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Government Contractors' Newsletter |
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For the serious small government contractor |
August 2011 | |
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COST & PRICING DVD
COMPASS (most popular), NAVIGATOR, or GUIDE Pack
(as low as only $395.00)
Ideal Ongoing Reference Tools
Recorded Live
Serious Contractors Own a Pack
Cost effective alternative to attending live workshop.
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 Greetings,
I would like to thank the El Paso, TX 8(a) Association and particularly their Board of Directors, for hosting and sponsoring the Cost & Pricing Workshop, Part 1, in July. And thanks to all of the attendee firms. We had almost 40 enthusiatic people. Special thanks to IDA's, Von Washington and his staff, and those from the Hispanic Chamber who made the workshop a success for all attendees. The firms are now armed with knowledge, tools, and resources to assist them in this challanging government contracts market.
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I have been busy responding to firms and organizations nationwide that have requested and sponsored my workshops in their location and for individual consulting.
However, I continue to be asked when my next open workshop in Huntsville will be and I have not forgot about all of your inquiries!
To this end, I am providing you with advance notice: I have identified the 3rd Week in OCTOBER (I am now confirming availability of training room prior to final date) here in Huntsville, AL as our next workshop - Cost & Pricing for Government Contractors, Part 1 and Part 2.
You can still attend either one or both days. Those who have already attended Part 1 or who ordered, and viewed, the DVD on Part 1 can sign up for just Part 2 if desired. 7.0 CPE credits each day.
So there you have it. I will be sending out a confirmation notice of the dates as soon as we have the training room confirmed.
Now I would like for you to do your part. Please send me an email if you are interested so I can gauge overall interest as we move forward. Just a quick note of serious interest, no commitment, would be appreciated at this time.
Base on my schedule, this will most likely be my final open workshop during 2011. You do not want to miss this opportunity.
Have a productive and blessed day as I keep all in prayer.
Enjoy this issue Paul Sr.
You can send comments/suggestions directly to me at paulgunn@paulgunn.com |
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For those who asked about the Pool and Base Sample Spreadsheet Template to practice with:
Please feel free to also browse throughout our main website and online community.
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Rocket City GovCon Conference (RCGC)
Huntsville, Alabama
September 22, 2011
We have the best of the best lined up as speakers ---- with topics to educate, inspire, and create.
To Find Out More Visit www.govconconference.com
where in one place you can read the what-when-who about the conference!
10 CPE A&A credit hours approved. |
Indirect Pools and Bases - Are we Double-Dipping? Advantages/Disadvantages to Number of Pools (2 or 3)?
INQUIRY: Hi Paul, took your class the other day in El Paso, TX and have Two Quick Questions:
(1) I'm trying to decide on 2 Pools or 3 Pools. Some in our company feel that having 3 Pools (FOG) makes us appear better organized and that the government prefers to see 3 Pools. Others feel that 2 Pools (O-including Fringe and G&A) is adequate. Does the government actually have a preference?
(2) If we go with the 3 Pools can we "double dip" the direct labor as a base for Pool 1 and Pool 2? Could this "double dipping" be a good reason to use 2 Pools instead of the 3?
I hope that I am interpreting the information that we learned correctly. Please let me know if I am not understanding. Thank you so much. We all enjoyed your class so much we are hard at work implementing the new systems.
RESPONSE: Good Questions, and it is good to see you reaching out for confirmation and checking your process Prior To any potential audits and to ensure you are pricing to recover all allowable cost. As you will see, there are no Quick Questions in Government Contracting!
One advantage to having a Fringe Pool separated is that it isolates these cost for analysis and in many cases the government may ask for the rate. Whether they do or not, you would have the rate and cost readily available, especially during the proposal phase of developing your cost proposal or to meet any SCA reporting requirements.
In addition, there is a psychological benefit because the separate rates will generally be smaller than when they are combined so it "looks" better.
I would consider moving to 3 pools if you find it is requested more during the proposal stage or if you want to move toward reviewing and analyzing the Fringe and Other Overhead Cost or Rate separately.
Your calculations appear accurate except for one oversight. Whenever you chose a base for a pool you must apply the rate for that pool in the same manner as you calculated it. So, since you used.........
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The Small Contractors Accounting System
Pre-award versus Post-award - Survey versus Audit - Understanding the Intent and Letter of the law as it pertains to small prospective contractors accounting systems.
Despite all of the various focus and opinions that are discussed on this topic, the following depicts my SME interpretation and preferred applicability of the current guidance and objectives to auditors, government procurement staff, and the small contractor as it relates to the pre-award survey of the accounting system, and the post-award audit option.
The interpretation of the guidance and ensuring the customer requesting the review understands the options they have and the limitations of a small contractor are important to this process. The post-award audit option is an important issue that the requesting customer should be aware of. As a contractor, you should know what to share when supporting your opinion.
According to the DCAA Audit Program and DCAAM 7640.1Guidance The major objectives of the pre-award audit are to obtain an understanding of the accounting system to appropriately complete the Pre-award Survey of Prospective Contractor Accounting System, SF 1408, and to opine as to whether the design of the contractor's system is acceptable for the award of a prospective Government contract.
Let's break this down and explain what it means to you the contractor.....
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Bid and Proposal (B&P) Labor Tracking and Splitting Unallowables between OH and G&A
INQUIRY 1: B&P labor - didn't you say something about recording B&P labor as direct labor? If so, where can I look that up online to make sure we're doing it right?
RESPONSE 1: The FAR at 31.205-18 provides that all contracts (whether CAS covered or not) are partially subject to CAS 420, more specifically those provisions pertaining to the cost identification and accumulation provisions of CAS 420. CAS 420 requires that contractors identify and accumulate B&P costs by individual project. The CAS also requires that B&P projects be accounted for in the same manner as contracts, and include costs that would be treated as direct costs of that contract, if incurred in like circumstances, and........... follow this link for more
INQUIRY 2: Unallowables - I remember you saying something about splitting our unallowables between OH and G&A. Where can I look to get a clear understanding of how this should be broken down?
RESPONSE 2: This is referred to, somewhat indirectly, in several FAR clauses with one at the FAR 31.203(c) provision as it reads, indirect costs shall be accumulated by logical cost groupings with due consideration of the reasons for incurring such costs. This means costs should be identified and accumulated in the same manner under like circumstances, regardless of their allowability.
If a cost would normally be considered Overhead but is excluded from the Overhead Pool because it is unallowable, then that cost would be considered an unallowable Overhead costs. If a cost would normally be considered G&A but is excluded from the G&A Pool, then that cost would be considered an unallowable G&A costs. In addition.......
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Travel Vouchers - Options for handling how timing of processing impacts accuracy
Paul, we need some advice! Currently, we have no credit card available for travel. When our employees travel we give them a travel debit card to use for all expense which hits our travel expense bank account. Some of the employees are putting everything on it including meals. Then they hand in a travel voucher which has the per diem rate for meals based on location of travel.
The issue we have is we cannot reconcile with them the per diem amount and the amount they have already spent on the debit card in a timely manner and we end up paying for both already charged meal expense and then the per diem on the voucher. We would like to control this better.
RESPONSE: Why do you pay them twice? If they are charging the meals, along with all other travel cost on a debit card, then why not change your policy for reimbursement to a later time once the voucher and debit card charges are reconciled. It should not be a hardship on the employees since it sounds like most of the expenses are charged and paid up-front by the company. There are other options to consider and issues to be addressed under this scenario including........
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Backing Up Your Data
No matter its size, your company's data is its most valuable asset. Think about it: what would you do without your financial or customer records? How long could your business survive without access to the information you rely on every day?
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Our Backup is Secure, Fast and Inexpensive |
Yet many business owners who diligently insure their businesses or property don't have a contingency plan for their data. Considering the variety of possible data threats to your business-including hard drive crashes, theft, computer viruses, software corruption, natural disasters, and even human error-your unprotected data is living on borrowed time.
The ramifications of a major data loss are so great that most companies that have the misfortune to experience it don't survive more than six months.
Different types of backup
Some people backup their personal data-like music or photos-on CDs or external hard drives. But portable media used for backup are prone to failure, can be lost or stolen, and are difficult to organize and store. Plus, restoring your files can be a difficult and cumbersome process.
A business needs a much more secure method and a more scalable solution.
Some companies have an onsite server room. But those require a hefty investment-not to mention the staff to maintain them. The capital and expertise required for onsite data storage are beyond the technical and financial capacity of most small and medium businesses. And it still doesn't solve the problem of potential theft, damage, or natural disaster.
Online Backup Is Secure, Fast, and Inexpensive
With online backup, you can preserve and restore all of your files in a secure, offsite environment without a major capital investment. We even manage the setup and the maintenance for you, so you can concentrate on your business.
Our solution uses the same level of security that the top banks in the financial industry utilize for safe online banking. Your files are stored offsite in two mirrored data centers located on opposite coasts. Even if your company suffers a flood, fire, or break in, you can be sure that your data is safe.
If you do experience a data disaster-for example, if your computer suddenly crashes-you'll be able to quickly restore your files over the Internet. Online backup works both automatically and continuously, backing up files as you change them. Even if you accidentally delete a file, our system automatically saves a copy of it for you. By cutting out manual steps, we remove the possibility of human error and equipment failure. In addition, our software is compliant with stringent healthcare industry data standards, so you know your data is both safe and secure.
Our online backup solution offers the crucial protection you need to ensure the continuity of your business. Don't leave your most valuable business assets vulnerable for another day.
Contact us today at mymsp@gideon-services.com for a cost effective plan that will fit your needs. |
Is Failure An Option? 
The freedom to fail is vital if you're going to succeed. If at first you don't succeed, you're about average! The people who are really failures are those who set their standards so low, keep the bar at such a safe level, that they never run the risk of failure.
So what can you do when you make a mistake? You take your knocks, you learn your lessons and then you move on. That's a healthy way to deal with a problem.
What we must learn to do is to fail intelligently. As Charles Kettering said, "failing is one of the greatest arts in the world." That makes me smile as I think of how good an artist I must be based on the number and size of my mistakes and failures in life! Kettering gave these suggestions for turning failure into success:
- Honestly face defeat; Never Fake Success (so often seen in todays society)
- Exploit the failure; don't waste it. Learn all you can from it.
- Never use failure as an excuse for not trying again.
What must be avoided is, as Glenn Van Ekeren puts it, "Don't be an excusiologist?" There are 3 types/forms of excuses.
- The first type of excuse is outright denial-refusing to admit any association, involvement or wrongdoing.
- The second form of refusing responsibility is a simple, "It's not my fault" or "It's because of" excuse. This is a true form of scapegoating. Find someone else to blame.
- Finally, we have the "I did it, but..." approach. "But" is the important word here. Exusiologists resorting to this popular antic admit to wrongdoing but then every circumstance in life becomes fair game to be blamed for the error.
The things we continue to excuse will return to haunt us over and over again. Excusiology is a dead-end way of life.
God recognizes we will make mistakes on our lifes journey to reach a state of "right doing". He reminds us as follows: "For a just man falleth seven times, and riseth up again.. (Prov 24:16)". So it is He that I seek to draw my strength and courage from to admit my mistake (no excuses), learn (so as not to repeat), and get up and keep trying (to reach success).
From God's heart to my heart to yours! Paul Sr
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