a new product that appears to be economical and fairly high quality:

ERP.GOV

ICAT is an add-on tool for Quick Books that some small companies are using:

ICAT

PROCAS is an offline and online, on-demand approach that is relatively new and shows promise:

PROCAS

All of the above suppliers are used to long sales cycles and competing against each other. They will do remote demos for you and bend over backwards to show you their products. You can learn much about government contract job cost accounting just by taking the time to go through a demo. For companies whose direct job cost records are growing fast, these tools offer the utility to manage data volume and efficiently handle requirements such as changes to existing records driven by rate changes, fiscal period closing or contract closeout.

Growing Your Job Cost System
Many small companies doing government work start out with a rudimentary direct job cost accounting software package such as Peach Tree or the add-on tool for Quick Books mentioned above and crutch it with manually maintained records on spreadsheets for indirect cost allocation, time keeping, expense reporting, purchasing and supplier commitments. There is nothing wrong with such an approach as long as you can supply job cost (individual contract) records complying with modified CAS Coverage and demonstrate such things as:

Time Cards and time keeping process by worker and labor category by contract or indirect cost pool

Expense Reports and expense report process by worker by contract or indirect cost pool

Purchase Orders with job cost accounting data traceable thru invoices to contacts or indirect cost pools after payment

Overhead Allocations in a Government-unique cost center to individual contracts at month end based on individual contract direct labor cost

G&A Allocations in a Government-unique cost center to individual contracts at month end based on individual contract total cost

A semi-manual approach gets burdensome as the company grows and the number of accounting transactions at the direct and indirect cost level increase in volume.

If you do not have a good job cost software, I recommend you begin looking for one and plan strategically to implement it if progress billings and service contracting to include time and material and cost plus contracts are in your future. Implementing a government compliant job cost system is a sensitive matter and must be planned. I was never able to pull it off in a small company in any less than a year with some delicate timing, particularly during cut-over from the old system to the new.

As companies grow and get involved in larger programs they come under full CAS Coverage that requires a disclosure statement and considerably more controls on the structure of the business system. You can read about full CAS coverage at the link contained in the introduction to this article.

Summary

If you have the investment budget available, you may wish to consider the job cost accounting system software suppliers I mentioned above and compete them against each other for a price. Installing one of these packages is critical from an accounting period standpoint. I recommend a new year starting point and running in parallel on your old system for at least a quarter.Keep in mind that DCAA does not approve COTS job cost accounting system software. Buying the software will not make you “DCAA Compliant” or “CAS Compliant” That objective is achieved through careful process development, specific to your company, utilizing software as a tool to operate your own unique business processes. Your processes will include long range planning, pricing, job cost accounting, indirect cost allocation, time-keeping, expense reporting, purchasing and commitments and billing – all geared to accurate job cost records at the individual contract level.

To the extent that you cannot demonstrate the above features to DCAA when they audit your business you CAN demonstrate that you are aware of the necessity to set these things up, lay out your plan to do so, and specify a time frame within which DCAA can expect to see you complete your compliant government contract pricing and accounting structure.

I have found that DCAA auditors are reasonable people who understand small companies must grow into government business systems. Showing them your accounting structure and your business system plans will display knowledge they will appreciate and assure them you understand the requirements, even if you cannot demonstrate all the processes at the point in time that the government initially audits your company.

Chapters 45 and 51 through 53 of my Book, “Small Business Federal Government Contracting” provides further detail and examples on establishing CAS-Compliant small business planning, pricing and job cost accounting. The book is free as a download in the right margin of this site in the “Box Net” cube.

http://www.smalltofeds.com/2008/02/dcaa-audits-and-small-business-job-cost.html

ABOUT THE AUTHOR:

Ken Fluther - Copy - Copy

Micro Mentor Volunteer Counselor Ken Larson assists many small businesses with their planning and operations processes. Small business owners or prospective owners locate through a background search capability at Micro Mentor.   Ken is a Veteran of 2 tours in the US Army Vietnam and has over 40 years in the Defense Industrial Complex. He spent over 30 years in federal government program and contract management and 10 years in small business consulting. Ken receives many inquiries from small companies wishing to enter or enhance their position in federal government contracting. Volunteer time, books, articles, and resources are 100% free. 

Top Federal Contractors Spend Millions on Influence, Get Billions in Contracts

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Lobbying

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

“POGO found that the median return on investment was $1,323 in contracts for every dollar spent on federal lobbying and election activities.

The federal government’s 100 largest contractors received an incredible return on their investment in lobbying and election contributions in FY 2016, spending just $289 million on political influence but receiving more than $262 billion in federal business.”


“This data comes in part from POGO’s Federal Contractor Misconduct Database (FCMD), recently updated with the government’s Federal Procurement Data System fiscal year 2016 ranking of the top 100 contractors. POGO’s database currently tracks 220 of the federal government’s largest providers of goods and services and contains more than 2,700 resolved and pending misconduct instances dating back to 1995. Over that time, these entities have paid nearly $99 billion in fines, settlements, and court judgments.

The top 100 companies were collectively awarded more than $262 billion in contracts in FY 2016, accounting for 55 percent of all contracts awarded that year. According to data compiled by the Center for Responsive Politics, the top 100 collectively spent more than $218 million on federal lobbying in 2016 and nearly $71 million in federal campaign donations during the 2016 election cycle, resulting in a median return on investment (dollar amount in contracts received for each dollar spent on lobbying and campaign contributions) of $1,323.

POGO also found a strong positive correlation between contract awards and lobbying/election expenditures for aerospace/defense contractors. By comparing the two data sets and analyzing it by industry sector, we found the median return on investment for aerospace/defense companies was $1,120 for every dollar spent lobbying, while for IT services firms it was an astonishing $5,296. Four IT giants have joined our database this year, including Carahsoft, Engility, Hewlett Packard Enterprise Company, and prestigious IT institution Stanford University.

Eight of the ten largest federal contractors in FY 2016 were military hardware suppliers. Of these eight, five were also among the ten biggest spenders on political influence. Lockheed Martin and Boeing topped both lists and earned relatively high returns on investment: $2,382 and $1,225, respectively.

Some contractors had deceptively low returns on investment. General Atomics received $377 in contracts for every dollar spent on influence, while General Electric received just $183. However, these companies get other returns from Uncle Sam, such as subsidies (grants, loans, and tax credits) and favorable tax, trade, and regulatory policies. According to Good Jobs First’s Subsidy Tracker database, in FY 2016 General Atomics received nearly $68 million in research grants from the Department of Energy, while General Electric received more than $42 million in federal grants, loans, and loan guarantees from various agencies.

In the past, POGO has recommended common-sense reforms to bring greater transparency and accountability to the contracting system:

http://www.pogo.org/about/press-room/releases/2017/top-federal-contractors-spend-millions-on-influence.html

 

Small Business Government Contractors: ‘ACT’ Right

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Message to Small Business

“WASHINGTON TECHNOLOGY”

“A simple and straightforward message for contractors : “ACT” differently in today’s market.

For a Health and Human Services Department small business specialist,  Dwight Deneal, ACT is an acronym — Accessibility, Capability and Transferability.”


“Accessibility

“You have to understand what the procurement landscape looks like at HHS,” he said. “From the 11 operating divisions to the seven staff divisions, know what they buy, how they buy and where they buy IT.”

For example, the vehicle of choice for the Centers for Disease Control and Prevention is SPARC. At the National Institutes of Health however, it is the NITAAC vehicles such as CIO-SP and CIO-CS.

“You have to make yourself available and accessible through those vehicles,” Deneal said.

Capability

“A lot of companies come to us saying they are a jack of all trades. ‘We do IV&V, we do enterprise architecture, we do everything,’” Deneal said.

But that is a mistake in today’s market, according to Deneal.

“What are the real core capabilities of your company,” he said. “What is your sweet spot? Your bread and butter? You need to hone in on your capabilities.”

Transferability

“You have a variety of past performance around HHS,” Deneal said. “So how does that transfer to other program offices?”

Contractors in today’s market need to know how to take success with one customer and demonstrate how it applies to another customer, he said. That is even within the same agency, according to Deneal.

“If you ACT right and do these things, you’ll find success and HHS and across other government agencies,” Deneal said.”

https://washingtontechnology.com/blogs/editors-notebook/2017/11/hhs-contractor-act-advice.aspx

 

Army Prepares To Compete Next Worldwide War Fighter Support Contract (LOGCAP V)

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LOGCAP Contract

Image:  U.S. Army Contracting Command

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

“Some industry heavyweights have been making moves to improve their shot at winning a piece of the LOGCAP V.

The ten-year, $82 billion LOGCAP V will provide U.S. and allied forces around the world with a multitude of logistical and life support services.”


“The Army will start to solicit bids for LOGCAP V sometime next month, and plans to split the contract between four to six prime contractors. Those contractors will then compete for all future task orders. A final award decision is expected by August 2018.

Top-100 federal contractor PAE (Pacific Architects and Engineers) is teaming up with other large defense suppliers to form two joint ventures, one with Parsons Corporation and the other with Vectrus Systems. Both joint ventures are headed by Scott Welker, who was recently a senior official at the Army’s Rock Island Arsenal, the administrative headquarters for LOGCAP. (Welker was tapped to lead the PAE-Vectrus joint venture less than three months after he retired from the government.)

However, the competitive advantage of having a LOGCAP insider as their leader could be undercut by the questionable track records of both PAE and Parsons. Last month, PAE paid $5 million to settle a False Claims Act lawsuit alleging the company failed to conduct the required screening of employees on a contract to train police in Afghanistan. Two years ago, the company paid $1.15 million to settle a case involving a former PAE program manager who was convicted of orchestrating a bid-rigging scheme on another Afghanistan services contract. As for Parsons, its performance on Iraq reconstruction contracts was repeatedly criticized by government auditors, and in 2015 the company paid $3.8 million to settle allegations of mischarging the Department of Energy on a construction project.

LOGCAP first attracted controversy in 2001 when the Army awarded the multi-billion dollar LOGCAP III to KBR, whose former CEO was then-Vice President Dick Cheney. In the years that followed, KBR’s performance on the contract garnered unfavorable audit findings and numerous accusations of fraud. The Army’s decision in 2007 to divide the work under LOGCAP IV between three companies—a decision the Project On Government Oversight strongly supported—has helped reduce, but not totally eliminate, instances of corruption, waste, and mismanagement.

The Army seems to have learned its lesson by making LOGCAP V competitive. Here’s hoping our warfighters get the supplies and services they need, the taxpayers get good deals, and the bad old days of LOGCAP contractor abuses are behind us.”

http://www.pogo.org/blog/2017/10/army-prepares-to-deploy-next-worldwide-warfighter-support-contract.html

 

Know Your Options for Government Contract Disputes and Appeals

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REQUESTS FOR EQUITABLE ADJUSTMENT (REA)

ALTERNATIVE DISPUTE RESOLUTION (ADR)

CLAIMS

“SMALLTOFEDS”  By Ken Larson

“INTRODUCTION

The Federal Acquisition Regulation (FAR) contains provisions for contractors and the government to resolve contract disputes.  The disputes often arise due to events during performance, many times surfacing weaknesses in the original contract work definition, technical parameters, schedule factors or related terms and conditions that can lead to change implications effecting cost, schedule and delivery.

In short, when the understanding the parties thought they had at negotiation and execution of the contract is in dispute, there must be a resolution.
These conditions open the baseline of the contract to further clarification and negotiation. The FAR recognizes that a fair and equitable process is necessary to settle disputes and re-establish a mutually agreeable contract baseline.

GENERAL CONSIDERATIONS

Contract baseline management has been discussed previously in the following article:

Contract Baseline Management

The above article offers six (6) rules of thumb:

  1. KNOW – The contract value and its ceiling amount
  2. KNOW – The incurred cost to date and commitments
  3. KNOW – The scope of work and whether or not your current efforts are supporting it or some other objectives
  4. KNOW – The estimated cost at completion based on where you are at today
  5. KNOW – Your customer and who among the customer population is prone to direct out of scope effort.
  6. KNOW – WHEN TO SAY “NO” to “Scope Creep” and say it officially in writing to the contracting officer specified in your contract.

The remainder of this article will discuss the three most common processes that contract disputes undergo when the baseline is in dispute and selecting the best method considering the circumstances that exist on the contract.

REQUESTS FOR EQUITABLE ADJUSTMENT (REA)

An REA is most often the first and the least formal step undertaken by a contractor when there has been a clear and recognizable departure from the contract baseline in terms of events that warrant cost, schedule, technical performance or terms and conditions parameter modification.  It does not start the formal claims process under FAR with associated interest implications.

Submitted in the form of a proposal for contract change, the REA cites the “Before and After” conditions of the contract baseline and the details regarding the delta.  Implicit in the submission are actual cost records, documents regarding government actions and guidance, an estimate of the new baseline impact in terms of cost, schedule or technical modifications to the agreement and a request for contract change.

The government agency may approve or deny the proposal, further negotiate the details with the contractor and may or may not modify the contact.  The following article is an excellent guide to use and preparation of REA’s:

Difference Between REA’s and Claims

ALTERNATIVE DISPUTE RESOLUTION (ADR)

ADR takes advance planning on the part of the government agency and the contractor.  Not every government contracting office chooses to place an ADR clause in contacts they execute.  Not every contractor is willing to accept one at contract award.

ADR is intended to be an alternative to the REA and formal claims process, whereby the government and the contractor agree in advance to place an ADR clause in the contract and subject any dispute that arises to the ADR process for resolution.

Below is a quote from the FAR on the use of ADR:

33.214  Alternative dispute resolution (ADR)

(a) The objective of using ADR procedures is to increase the opportunity for relatively inexpensive and expeditious resolution of issues in controversy. Essential elements of ADR include—

(1) Existence of an issue in controversy;

(2) A voluntary election by both parties to participate in the ADR process;

(3) An agreement on alternative procedures and terms to be used in lieu of formal litigation; and

(4) Participation in the process by officials of both parties who have the authority to resolve the issue in controversy.

(b) If the contracting officer rejects a contractor’s request for ADR proceedings, the contracting officer shall provide the contractor a written explanation citing one or more of the conditions in 5 U.S.C. 572(b) or such other specific reasons that ADR procedures are inappropriate for the resolution of the dispute. In any case where a contractor rejects a request of an agency for ADR proceedings, the contractor shall inform the agency in writing of the contractor’s specific reasons for rejecting the request.

(c) ADR procedures may be used at any time that the contracting officer has authority to resolve the issue in controversy. If a claim has been submitted, ADR procedures may be applied to all or a portion of the claim. When ADR procedures are used subsequent to the issuance of a contracting officer’s final decision, their use does not alter any of the time limitations or procedural requirements for filing an appeal of the contracting officer’s final decision and does not constitute a reconsideration of the final decision.

(d) When appropriate, a neutral person may be used to facilitate resolution of the issue in controversy using the procedures chosen by the parties.

(e) The confidentiality of ADR proceedings shall be protected consistent with 5 U.S.C. 574.

(f)(1) A solicitation shall not require arbitration as a condition of award, unless arbitration is otherwise required by law. Contracting officers should have flexibility to select the appropriate ADR procedure to resolve the issues in controversy as they arise.

(2) An agreement to use arbitration shall be in writing and shall specify a maximum award that may be issued by the arbitrator, as well as any other conditions limiting the range of possible outcomes.

(g) Binding arbitration, as an ADR procedure, may be agreed to only as specified in agency guidelines. Such guidelines shall provide advice on the appropriate use of binding arbitration and when an agency has authority to settle an issue in controversy through binding arbitration.”

CONTRACT CLAIMS

A formal contract claim is a significant step in the relationship with your customer.  It acknowledges that the REA and ADR (if applicable to the contract) processes have not been effective in resolving the dispute and refers the matter to a formal claim which has the potential for adjudication.  It also starts the interest clock in terms of government payment liability in the event the agency loses the claim during adjudication.

Below are the major clauses regarding formal contact claims and the certifications by the contractor that apply.  They have significant legal implications.

Claims and Certifications

SUMMARY

When contract disputes or the potential for claims and appeals arise it is best to view each instance uniquely in deciding which of the three avenues discussed in this article may be appropriate.

Contract disputes are serious matters. In the event the impact to the company from a risk perspective is substantial, it is best to involve a law firm that specializes in government contract claims for advice on how to proceed. ”

Smalltofeds – Disputes and Appeals


ABOUT THE AUTHOR:

Ken Fluther - Copy - Copy

Micro Mentor Volunteer Counselor Ken Larson assists many small businesses with their planning and operations processes. Small business owners or prospective owners locate through a background search capability at Micro Mentor.   Ken is a Veteran of 2 tours in the US Army Vietnam and has over 40 years in the Defense Industrial Complex. He spent over 30 years in federal government program and contract management and 10 years in small business consulting. Ken receives many inquiries from small companies wishing to enter or enhance their position in federal government contracting. Volunteer time, books, articles, and resources are 100% free through Small to Feds maintained exclusively for small business.

Cyber Tech Firms Need Integrator Partners to Broaden Their Services

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“WASHINGTON TECHNOLOGY”

“Given the frequency and severity of security intrusions in the public and private sector, cybersecurity companies are now looking for more complete offerings beyond their core capabilities.

By demonstrating an ability to technically integrate with third party vendor products, these companies can show that they are able to more fully meet the needs of Federal government customers.”


“Government agencies are looking for companies that can act as general contractors, but not all companies are system Integrators. Therefore, the goal for many companies is to have the ability to provide a more expansive, holistic offering beyond just their own product portfolio.

That hasn’t traditionally been the case among cybersecurity providers. These companies have typically focused on selling their uniquely specialized products into agencies, which understandably can limit their success in responses to requests for proposals in more comprehensive programs.

For the government in particular, the approach agencies to more easily make decisions on which products to deploy in complex environments.

Let’s look at how some general technical cybersecurity integrations can add benefit to customers:

Multi-Factor Authentication (MFA) – An agency looking to deploy MFA tokens to all their employees will likely need a card management system (CMS) to enroll the certificates stored on the physical tokens. Some companies offer both tokens and a CMS, but particularly when looking for high assurance tokens that were designed with the Federal government in mind, they are unique areas of expertise. Having the ability to vet out, in advance, a working solution that can be jointly offered to a customer simplifies the overall process and allows a customer to more readily select the appropriate vendor.

Storage & Key Mgt Encryption – What’s important here is whether a storage encryption solution can work with a key manager through open standards such as the Key Management Interoperability Protocol (KMIP). This type of interoperability is another way of layering levels of security and creating an overall efficient solution for the customer. It alleviates the challenge of the customer having to validate that the products they purchase will properly integrate in their environments.

Complete offerings – In some cases a company may be missing one element to an overall holistic solution. Among encryption providers, encrypt everything is the Holy Grail. Some come very close to meeting that promise with encryption solutions for web/application servers, databases, file servers, disk encryption, virtual machines, etc. Often, however, what might be missing is the ability to encrypt email and documents. Companies should pool resources to be able to offer that level of encryption and storage with hardware for root key management, to provide an integrated solution for all available data venues.

So after being a bit late to the game on the need to create integrated offerings, cybersecurity firms have come to realize that there is more value to creating a simple means for agencies to ensure their IT security than there is to owning a narrow segment of the market.”

https://washingtontechnology.com/articles/2017/09/29/insights-schatz-cyber-integrator-role.aspx