Redstone Government Consulting Blog (29)

As we approach the third quarter of the year, now is a good time to review your payroll setup and wages for accuracy. I often find that whether the client is a seasoned payroll processor, or new to Costpoint and payroll in general, there can be errors in wages that are not obvious in day-to-day processing. There are numerous actions you can take to prepare for a smooth year end. For example, start by ordering forms early in the last quarter of the year. Many sources for W2s, 1099s, ACA forms, etc. will sell out in January. Also, be sure to register for access to the Social Security Administration for W2 upload since this process can be time consuming waiting on the access codes to be snail mailed.

DoD Inspector General Audit on Whistleblower

We issued a blog in May 2021 addressing the Department of Justice, Inspector General. The IG found that DOJ contracts did not comply with the whistleblower requirements to include whistleblower clauses in the contract, disseminate the rights and protections in writing to employees, and include required information in confidentiality agreements/statements to employees. We indicated we would not be surprised to see the DoD IG pick up on this area and review DoD Contractors.

In 2020 Congress directed through the National Defense Authorization Act (NDAA) that contracting officers be prohibited from determining that the price of a contract or subcontract is fair and reasonable based solely on historical prices paid by the Government. Congress goes on to provide that if the contractor fails to provide data supporting the proposed price, the contractor is ineligible for award, unless the head of the contracting activity (HCA) determines that it is in the best interest of the Government to make the award. Let’s face it they are saying contracting officer should be asking for “cost data.”

The Redstone GCI Costpoint group finalized participation in the Early Adopter 8.1 testing program at the end of June. In this wrap-up we want to focus on the Projects and Contracts modules of Costpoint, as well as some additional highlights for Time and Expense. We are thankful for the opportunity to partner with Deltek on this program and are excited to see the new release of the update in the future.

Overview:

• The EEOC has introduced a new Diversity, Equity, and Inclusion (DE&I) workshop series.
• The US Department of Labor (DOL) announced a Notice of Proposed Rulemaking to create standards and procedures to implement and enforce President Biden’s earlier Executive Order (EO 14026) that will increase the federal contractor minimum wage.
• Unfortunately, the Coronavirus pandemic is still an issue for workplaces across the country.
• The EEO-1 Reporting deadline has been changed again to October 25, 2021.

This video and article discuss the importance of provisional billing rates for government contractors. If you have cost-reimbursable vouchers or progress payments based on costs, you want to make sure you have established provisional billing rates.

On July 9th, 2021, the Department of Defense (DoD)issued a final rule in the Federal Register to implement 10 U.S.C. 2330a which requires the DoD to establish a data collection system to provide certain management information about an awarded contract or task order that is valued in excess of $3 million. This new rule is applicable for the following service acquisition portfolio groups:

• logistics management services
• equipment-related services
• knowledge-based services
• electronics and communications services

You may read the entire rule here.

ASC 606, Revenue from Contracts with Customers, had an impact on the way many contractors recognized revenue related to contracts with the Federal Government. Redstone has covered this topic a couple of times (January 26, 2021 Government Contractor Challenges in 2021 Webinar and May 6, 2021 MossAdam/Redstone Webinar Compliance Changes for Government Contractors). ASC 606 also impacts the recognition of sales commissions. The overarching GAAP matching principle requires that the expense of sales be matched to the recognition of the related revenue.

Overview:

• EEO-1 reporting has been extended once again. The deadline is now August 23rd. Additionally, they have made an improvement to the reports feature on the website to help users have a better experience. 
• EEO Tabulation data from 2014 to 2018 is now available. 
• Biden's new Executive Order (EO) takes aim at noncompete agreements.
• A potential major challenge at the OFCCP could impact the 2020 Final Rule "Procedures to Resolve Potential Discrimination."
• I-9 flexibility is extended until August 31, 2021.
• The US Department of Labor (DOL) announced a Notice of Proposed Rulemaking to create standards and procedures to implement and enforce President Biden's earlier Executive Order 14026 that will increase the federal contractor minimum wage to $15 per hour.
• Department of Labor issued All Agency Memorandum 237 increasing the Health and Welfare benefit applicable to SCA-covered contracts.

This short video and article provide insights into FAR Part 31 – the Cost Principles. We explain what FAR Part 31 cost principles are, when they apply, and why they are important. We also discuss what contracts are subject to the cost principles, how they cannot apply to only some of your contracts and not others, and the impact on your accounting system to accommodate the cost principles.