Redstone Government Consulting Blog (25)

Contractor compliance with National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171 is back in the news. The Principal Director, Defense Pricing and Contracting (DPC), issued a memorandum dated June 16, 2022, to the Department of Defense Departments, Subject: Contractual Remedies to Ensure Contractor Compliance with Defense Federal Acquisition Regulation Supplement Clause 252.204-7012, for contracts and orders not subject to Clause 252.204-7020; and Additional Considerations Regarding National Institute of Standards and Technology Special Publication 800-171 Department of Defense Assessments.

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Yes, they are! Did your company make it through its year-end and closing of last year’s books? If so, hooray! But is it really over for those that have Government cost-type contract billings? Not really. OK, as the Federal Acquisition Regulation (FAR) 42.704, Billing rates, allows interim payments through contract performance with the intent of making the contracting officer or contract auditor approved provisional billings rates as close as possible to the expected final indirect rates. This allows you to bill your costs throughout the year of your cost-type Government contract billings. Now that you know what the year-end indirect rates really are, there is one more thing to do: adjust the provisional indirect billing rates to actual rates in a Public Voucher (Standard Form 1034). Those year-end indirect rates should be net of any unallowable costs in FAR Part 31, Contract Cost Principles and Procedures. Sounds easy. It really should not be that difficult.

This video and article are the second of a two-part series where we provide an overview of the position of the Department of Labor (DoL) on independent contractor classifications. This series presents a mock audit to give you a first-hand perspective of the types of questions that Department of Labor investigators ask with regard to the all too common issue of whether or not your workers are properly classified under the law. We will provide "red flags" that are often key to the final determination of the Department of Labor and how to address them.

Wow! It’s hard to believe half the year is already over. Summertime brings great outdoor time in the sun, much needed vacations, and a slowdown period of accounting deadlines. Hopefully, the hustle and bustle of year end closing, audits and Incurred Cost Submission are now complete and the summer months can provide valuable work time to catch up with any back burner projects, as well as an opportunity to get a head start on upcoming year-end needs. Here are some suggestions for your third quarter focus:

• Reconciliations
• Backlog
• Training
• Government Fiscal Year Preparedness
• Schedule FUN Time!

This article is under review as a result of EO 141713, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, signed by President Trump on January 21, 2025. As we await further information from OFCCP and the courts, please reference this article for current status and action items.

We hope that the previous blogs have provided a solid explanation as to what an Affirmative Program is and who the Office of Federal Contract Compliance Programs (OFCCP) is. The requirement to maintain a written plan/s and ensure all action items noted within the plan are being executed can be a daunting task. As we begin to steer away from the basics of what the various requirements and components of a written plan are, we will begin to dive into helpful tips and best practices. As shown in the diagram from a previous blog in this series, the establishment of Job Groups and Activity records are critical to establishing a valid Affirmative Action Plan and are therefore worth focusing on.

The Department of Justice (DOJ) announced in October 2021 that they are following through on the launch of the DOJ’s Civil Cyber-Fraud Initiative. This initiative is being used to pursue cybersecurity related fraud when Government contractors and subcontractors knowingly fail to comply with cybersecurity requirements, through the use of the False Claims Act (FCA). The DOJ is asking individuals (yes that means your employees) to focus their attention on potential cyber security noncompliance under the False Claims Act. It only takes one upset employee to report that you are not complying with your reported cybersecurity practices or have an unreported cyber-attack affecting covered defense information. Contractor employees who file a qui tam suit can receive a government payment incentive of 15 to 30 percent of the recovery. There has already been one reported contractor settlement resolving a qui tam suit for a company failing to meet federal cybersecurity standards.

Have you considered populating the contracts module in Unanet with your data, but haven’t taken the time to do it yet? Let’s talk through the benefits of using the Contracts module.

The recent memo from the Defense Pricing Center (DPC) has created quite the stir around the current economic uncertainties in the government contractor community tied to inflation. The unfortunate reality is that for many years, economically speaking, the risk of inflation has been a steady 2-3% and so both contractors and the acquisition professionals on the other side have not had to realistically consider this factor in pricing/negotiating contracts. History has shown us that the threat is all too real and can cause significant hurdles for contractors to weather an inflationary period like we saw in the 80s, early nineties and as recently as 2009. The question of is it transitory or are we headed toward a recession is best left to our friend the magic 8-ball, but I do think there are a few things that all contractors should be aware of during this time.