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Helpful Links
SCS Upcoming Events
TVBA 3rd Annual Business & Education Expo
Knoxville Convention Center
Time: 5-8:30pm (Mon)
8-4:30pm (Tues)
For more information and to register for the event,
Lunch and Learn Series
"What Makes an Accounting System Compliant"
* Hosted by:
Strategic Consulting Solutions At the Oak Ridge Chamber
February 13, 2013
Oak Ridge, TN
Time: 11:30-1:00pm
Laura Davis, President of SCS will be presenting
For more information and to register for the event,
Visit our website often for updates on these and other events.
www.scsconsults.com
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Greetings!
Happy New Year! I hope your holidays were wonderful. Hopefully, you had a chance to relax and spend some time with family and friends. Now we're recharged and ready for the New Year. While the 'fiscal cliff' is behind us, there are still a lot of unanswered questions related to budget cuts. It appears that this uncertainty could be with us for a few more months. It's hard to tell whether pending contract awards will be delayed or if the agencies will move forward with those notifications. But what is certain is that contractors are taking a very cautious approach to their business model. We're seeing companies defer financial decisions until more is known about contract spending. Most contractors are in a holding pattern until they know what direction things are going.
One debate that we've had internally is whether a company should get their infrastructure in place before or after contract award. This has turned into the chicken/egg discussion. One argument is that your chances of winning the contract is higher if you have a compliant accounting system in place, plus you're training and ready when the contract starts. The other side of the argument is that you're not guaranteed of the contract award by having the accounting system in place prior to award. Unfortunately, it's not an easy answer. I think it's something each company has to address for themselves based on their own situation.
For the companies that already have their infrastructure in place, their decisions may be more related to expansion or enhancement of what they currently have. The concept is similar, though, whether to build on the existing infrastructure before or after contract award. Again, there is no easy answer.
However, no matter where you are in your decision process, I would like to wish you the best for the New Year. Despite the uncertainty, I'm very excited to see 2013.
Regards,
Laura Davis,
President
Strategic Consulting Solutions
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2013 Outlook: Budget Cuts Will Hammer Industry
by Sandra I. Erwin
National Defense Magazine
The Defense Department and its contractors begin 2013 with hope for a March deal that will shield the Pentagon from a 10 percent budget cut. But even if Defense is spared from the sequester, the business climate for Pentagon contractors will be bleaker in 2013, analysts predict.
Whereas the defense budget top line peaked in 2010 and has only dipped slightly, projected spending on new equipment already has declined by one-third since 2008 and is on a path to go down another 10 to 15 percent, says Erich Fischer, a partner at the consulting firm Booz & Company.
The reductions in procurement spending have not yet hit home for many companies because the actual outlays of funds lag behind budget projections by two to three years. The budget began to come down in 2008, outlays peaked in 2010 and companies are now starting to feel the effects of a drying funding stream, Fischer says.
Another trend that bodes badly for defense firms is that weapon acquisitions budgets continue to be squeezed by rising military personnel, health and operations expenses.
"Some businesses are seeing decline up close and personal for the first time," says Fischer. More about Outlook HERE
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Tennessee Veteran's Business Association (TVBA) is holding its 3rd Annual Business Expo and Show case
Beginning on January 28th, TVBA will be hosting its 3rd annual Business and Education Expo at the Knoxville Convention Center. This year, in addition to the trade show and hiring aspects of the event, an awards presentation dinner with keynote speaker Jim Haslam, Sr. will be held on opening night. To learn more about the Expo and to register for all of the exciting events, visit the TVBA website HERE |
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Executive Compensation
Excerpt from the Darrell J. Oyer & Company Newsletter
December 20, 2012
www.darrelloyerco.com
DCAA has responded to the JF Taylor decision on executive compensation stating they see this decision as presenting a unique set of facts. (Ed. Note: The only unique set of facts appears to be that the contractor appealed to the ASBCA.)
On the negative side, this may mean that DCAA does not consider the decision relevant to other situations unless the facts are precisely identical-including down to the penny in the amount of compensation. This was the DCAA response to the Ford decision on use of the value added input base-the audit manual essentially stated that unless the percentages of subcontracting were the same as the Ford case, the auditor should not consider the Ford decision applicable.
On the positive side, let's look at the facts. In January this newsletter described eight faults that the ASBCA found with the DCAA audit. First, the
DCAA analysis ignored the actual dispersion of data in surveys and instead applied a 10% Range of Reasonableness (ROR)-a concept accepted in a prior Board decision. Statistically, a median can be derived from a universe that has little variability or significant variability. Thus, we should not expect DCAA to use the ROR but rather the more valid statistical analysis. (Don't count on this because the contract audit manual has not been revised.)
Read more HERE
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5 Issues Facing Small Businesses in 2013
by Joyce M. Rosenberg
NBC News
In 2013, small business owners will contend with many of the same issues that made it hard to run their companies over the last 12 months. Here's a look at some of the issues facing small businesses in the coming year:
1. Taxes
(a) Increases
(b) Budget Cuts
2. Health care
(a) Buy Insurance
(b) Pay Government
3. Lending
(a) Owners in Debt
(b) Banks Uncertainty
4. Onshoring
(a) Companies Manufacturing Back in U.S.
(b) Growing Trend for 2013
5. Skilled worker shortage
(a) Changing Technology
(b) Top Skills Needed
View article HERE |
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Did YOU Know?
SBA REPORTING LEVELS:
While recently working with a client, a question arose pertaining to annual financial reporting levels for 8(a) firms. With our curiosity piqued, we did a little research. In the past, company generated financials were allowed on revenues up to $1M. From there, revenues of $1M to $5M were reviewed, and any revenue over $5M was audited. Take note: the new reporting level thresholds have doubled! Companies with less than $2 million in revenue must submit to the SBA an annual statement prepared by in-house or licensed independent public accountant. Participants with gross annual receipts between $2 million and $10 million must submit to SBA within 90 days after close of the fiscal year (the servicing SBA Director may waive requirements). Over $10M in revenue allows 120 days to report to the SBA after the close of the fiscal year.
As always, there are caveats to the guidelines. Read the entire SBA statement HERE
and scroll to section 124.602.
GOVERNMENT MILEAGE RATE CHANGE!
Effective January 1, 2013, the government mileage rate for use of private vehicles is $0.565
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A Plea for Teeth in Small Business Subcontracting Rules
by Bill Flook
Washington Business Journal
The federal government needs to put "some real teeth" into the consequences for contractors that miss small business subcontracting goals, COMTek President and CEO Joseph Fergus told a crowd Thursday morning.
Fergus, speaking on a panel on subcontracting at the Tower Club in Vienna, made a broad plea for tougher penalties for big prime contractors who brush off small business requirements, at one point eliciting applause from the audience. Too often, he said, contractors are missing that requirement and getting away with writing up a paragraph-long explanation that essentially says, "Hey, we tried." More about article HERE |
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Pentagon Will Have to Shed Thousands of Jobs During Next Few Years Under Bill
by Kellie Lunney
Government Executive
The Pentagon will have to shrink its civilian and contractor workforces by thousands of jobs during the next five years under a provision in the fiscal 2013 Defense authorization bill that House and Senate conference negotiators approved on Tuesday evening.
The legislation directs the Defense secretary to rebalance and reduce the civilian and contractor workforces from fiscal 2012 through fiscal 2017 by a rate that is at least equal to the percentage of funding saved from planned troop reductions, or 5 percent. The bill also gives the Defense Department discretion over whether to exempt certain mission-critical jobs, including medical services and maintenance of military equipment, from the cuts. The provision means the department could shed up to 36,000 jobs during the next few years.
More about Pentagon HERE
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* Oak Ridge News *
Bechtel, Lockheed Martin Team Wins Y-12/Pantex Contract
by Frank Munger
Knoxville News Sentinel
A team headed by Bechtel and Lockheed Martin has been selected to manage two of the nation's key nuclear weapons facilities - Y-12 in Oak Ridge and Pantex near Amarillo, Texas, according to multiple sources familiar with the pending announcement.
The new contractor will be called Consolidated Nuclear Security LLC. The National Nuclear Security Administration, a part of the U.S. Department of Energy, is expected to make the official announcement today and tout the potential savings to the government by consolidating management of the two production plants, even though they are in different states and 1,000 miles apart.
The team selected for the job has a ton of experience in the DOE contracting world, and both Bechtel and Lockheed Martin have deep roots in Oak Ridge. ATK, a defense and aerospace company with headquarters in Virginia, is also part of the winning team. Read more HERE
New EnergySolutions Owner to Keep Oak Ridge Team
by Frank Munger
Knoxville News Sentinel
Nuclear services company EnergySolutions, which has a significant presence in Oak Ridge, will be acquired by a subsidiary of Energy Capital Partners II LLC, the companies announced Monday. The value of the transaction was placed at $1.1 billion.
"Under the terms of the agreement, EnergySolutions' shareholders will receive $3.75 in cash for each share of common stock. This represents a premium of approximately 20 percent over the average closing share price of EnergySolutions' common stock for the 30 days ended January 4, 2013," the announcement said.
EnergySolutions' Oak Ridge operations include the Bear Creek waste-processing complex. The Salt Lake City-based company also has operations in Kingston and Memphis.
EnergySolutions said the "definitive acquisition agreement" had been unanimously approved by the company's board of directors. ECP plans to operate EnergySolutions as a "standalone business operation" with the current management team staying the same. More HERE |
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Prompter Payments
Darrell J. Oyer & Company Newsletter
December 31, 2012
www.darrelloyerco.com
A proposed rule would add a new clause to the Federal Acquisition Regulation to require accelerated payments to small business subcontractors. The rule would implement the temporary policy provided by Office of Management and Budget (OMB) Policy Memorandum M-12-16 in July. The proposed rule would require a prime contractor, upon receipt of accelerated payments from the government, to make accelerated payments to small business subcontractors. This would need to be done "to the maximum extent practicable" after receipt of a proper invoice and all proper documentation from small business subcontractors.
The clause would be inserted into all new solicitations issued after the effective date of the final rule and resulting contracts (including solicitations and contracts for the acquisition of commercial items). The rule would not provide any new rights under the Prompt Payment Act or affect the application of its late payment interest provisions.
Read more HERE |
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Additional Reading
With a new year kicking off, trends begin to form and you want to keep up with them in order to stay in the loop. Provided are 4 trending topics in Federal Government Contracting of 2013.
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About Strategic Consulting Solutions
Strategic Consulting Solutions is the leading provider of compliant solutions to government contractors. SCS specializes in Deltek software sales and implementation, complete accounting outsourcing, contract compliance support, contract administration and general accounting support. Whether you are new to contracting, or a seasoned contractor managing multiple, complex projects, we can help you to understand government cost accounting requirements, implement systems and processes to achieve compliance, assist you through DCAA audits, and help you accurately manage and streamline your business processes. Our team consists of professionals with extensive finance and government contracting experience. We understand the complexities of government contracting and strive to help our clients find the appropriate solutions to all of their contracting issues. |
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We focus on compliance
so you can focus on your business |
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