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Government Contractors' Newsletter |
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For the serious small government contractor |
October 2011 | |
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COST & PRICING DVD
COMPASS (most popular), NAVIGATOR, or GUIDE Pack
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 Greetings,
Yes indeed, It's Fall and heading into Winter. Hopefully very slowly and very gently, despite the snow in the north!
Don't forget to remind your employees, and you (smile), of their responsibility for current and accurate timekeeping.
Also, review with appropriate staff the basics of direct versus indirect costs and accurately assigning costs/time to jobs/contracts/products, also your company unallowable costs, and how to report any policy violations they suspect.
These reviews/reminders can be done as simply as during any staff meeting. This will show your companies commitment to self-governance which can minimize any fines, penalties, or interest if a violation is discovered.
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We have over 6,500 small to medium size firms (and yes some large firms also), also numerous government people, that regularly receive and read the newsletter!
A large number of these firms also visit your online contractor community to get answers and ideas on how to handle various "real life" issues in a practical and meaningful way. We are happy that so many are being helped by the information provided and we appreciate those who are supporting us as VIP monthly or annual subscribers.
Don't forget to visit your community site regularly and browse using search terms of interest to you. You may be surprised that some of your questions may be addressed that will save you time, money, and frustration. At least on some issues. As you browse you may also find articles on issues you have not even had time to think about.
Even if you are a Regular Free member, there are some good articles, tools, and resources that are unrestricted that may be helpful. Don't know how to get to your online contractor community site? Just follow one of the links on the articles in this newsletter, then add to your favorites.
And please, don't forget to browse the Inspirational Section on your community site and get re-charged and inspired. So have at it!
Finally, some of you had Septembers Newsletter bounce back to us. Please remember to set your security to allow the address [paulgunn@paulgunn.ccsend.com] that sends the newsletter so you don't miss anything!
You can go to your online contractor community site to read the articles that you may have missed.
Have a productive and blessed day.
Enjoy this issue Paul Sr.
You can send comments/suggestions directly to me at paulgunn@paulgunn.com
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6 Deadly Words To Avoid In A Proposal
Note: This is not legal advice but guidance based on experience!
1. Best Efforts. Courts have interpreted best efforts to impose a very strict legal obligation, one that goes well beyond a companys normal duty to a client.
Alternative: Reasonable efforts.
2. Ensure. This word may create a binding legal obligation that a client can enforce in court. This word can be particularly dangerous in a T&M project, since it may imply that you are committing to a fixed-price/fixed-time obligation.
Alternatives: Will assist in or will use reasonable efforts to.
3. Guarantee. Using this word essentially amounts to a warranty, and you could be held accountable for it.
Alternative: .................
Follow this link for more |
8(a) New Business Development Agent or Commission Fees - Know the new guideline under 13 CFR 124.4
Please review the restrictions on fees for Applicant and Participant Representative Fees!
13 CFR 124.4
Inquiry:
What restrictions apply to fees for applicant and Participant representatives?
Response:
(a) The compensation received by any packager, agent or representative of an 8(a) applicant or Participant for assisting the applicant in obtaining 8(a) certification or for assisting the Participant in obtaining 8(a) contracts, or any other assistance to support program participation, must be reasonable in light of the service(s) performed by the packager, agent or representative.
(b) In assisting a Participant obtain one or more 8(a) contracts, a packager, agent or representative cannot receive a fee that is a percentage of the gross contract value.
According to this federal guideline, you must be aware of this and structure any compensation so that is does not result or appear to be a PERCENTAGE of the GROSS Contract. Now those who read the FINE PRINT may see words like GROSS Contract and wonder if this needs clarity as to Gross or Any Part of the Contract. This could provide an option for applying a percentage.
Or, for those who want to really look closer, There is another Regulation - 48 CFR 31.205-38(c) states that: Notwithstanding any other provision of this subsection, sellers' or agents' compensation, fees, commissions, percentages, retainer or brokerage fees, whether or not contingent upon the award of contracts, are allowable only when paid to bona fide employees or established commercial or selling agencies maintained by the contractor for the purpose of securing business.
Is there a conflict in the Code of Federal Regulations? You be the judge! The point is that you should check with your Local SBA 8(a) Office to get clarity on how they will apply the regulations.
Feel free to provide any feedback or comments to help guide our members.
Follow this link for more articles back to top |
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Non-Manufacturing Rule - Good to know
Manufacturing appears to be growing as the focused industry for political reasons and therefore funding and contracts. Therefore, understanding the non-manufacturing rule as how it impacts the small contractor is important. The following article should provide some guidance. Don't forget to review the latest FAR or CFR references for any more recent changes to this important regulation.
Inquiry - How does one apply the non-manufacturing rule when most manufacturers of IT products for example are large and the resellers are small?
Response - The non-manufacturing rule, found in part 19 of the Federal Acquisition Regulation (FAR), is complex, often confusing and difficult to properly apply. The definition of the "non-manufacturer rule" is found in FAR 19.001 and reads as follows:
"Non-manufacturer rule" means that a contractor under a small business set-aside or 8(a) contract shall be a small business under the applicable size standard and shall provide either its own product or that of another domestic small business manufacturing or processing concern (see 13 CFR 121.406).
The specific non-manufacturer rule policy is located at FAR 19.102(f)(1)-(7). Stating this rule using "plain" English- the "non-manufacturer" rule allows a small business to offer a product that it did not manufacturer under a small business set-aside if the Small Business Administration (SBA) has offered a waiver. Paragraphs (4); (5); and (7) of FAR 19.102(f) provide the three methods of obtaining a waiver. Remember that the waiver allows for a small business to qualify under a small business set-aside when it is NOT the manufacturer but is a reseller of a large business product instead.
The three means of obtaining a waiver, along with some commentary, are as follows:
The first method of "waiving" a small business from having to be a manufacturer of the product in question is to see if the SBA has included a class waiver for the product. The series of class waivers may be viewed at the SBA website at . This list of approved class waivers contains only a few Information Technology items, most notable of which is mainframe computers and peripherals as well as computer laser printers. Of course this is not helpful for laptops or desktops, many of which are not manufactured by small businesses.
(4) In the case of acquisitions set aside for small business or awarded under section 8(a) of the Small Business Act, when the acquisition is for a specific product (or a product in a class of products) for which the SBA has determined that there are no small business manufacturers or processors in the Federal market, then the SBA may grant a class waiver so that a non-manufacturer does not have to furnish the product of a small business. For the most current listing of classes for which SBA has granted a waiver, contact an SBA Office of Government Contracting. A listing is also available on SBA's Internet Homepage at . Contracting officers may request that the SBA waive the non-manufacturer rule for a particular class of products.
The second way of obtaining a waiver is found in paragraph (5) of 19.102(f) as follows:
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Demystifying the Pass/Fail, Adequate/Inadequate, of DCAA Pre-award/Post-award Accounting System Surveys/Audits
I was asked to re-post an earlier article on this topic due to the concern of what a small business must be focused on in preparation for this type of audit. As a VIP member you can go to our online contractor community anytime and search to find many articles and information on similar topics.
The Issue
A lot is being said about the DCAA moving to providing only a Pass/Fail option for a firms accounting system. Along with this misinformation are many scare tactics designed to influence the small business to invest large sums into the design, setup and implementation of their accounting systems and related controls.
Yes, it is important for even the smallest firm to begin the learning process and subsequent design of their accounting system and related policies. I do not dispute this. What troubles me is when a small business is coerced into spending more than they should in time, money, and frustration before it is necessary.
The Process and Goal
Establishing a sophisticated accounting and financial system is a "Process". Your systems and policies grow with your firm. You should not buy a Rolls Royce with Ford/Chevy pockets. Both the government and supporting CPA/Consulting firms should understand where a small business is in their evolution and what level of complicated system and policies are truly needed at that point.
I have been teaching, defending, and advocating this concept for years. Yes I do want all my clients, workshop attendees (Live or DVD), and small businesses to have acceptable and adequate accounting systems and related policies. And that is the "Goal". It starts with an understanding of the where the firm is currently and where is has been. Have the systems been adequate and acceptable for their status thus far? If not, then the firm needs to work on changes regardless of additional government proposed effort. They need adequate financial data according to GAAP and the IRS. Which by the way are also requirements under government guidelines.
Related Information
I recently wrote a detailed article on this very topic in another Newsletter. Many members found the article extremely helpful as they discussed their situation with the auditor, but more importantly with the Contracting Officer. Having a better understanding of what requirements apply, when, and under what circumstances, empowers you to confidently discuss options. Follow this link to read the article. Recent Auditor Feedback
Recently I talked with current DCAA auditors, who have been around for awhile, about this pass/fail adequate/inadequate issue. My opinion from these discussions is that the only difference, recently in place, is the determination if a firms accounting system is Adequate or Inadequate. The option for "Inadequate in Part" is no longer applicable. And this opinion is typically only under a post-award accounting system audit, not a pre-award survey. But let's take a closer look....
Follow this link for more back to top
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 What IF?
If you never felt pain, Then how would you know that I am a Healer?
If you have never been prayed through, How would you know that I am a Deliverer?
If you never had a trial, How could you call yourself an over-comer?
If you never felt sadness, How would you know that I am a Comforter?
If you never made a mistake, How would you know that I am forgiving?
If you knew it all, How would you know that I would answer your questions?
If you were never in trouble, How would you know that I can come to your rescue?
If you were never broken, Then how would you know that I can make you whole?
If you never had a problem, How would you know that I can solve them?
If you never had any suffering, Then how would you know what I went through?
If you never went through the fire, Then how would you become pure?
If I gave you all things, How would you appreciate them?
If I never corrected you, How would you know that I love you?
If you had all power. Then how would you learn to depend on me?
If your life was perfect, Then what would you need me for?
Signed,
Jesus
follow this link for more inspirational thoughts back to top
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