Redstone Government Consulting Blog (54)

The GSA Office of Inspector General (OIG) is actively investigating alleged fraudulent third-party activity in GSA’s System for Award Management (SAM). At this time, a limited number of entities registered in SAM are suspected of being impacted by this illegal activity. GSA has taken proactive steps to address this issue and has notified the affected entities.

The Department of Labor’s Wage & Hour Division has announced a new pilot program expected to launch next month. This initiative, referred to as the Payroll Audit Independent Determination (PAID) program, will allow employers the opportunity to voluntarily correct employee pay and accounting errors which violate the requirements of the Fair Labor Standards Act (FLSA).  Though an official launch date has not been announced, the program is set to run for an initial 6 months and is open to all FLSA-covered employers who have not already been sued and/or who are not currently being audited by the Department of Labor (DOL). Eligible employers may enroll online shortly after the launch date (see “How to Enroll” below) and participate in the PAID program through the end of the pilot.

Timekeeping compliance is a combination of several critical pieces, involving everyone within an organization. With specific requirements for government contracts, it is crucial to develop a structure and process for timekeeping and compensation in government contracts. Here are some considerations when reviewing your company’s timekeeping compliance:

How does one ensure the financial success of one’s government contracts? If we were to poll twenty-five different government contractors, we would likely get 25 different responses, and most wouldn’t be wrong. Some would say it takes a great program manager, while some would say it takes executive management committed to providing the necessary resources. Others might say it depends on the type of contract being worked or the type of fee being earned. All of these would be correct.

As incurred cost audits are becoming more prevalent and voucher audits are taking off like wildfire, there is emphasis placed on the use of work authorizations by government contractors.  There is no specific regulatory authority that can be cited which requires work authorizations as a part of a contractor’s Labor/Timekeeping System.  This argument, although accurate, is not the rationale which will be used by a DCAA auditor when “disclosing” deficiencies in a contractor’s labor system and ultimately rendering an inadequate opinion with respect to the accounting system, when the work authorization process is absent. 

As we near the end of calendar year 2017, many will be thinking of some resolutions for the upcoming “Year of the Dog” (the 2018 animal per the Chinese Calendar). In fact, we’ve discovered that Government agencies sometimes consider similar resolutions, and in the case of DCAA (Defense Contract Audit Agency), we’ve accidentally been copied on one of the unofficial versions of its 2018 New Year’s resolutions (which are three months late, given the government fiscal year started October 1, 2017).

It seems like there are a lot of agencies being audited on what they are doing with DCAA audit findings. In September, the DoD-IG announced an audit of 26 contracts issued from FY 2014-2017 by Navy, DLA, Army and Air Force contracting officers. It’s stated objective is “to determine whether contracting officer actions during contract negotiations complied with acquisition regulations when contractor proposals were deemed inadequate by the Defense Contract Audit Agency (DCAA).”  At the same time, they announced an audit of DCMA with an audit objective “to determine the appropriateness of contracting officer actions to resolve and disposition compensation costs that the Defense Contract Audit Agency (DCAA) has questioned in audits of DoD contractor incurred cost claims submitted to the Government.

Organizational Conflicts of interest have increasingly gained attention from the Government and Government contractors.  Organizational Conflicts of Interest (OCI) are discussed in the Federal Acquisition Regulation (FAR) subpart 9.5.  OCI rules are meant to prevent conflicting roles or unfair competitive advantage in government contracting.  Assessment of OCI is very fact specific, and mitigations should be sculpted to fit your contracts and situation. 

Every year I write a Thanksgiving blog, reflecting on the growth of our firm, how awesome our employees and customers are, and the privilege we have every day to be able to serve and truly make a difference in the lives of our clients. As founder and CEO, I have been solely focused and driven to meet our targets, budgets, goals and have worked as hard as ever.