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Orange

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With apologies to the Crossfit disciples, I’ve been seeing orange lately.

As anyone who enters their 40’s discovers, the body ain’t what it used to be!  You suddenly give a lot more thought to whether your core is strong enough. Such is life.  This past August, I decided to get off my ass and start doing something (versus the three years before where I said I was going to).  Enter Orange Theory Fitness (OTF).  I’ve spent countless hours on the treadmill listening to coaches encourage me to power walk/jog/run through their stages. It occurred to me that the stages very much align with business.

Base

Base in OTF is something that you can hold for 20 minutes without an issue.  Essentially, your heart rate is up, but it’s doable without a ton of effort.

In business, this aligns with steady state.  Let’s hope it is better than status quo, as you are constantly striving to improve.  Your team knows what they are doing and is rocking it out.  Ops is meeting the mission, BD is taking meetings, you are block and tackling and in general, everyone is in “just keep swimming” stage.  It’s comfortable and it is where you start to think you’ve got this whole business thing down pat.

Things to remember during this stage:

  • Too long here equals flatlined growth and decreasing margins
  • Customer relations can get stale with the same old thing
  • Employees can get bored
  • Great for a new team to get comfortable with their responsibilities and interactions
  • Watch your cash flow and your multiplier and make sure all are aligned

Too much time in this phase and nothing changes.  Not enough time and you’ve got burnt out people.

Enter…The Push.

Push

Push is something at a pace that makes you uncomfortable.  Your heart rate is elevated, you can only hold the push for 5 mins, maybe a bit more, but it will wear you out.  It takes most or all of your focus.

A few recompetes are coming up, you’ve got a staffing shortage and your competition just beat you for a new contract.  Perhaps the large integrators are sniffing around to buy the company, or they are pushing you on margins.  Maybe you have a couple of new start programs with important customers that must transition well, and the incumbent isn’t making it easy.

Things to remember during this stage:

  • The team is up for the challenge, but they need to know when it ends.
  • Effective communication is critical. You will waste time in endless meetings or have a duplication of efforts without strong communication. Let your entire company know if folks are taxed.
  • Most of these issues are something you could have predicted. Plan ahead for how you are going to handle them.

Everyone is working hard with long hours and a surplus of meetings, but they see the reward for their efforts.

That is, unless you find yourself in an All-Out after your push.

All Out

All outs push you physically and mentally.  You are at your fastest and you leave nothing in the tank.  You will need to pull from within to get through it.  Most of the challenge is mental.  You can keep this going for only 1-3 minutes.

In business, that may look like: entering a contract win that doubles the company or losing a contract for half your company. It could be  two or three must win proposals hitting at the same time or several key personnel leaving at the same time.  It might entail a complete pivot in offerings or a cash flow shortage.  Speaking realistically, it could be a government shutdown. Are you sweating yet?

Things to remember during this stage:

  • Your leadership team had better be the A team. If you’ve been letting anyone slide during the other phases, now is when you (and the rest of the team) will regret it.  Think about this while you’re in the Base or Push phases.
  • Keep your line of communication open with your customer, your banker and your lawyer. They can help ease the transition burden, fight where you need to legally and most importantly, supply the cash for the bumpy road.
  • Break tasks into small milestones. Focus the team on the next gate to get it done.  Don’t overwhelm everyone with the size of the task that is in front of you.  Have small rewards for these accomplishments – even if it’s just better takeout in the war room.
  • Be appreciative. Understand that this will make you and your team stronger on the other side.  Reflect on what the added benefit is to your company and team.

When you’ve made it through the All Out, your team doesn’t immediately need to go to base, but rather, a rest and recovery phase.

Rest and Recovery

Immediately follows an All Out and allows you to catch your breath and focus on calming your heart rate.  Some people need a lot of rest and recovery to bounce back.  Others need just a bit before they get back to base.  There is no one size fits all answer and your time in rest and recovery may vary depending on how you feel and how much effort you gave in your All Out.

Don’t jump back into base or assume that your team can go back to normal.  Give your team and company time to recover.

Things to remember during this stage:

  • Nothing feels better than a couple of days off without email and a bonus check for your efforts. Send your team away for a long weekend (away from each other!).
  • Let your cash flow recover – make no major investments or outlay of cash.
  • Don’t make any major changes. Just sit with the experience and reflect on lessons learned.  You can change things after the rest and recovery.

Regardless of what stage you are in, keep moving forward.  And keep that core strong!

In order to better prepare in the Base and Push phases, you’ll want to have a strong team at the ready. BOOST is connected to an array of great people and smart businesses that can help to get you where you need to be. Connect with us to help support your business by emailing [email protected].

 

Meet Avantika!

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BOOST LLC is thrilled to announce that the team is growing.
Please give a warm welcome to Avantika Singh!
She will be supporting BOOST’s clients with her specialties in government cost/price volume expertise, strategic pricing expertise, price to win,  financial model development, financial analysis, federal contracting, metrics/measurement reviews, forecasting and more.

We took some time to get Avantika’s thoughts on the following:

Three pieces of advice for growing govcons: 

  • Always be ambitious
  • Business is meant to be grown
  • Don’t get comfortable in your own zone

What/Where is the best resource for growing your network? 

The best resource for growing the network for me has been word of mouth referrals as a consultant.  When you do good work, people trust you and recommend you, so person to person or business to business referrals have been my biggest resource.

What is your “hot take” for finding success in your industry? 

It is important to make mistakes. You don’t learn if you keep winning. Yes, it’s obviously great to win, but making mistakes and losing on a few bids gives you the best experience for long-term success.

What is the most surprising experience you’ve had working in the govcon community? 

What surprised me in this industry when I first started was how close-knit and small it really is, despite having large behemoth companies and small mom and pop shops. It seems like the same usual suspects intersect at various points, and it’s a very good community overall.  Reputation actually matters, don’t burn bridges, and collaboration is the way to go…even with competitors.

Wrap Rate Government Contracting

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Even if you are in a less competitive field or have a unique offering for a customer with a ton of funding, government contractors must monitor and maintain their wrap rates.

Companies can sometimes view this exercise as an annual corporate budget where you occasionally look at how you are doing and often look back and ponder, “What were we thinking?” This is not enough by a long shot.

The best practice is to review your financials each month and include an analysis of how you are performing. You should learn how to complete reviews monthly, make adjustments quarterly and consider a complete overhaul semi-annually to achieve your goals.

What Is a Wrap Rate?

Want an efficient way to determine the competitive cost of labor units before profit margins are added on? You can calculate the pricing of your services and products with wrap rate government contracting.

A wrap rate gives businesses insight into the pricing suited to buyers’ needs. The calculations can help companies decide if their proposal terms will be feasible or too high for the government to accept.

Additionally, the information can assist with forecasting and budgeting. As a result, businesses can plan how much to bid and predict where they stand compared to their competitors.

Calculating Wrap Rates

Calculating wrap rates for government contracting is essential for estimates. The calculation allows contractors to reflect their job costs on project bids accurately.

Generally, you multiply unit costs by the base pay of an employee. The result provides a unit of labor’s base dollar cost. Fringe, overhead and general and administrative (G&A) expenses are applied.

After determining the indirect costs, they’re added to the base dollar for hourly labor costs. Calculating the rates makes you better prepared to measure the actual costs of labor for future projects.

Benefits of a Wrap Rate Formula

An effective formula provides many advantages, including the following:

Effective Calculations

Save time and effort when you simplify the cost calculations for the prices in your proposals. The formula adds all indirect costs to get a single rate, so you don’t have to calculate each indirect expense separately.

Cost Visibility

Gain more transparency about indirect costs when determining the pricing for your proposals. The comprehensive view offers more clarity and accuracy so you can cover all necessary expenses when bidding on a government contract.

Easy Pricing Analysis

Analyze the impact of potential pricing changes so you can make informed decisions. The insight lets you determine the most cost-effective and competitive pricing strategy for your government proposals.

Compliance

Ensure compliance with cost accounting and pricing regulations with the calculations. The rates enhance the credibility of your proposals and minimize the risk of contract disputes or audits.

Flexibility in Developing Proposals

You can make adjustments to your direct costs and profit margins according to each contract’s requirements. The flexibility allows you to customize your pricing proposals to meet government agency needs while maintaining a beneficial pricing structure.

Ways to Lower Your Company Expenses

When evaluating your company’s performance and goals, consider the following:

  • Space: Do you really use it, do you need it and what is your company culture? Larger System Integrators are shedding their bloated infrastructure. Don’t build one unless you’ve got 5-year POP’s with all contractor site rates. And even then, keep it lean.
  • Wellness: When was the last time you competitively shopped your benefits? Or even your broker? Don’t get tied up in the same old “we only have a 2-5% increase, so that’s great” mentality. Depending upon your size, self-funding in some capacity may be of interest. Does anyone use the vision policy? What about dental? Have you considered reducing your contribution?
  • Training: With all of the online options these days, does your team really need individualized training or would an online package work? You could offer this benefit to more employees at a lower overall cost.
  • Education: Consider reducing the tuition reimbursement if very few people are using it. It’s nice to tout to potential new hires, but in reality, it’s not a deal-breaker. If it is, bonus the employee out to cover the costs.
  • Business development: Is the team on track to meet their goals this year, or has performance been underwhelming? It’s time to take stock of what’s working and address what isn’t working so you can make smart business choices and save money in the long run.

Achieve Your Goals With BOOST

Want to learn how to win and maintain more contracts in the GovCon industry? BOOST is ready to help! To learn about our consulting services, contact our team today!

GovCon Lifecycle: Purgatory to Paradise

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The second govmates institute, GovCon Lifecycle: Purgatory to Paradise met at the Northrup Grumman location in McLean, VA. In an authentic meeting-of-the-minds, industry experts discussed topics pertinent to growing the local govcon footprint.

Highlights from the institute include:

Purgatory: That Awful Time Between Submission and Award

  • BAFO’s, How to respond to government requests, FAR compliance, “Gotcha’s”“Proposals are rarely won at submission, but they are lost. If you get an EN – correct, don’t defend.”
    Barry Landew – Wolf Den    “To mechanically lower your price during ENs make sure you revisit trends to see where you can adjust.”
    Avantika Singh

30-60 Day Transition & Ramp-Up

  • Recruiting & Operations (Transition planning, Re-badging, Quality Planning, Customer interaction) –
    “Be sure to stay in touch with your key personnel and others that you bid after you submit your bid.  Fostering this relationship will cut down on your recruiting time.”
    Mary Holmes – BOOST
  • Contracts (Sub-K’s, Negotiations) –
    “Best advice that is not only the most obvious but the most overlooked – did you read the entire contract award and do you know what you are signed up for?  Make sure everyone on the team is aware.”
    Amanda Tyson – BOOST
  • Accounting (Accounting system set-up, Billing requirements, Types of contracts)
    “Make sure you get the labor category paperwork done up front because you could lose money if they don’t meet the qualifications.”
    Giacomo Apadula –  BDO

Opportunities in Loudoun County

  • “Insider baseball on AWS is coming to Northern Virginia. There is still a ways to go, there will be another downselect based on sites.”
    Steven Hargan – Loudoun Economic Development

Now That You’ve Won – How Do You Pay for It?

  • Have your contracts folks review the financing document.  It’s a contractual document – CEOs make sure you know what you’re getting into and completely understand the terms.“Be careful and read the fine print to make sure you’re actually getting the rate you think you’re getting from your financial providers.”
    Matt Stavish

Capture & Business Development for FY2019

  • Be strategic about your capture process – make sure it’s a rolling 36-month pipeline.
  • Focus on both getting onto some of the larger IDIQs (hello Oasis!  GSA Schedule 70!) and on agencies that award independently – who buys from you? 
  • Yes, there seems to be less direct sole sourcing opportunities and more competitively bid set-aside work for 8a’s.
    Kim Pack, Wolf Den

Join govmates to be updated on future opportunities for continuing education and targeted matchmaking! 

Grow Your GovCon Business – BOOST LLC

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Editor’s Note: This Article Has Been Updated November 29, 2022

The ubiquitous aspiration of many a small government contractor is the $100MN revenue mark followed by the sale of their business (no doubt at a lofty multiple) coupled with the purchase of a private tropical island complete with oceanside beverage service.  Much like an old wives’ tale, the reality in such assumptions is lacking but always makes for good fodder at a Tyson’s Corner M&A networking event.

Growing your GovCon

But as you grow your government contracting business, being an island unto your own is exactly the opposite of what your strategy should be. We all covet the position of being the Prime Contractor; subcontractors are always at a disadvantage when it comes to workshare, profitability and customer relationships. However, isn’t having a piece of something better than always going it alone, with zero to show for it?

The government contracting industry is awash with stories of mistreatment by partners, workshare-greedy primes and small businesses who think they simply can do it all.  Most have been subjected to an unfortunate teaming experience that has negatively influenced their thinking, or have bought into the idea that their company is the federal contracting equivalent of Superman and can do anything. Let me be the first to tell you, it’s not. It’s hard to do everything in GovCon, even more so as a small business. Teaming with others will allow you to CREDIBLY expand your capabilities, utilize other’s strengths and provide a more robust solution to the government.

Let Us Help Grow Your GovCon with our GovCon Accounting, GovCon HR, and Recruiting Services

Finding Partners for Your GovCon

How you choose to find and vet a partner is critical. Are you relying on your business development lead’s Rolodex (and why do we still say Rolodex)? Going to the same group of folks for the same boilerplate response is not innovative, nor compelling. Try relying upon a formulaic and methodical approach for teaming by expanding beyond your network to find other like-minded companies with the past performance or capabilities that you need for a winning bid. govmates, an online teaming platform for growing GovCons, can help with this. Once a potential teammate is identified, really vet the company.  Having a similar bidding style, rate structure and overall corporate culture is critical and will help in execution.

Start Using govmates Today

No one likes to go it alone.  There is safety (and revenue) in numbers, especially in the small business federal contracting community.

Need help finding a teammate?  Send me a note at [email protected]

Green

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Do the right thing. It will gratify some people and astonish the rest.
-Mark Twain

In today’s environment of competition, LPTA, race to the bottom (insert any other overused term we throw around in the GovCon world), we all talk about “greening the staff” as a way to cut our costs on proposals. But who really does it and more importantly, who does it successfully?

Typically, we say that in the execution of a 5-year contract, we can move the more seasoned employees to other contracts and replace them with more junior employees who will learn from the best, and do their jobs more efficiently and at less cost. In reality, this means we replace seasoned and expensive employees with less expensive employees under the guise of “career advancement.”

Contractors bet that a year into execution, the government will absolutely LOVE their seasoned SME’s, and therefore will cough up more funding in the out years not requiring the transition of staff.

What happens if that isn’t the case? 

Contractors tell their seasoned SME that they have to take a 20%+ hit on their base salary or they yank them to a more profitable contract and backfill to the minimum labor category requirements with little to no transition or cross-training. The result? A bad taste in everyone’s mouths, most importantly the government.

What if we did what we claimed we would do in our management plans?

What if we told our SMEs in contract kick-off that we were going to start grooming their replacements and incentivized them to help train them successfully?

What if we spent the time to recruit the right person for the transition? A person wanting to work with the agency and grow professionally. What if we made our government customer part of the transition plan and they knew all along that there would be new teammates in the out years?

Imagine if we actually provided the career growth for our SMEs, built our workforce with energized, well-trained folks who could help win the re-compete and, topping it off, actually *gasp* saved the government money?

Yes, it means forethought and planning. Yes, it is harder than just asking for more funding. If you want to grow your company and your team successfully and thoughtfully – try greening the staff.

Just do it the right way, the first time.