Redstone Government Consulting Blog | Redstone Team (14)

Having a well-defined travel policy is important to your employees, managers, accounting staff, contract customers, and auditors. A one-size-fits-all policy may be suitable for some companies, while others may benefit from having multiple policies focused on the business base and/or contract requirements. 

Although many of us think of contract disputes as those involving a prime contractor and a U.S. Government agency, subcontracts can also trigger differences of subcontract interpretation between the prime and subcontractor. In Civil Action No. 1:16-cv-215, the United States District Court for the Eastern District of Virginia decided a diversity breach of contract case between government contractors (the contractor and subcontractor names are a matter of public record, thus disclosure). Fluor (the subcontractor) contended that they did not agree to a 2.3% cap to their G&A on a proposal effort with the United States Air Force. Their proposal, as a subcontract to their prime contractor, PAE, was ultimately selected for the award, at which time, a subcontract agreement was executed and the two parties began their respective performance on the contract. The specific language of that subcontract agreement is the heart of this case (differentiated from a dispute over the regulatory language contained in a subcontract flow-down).

Is your purchasing system ready for a DCMA Contractor Purchasing System Review?  Time to dust off those policies and procedures, and make sure your employees are trained on FAR and DFARS requirements.

DCMA has been hard at work reviewing contractor purchasing systems, making several updates in 2016 to the CPSR Guidebook, the most recent being January 18, 2016.  In addition, in October 2016, the Director of DCMA issued a Class Deviation from FAR 44.302(a), increasing the CPSR threshold from $25 million to $50 million.  Questions remain on how this will impact contractors whose contracts include FAR 44.3 and who are on DCMA’s review schedule.  The threshold can be lowered if the ACO determines a contractor’s risk level warrants a review.  We have already seen the lower threshold enforced in the early part of 2017 for a couple of our clients.

For most small businesses - and especially for those in the early stages of their life cycle - Quickbooks is an excellent option and an almost fundamental starting point when considering an accounting software from which to grow your company. It is cost effective, easy to use, and given its popularity and presence in the market, training resources are readily available. But is it a viable option for Government Contractors?

We often hear the following statement and question: “My proposal (the government solicitation) calls for a compliant accounting system (SF 1408) and I’ve never been audited.  What do I do?”.

Whether you are new to government contracting or have been “in the game” forever, it’s not unusual for employees to get caught up in the events of the day and overlook the importance of obtaining and maintaining adequate supporting documentation in the support of pricing proposals (pre-contract award) and actual costs – both direct and indirect (post-contract award).  In a perfect world, employees are properly trained on adequate supporting documentation and documenting the appropriate files accordingly. But we aren’t living in a perfect world, and we even debate over what adequate supporting documentation entails.

It’s a busy time of year for us and many of our clients, but I wanted to take this opportunity to remind all of our readers of a few upcoming things to keep in mind. For most of our clients, January was a whirlwind of closing 2016 and getting all W-2s and 1099s completed. February will be spent ramping up for financial statement audits and the corporate tax deadline, but for government contractors there’s also a few extra things to do this time of year.

Understanding the requirements and/or selection criteria before preparing a fully responsive bid to a government solicitation cannot be understated. In a recent decision (B-413559.2; B-413559.8) by the Government Accountability Office (GAO), two separate government contractors’ protests questioned the government’s evaluation scheme. Specifically, the protesters argued that certain terms contained in the request for proposal (RFP) were unduly restrictive. The protestors were ultimately challenging their respective elimination from competition based on the fact that they did not score high enough to be included in the top 60 technically rated offerors.

Adhering to the requirements of a government solicitation is paramount when submitting a proposal. In a recent decision (B-413104.5; B-413104.6) by the Government Accountability Office (GAO), two separate government contractors’ protests were denied for failure to meet the explicit requirements of a solicitation for the Department of Health and Human Services, National Institutes of Health (NIH). The protestors were ultimately challenging their respective elimination from competition based on the fact that the non-responsibility determination should have been referred to the Small Business Administration (SBA) under SBA’s certificate of competency (COC) procedures.

Service Contract Labor Standards and Davis-Bacon Act

Government contractors are subject to many rules and regulations, and many contractors don’t always pay attention to the labor standards requirements incorporated into their contracts. Employers often worry about ensuring employees are properly being paid overtime and classified as exempt or non-exempt, but is your company really paying the appropriate pay rate and benefits that may be part of your contracts? Odds are if your company is performing services under a federally funded government contract, the Service Contract Labor Standards (SCLS), Davis Bacon Act (DBA), and/or Collective Bargaining Agreements (CBA) are likely part of your contracts.