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BOOST HR

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BOOST Contracts

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Connect with BOOST to discuss how we can help with your accounting initiatives. [email protected]

Introducing BOOST LLC

BOOST was founded to support GovCons as they get to the next level. After reinventing the wheel many times and banging our heads against numerous walls, we have learned what works and what doesn’t. We love working with executives who want to see their organization grow and who value advice from those who have “been there, done that.” We want our small clients to outgrow us. We want our large clients to use us when they need us and then call us back for the next project. We want you to sell your business for the multiplier you want. We want you to be successful.

www.boostllc.net

SCA and ACA…. WTH?

For our readers who have SCA (Service Contract Act) contracts, please keep reading…there’s a whole other level of compliance we’ve gotta get smart on.  For those of you who don’t have SCA contracts, thank your lucky stars, vow that you won’t go after this work without serious soul searching, and move on (Take this as our warning to you!).

Okay, everyone still with us?  As you know, SCA compliance is tedious and painful.  That’s our baseline.  Let’s now talk compliance with ACA (Affordable Care Act).  One thing to remember – ACA applies to all employers, not just those with 50+ employees.

First, SCA dictates that a certain dollar amount, now $4.54 effective July 5, is the new bona fide health and welfare (H&W) rate for all covered contracts executed or bid on after the effective date.

This means:

• If a contract has a new option year, the new H&W rate may be applicable.

• For any new work bid on, the updated H&W rate must be included.

• For those contracts covered by the sick leave EO 13706, the new rate is $4.22/hour.

• Companies will want to contact their Contracting Officer for each SCA contract requesting the timing of the updated H&W rates for the specific contracts

• Remember to ask whether a modification to the contract will be issued (yes!!) or if the H&W rate will be updated at contract renewal/option year (boo!).

Secondly, in regulation with ACA, employers are required to offer minimal essential coverage with their benefit offerings, just like employers with non-SCA staff or pay a fee to the IRS.

• H&W by design was implemented in order to require employers to provide benefits instead of cash in lieu (CIL).

• Technically, not offering benefits could be non-compliant with SCA.

• DOL has provided guidance saying that under ACA, employers will no longer be able to pay all cash (ARE YOU HEARING THIS CIL FOLKS?) in lieu of offering benefits.

 

Finally, with this information come certain risks under ACA and SCA.  Some key elements to consider:

• Offering CIL payments in lieu of benefits does not meet the ACA requirement.

• Employees can potentially waive benefits to receive the CIL and still not have benefit coverage under another qualifying plan.

•Not having a waiver on file could make the employer non-compliant with the ACA mandate.   So yes, insist on the documentation, regardless of what story the employee may tell you.  No documentation = considered not otherwise covered in the eyes of the employer, IRS, and DOL.

• Not offering an ACA compliant plan that meets minimal essential value or minimal essential coverage could put the company at risk.

 

Along with these stormy clouds. We bring you some sunshine in the form of how to combat these risks:

• Offer benefits that are ACA compliant and follow SCA definition of a bona fide fringe benefit.

• Ensure each plan meets minimal essential value and minimal essential coverage.

• Work with brokers and other SCA/ACA experts on the outside if there isn’t someone at the company who understands the SCA complexities.

• Be sure to obtain waivers (proof of insurance) from employees who waive benefits.  Unfortunately, you just can’t take their word for it.  If you’re audited and no documents on file means you’re paying fines.

 

If you’ve made it this far you deserve another cup of coffee (or something stronger depending on where you are in the process). BOOST can help with that too! BOOST LLC is sponsoring the September 25th govmates Institute that will focus on how you can CYA in SCA. (Breakfast and lunch with beer are included! We told you we had you covered.) Register for the govmates institute or contact BOOST for more information, [email protected]

What is a CPSR and Why Should You Care?

We recently told you about the Contractor Purchasing System Review (CPSR) process, and today we will (attempt to) convince you to care about this mega-compliance hurdle. If you want to read more about a CPSR, check out our white paper here.

There appears to be a trend in government evaluations looking for CPSR compliant contractors. CPSR compliance was an extra 500 points for the recent OASIS bid.  Many of our competitors will happily sell you a CPSR package without blinking at the cost or whether you actually needed it.

Who needs CPSR?
First, the main factor we tell our clients is to assess how much subcontracting work they do.  If your business weighs heavily on issuing a myriad of subcontracts or large procurements in support of your prime contract awards, then you have checked the first box to “needing” a CPSR compliance plan.  The remaining boxes are comprehensive.

Second, if a majority of your work is with the DoD, you may want to consider checking out DFARS 252. 252.244-7001, the regulatory birth of what a CPSR compliant system looks like. Finally, if your contract says you have to be CPSR compliant – we hope you already have systems in place to pass an audit before signing the dotted line.

Finally, most organizations do not like or want a CPSR compliance plan because of the heavy administrative burden it places on corporate processes.  Think about the last time you waited for a large GovCon to issue you a subcontract that was allegedly “on fire.”  In most cases, the subcontractor is issued a letter subcontract or works at-risk with an authorization to proceed (also part of the CPSR compliant program) before the “real” subcontract is issued.  This is because nearly all GovCons with CPSR compliance programs have to take several steps to coordinate awarding a procurement.  These steps were put in place to comply with CPSR requirements.

If we have not talked you out of it and you are ready to start the box-checking, administrative hurdles of CPSR land, consider an organization like BOOST that will tailor a compliance plan to fit your organization. We will not open a canned manual and serve it to you on a platter. We exist to add value. We can provide a customized CPSR plan; if you need it.

Using Surge Support to Fill the Gaps and Save Money

Summer is busy for many different reasons in the GovCon community; proposal season, approaching fourth quarter, vacations, summer Fridays, and the list continues. Even though the rest of the world seems to be “summering” it’s go-time for GovCons and things can’t be allowed to slip. Your back office needs to stay on track. If you put important tasks on the back burner, there will be an impact on your bottom line at the end of the year.

 

Surge support is a great way to help with managing these times during the year.  Surge support can be used during busy times, large contract ramp ups (always a good problem to have), extended staff leaves and maybe just because your staff is maxed out and needs temporary support. Surge support can help in several areas; accounting, contracts, Pricing, HR, Recruiting and more.

 

We know your first concern about surge support is budget. We understand. Prior experience shows that surge support can be cost-effective  When you consider the impact of NOT having tasks completed, the shock can be larger than simply paying for additional staff time.

 

Another concern may be ramp up time for surge support staff.  This is where your policies and procedures come into play.  If your house is in order, bringing on surge support will be easier. Even if this is not the case, the time spent to bring a new person up to speed will be worth it.

 

We know, asking for help can be a challenge. Reaching out to a qualified firm who knows government contracting is the best first step for surge support. Sometimes you might not even know exactly what you need, but a good firm will help you. A qualified firm will guide you in structuring tasks and identifying the most effective way to quickly ramp up staff and get the most for your money.

 

BOOST can help with surge support requirements for your back office and get you the help you need, quickly. Email us for help at [email protected].

 

 

 

VAR’s | Speed = Money

As we move into the busy Federal Contracting proposal season, there is one category of GovCon that really feels the crunch at the end of government fiscal year – VARs (Value Added Resellers) or resellers.

This type of company is generally very different than the typical services company. They move to their own drumbeat. The name of the game is speed. When the government is ready to spend, resellers/VARs must be able to react quickly to go on contract, procure, and deliver – all while maintaining compliance with FAR, TINA, and other fun acronyms that govern our GovCon lives.  Oh, and they’re margins are slim – they make their money in volume. Or manage cash flow as they manage distributor and OEM relationships amidst a flurry of customer demands.

The upside? Streamline your process, know what you are doing and there is a ton of work out there with limited competition in the small business space.  Even better, you can do it with a heck of a lot fewer people.

Useful tips for VARs as you go into the prime selling season:

 

  1. Have a central repository for all of your contracts’ paperwork. We don’t mean just throwing the email into a folder and calling it a day. We mean utilizing a streamlined retention and organization procedure. The better organized you are, the easier it is to process.

 

  1. Utilize this streamlined process so you can easily look up and flow down terms as appropriate with the myriad of business relationships that VARs maintain (partners, distributors, vendors, etc.). Pass down the risk where you can and know who is doing what to whom. And do it quickly.

 

  1. Have solid agreement templates that you review at least bi-annually. This way you know, without a shadow of a doubt, what is in your agreement. You can negotiate quickly.

 

  1. Create automated features that allow the sales folks to do a quick data entry that is communicated to contracts – without the need for an email. You already have too many emails.

 

  1. Speaking of contracts, know your vehicles inside and out. How will your customer buy from you?  Do you have the vehicle they like to use?  If not, be ready to team if they procure via a different contract vehicle than the one you have.

 

  1. Sales teams generally rule the roost in most VARs. The company can live or die by them. BUT…they are quick to put the company at risk with quick acceptance of terms that may inflict more harm than good (especially at the end of a quarter!). Contracts folks identify and mitigate risk for a living. They should always act in the best interests of the company. But they should understand shades of risk, when they need to accept it and the speed in which business needs to move. Creating a culture where both the sales team and the contracts department value the other’s strengths and respect their differences and points of view is critical.

 

  1. Know your financing options. Be current with all your distributor partners and have a firm grasp on credit limits they have extended to your firm.  Will your distributor accommodate that one-off $3,000,000 order?  Should your flooring lines and vendor financing not be enough to cover surge season, be sure to have a plan B in place.  Preferably some sort of supplemental non-recourse receivables financing facility.

 

There are a lot of moving parts associated with resellers/VARs, but there is a great business model if you can get the battle rhythm. Take care of the back end now, before the fiscal year-end sprint begins.

BOOST has helped resellers/VARs with streamlining their contracts department, organizing their data and serving as an outsourced contracts administration house with contract authority of $10M+. If you need help, please email us at [email protected].  If you need reseller financing, we’re happy to introduce you to a trusted partner.

How to Manage a Pricing Schedule

Why a proper pricing proposal schedule matters.

You’ve been preparing and actively developing capture strategies for an upcoming bid and eagerly awaiting the draft or final RFP to drop. Finally, it drops! All proposal functions swing into action. The proposal manager’s first job is to develop a schedule and hold everyone accountable to it. Very seldom do we get a proposal manager to ask us for a “Pricing Schedule”. However, we always insist.  Here’s why:

Price/Cost volumes these days require a lot more facilitation and coordination with other volume leads than most people realize. 

  1. Basis of Estimates. Many cost volumes require a complete basis of estimates to be written and tied to the price tables. The question is “How is the pricing manager going to be able to do this without coordinating with the technical/management volume leads?” The Basis of Estimates (BOE) and technical schedules MUST be in sync with the cost volume timelines. We recommend that the pricing manager set this schedule. This includes giving out deadlines to the BOE writers and standardizing the BOE data calls.  This is usually a standard template organized to capture the various work breakdown structure (WBS) elements that feed the various Contract Line items (CLINS).  It is critical to understand that unless these estimates can be produced and relayed into the pricing tables in due time, the whole proposal WILL be at risk. It is never an easy task to take in estimates at the last minute and develop pricing tables and submit the proposal within a day. We recommend that the first cut of these estimates be provided to the pricing team right after red team is done on the technical volumes. Then a review and updates are to be provided after the final review of the technical volume.
  2. Subcontractors. If the RFP requires subcontractor rates and sealed bids, this must be coordinated in advance. This timeline must be set and adhered to early on. Not only for compliance, but also for finalizing rate strategies. Sealed bids also require a few extra days of preparation by your subcontractors. They need instructions and active management of this timeline. Often these rates also impact your small business plan numbers that must be submitted. All these pieces must be accurate and in sync by the time the cost volume is finalized. Pick up the phone and get everyone aligned, early.
  3. Management Review. Management reviews are a soap box item for many pricing managers. If you don’t give your pricing team enough time to cycle through the technical and rate updates, how do you expect them to be ready for a proper management review? If management has to make the final decisions on fee/profit, workshare, key personnel, and any other ways to finalize the price, they need the best models with the most accurate information in order to do so. Bad or incomplete technical estimates make for bad pricing models. Plain and simple. So, get them done in time! Organize and coordinate with the BOE writers, hold them accountable for the pricing timelines. You may also need to hold the management team accountable, so that they realize that any changes made at the last minute (yes Gold Team reviewers we’re looking at you), have cascading effects on the pricing volume.  All final decisions should be made during Green Team (which should happen a few days before Gold team, if possible).

We have seen many cost volumes developed in a rush in the final days of the proposal stage, and this puts the entire proposal at risk. Mitigate this by being aware of missed opportunities to refine/review a smartly developed and compliant proposal.  With good schedule management, the pricing volume can be a proper, accurate and complete document that will be a part of the winning proposal. Don’t make your pricing volume the reason for your proposal loss.

BOOST has pricing experts at the ready, but don’t wait until it’s too late. (See point b, above.) Get connected with us now so that when you need us you already have our number on speed dial. [email protected]

How to Survive a DOL SCA Wage and Hour Audit

On a late Friday afternoon in May, just before I am about to leave for a three-day holiday weekend, my phone rings at the corporate office in Maryland and it is the voice of a woman who is the last person I wanted to speak to at the end of a long week – a Department of Labor auditor.  The woman seemed nice enough until she says, “a report has been made against your organization in North Carolina and I have been assigned to oversee the audit.  I will be emailing you momentarily all of the documents I will need.”  I receive the email and immediately called her back to ask, “Three days? I have three days to bring you payroll reports, rosters, and time cards for a workforce of 200 employees?” That is when she informs me if I do not comply the company will be in violation of her records request which could cause the organization to be assessed fines.  So, my team and I pulled together all SCA policies and procedures, 2 years of employee records, a month’s worth of payroll records, and time cards for 6 months for 200 employees. All over a holiday weekend.  It was a feat to be had, but the team pulled together and by Tuesday I was driving to North Carolina with 5 large bankers boxes to meet with the auditor on Wednesday morning.

Wednesday comes and the audit begins.  Two weeks later the audit is over, and I receive my findings. They were good, but not great.  The company was assessed almost $200,000 in back wages, but we were found to not be negligent in our practices, policies and procedures.  And from this experience, here is what I learned on how to survive (as best as you can):

  • Be nice and play nice with the auditor. She can make or break the findings.  By playing nice with the auditor and offering assistance, she shared the reason for the audit – someone was not happy about not receiving their vacation benefit after being away from the contract for more than six months.  I explained that the FAR clause pertaining to vacation benefits does not dictate length of separation when determining an anniversary date and vacation payout.  The company set a generous policy that was in writing as to what would constitute a separation from the contract.
  • Make sure you understand the FAR clauses. Especially those associated with SCA and wage & hour as it pertains to an SCA contract to include health & welfare benefits. By demonstrating knowledge of the FAR, we were able to justify the policies and procedures put into place and that the company put a considerable amount of thought in how to implement the corporate policies.
  • Be prepared for employees to talk to the auditor. The auditor will request that you provide a number of employees to speak with her.  Our auditor spoke with approximately 25 employees.  We were able to identify 10 employees with the remainder identified by the auditor.  The company was not aware that the auditor would speak to employees as we were told originally it was just a document request and management interview.
  • The auditor is not limited in scope. The auditor will ask questions that are within the scope of DOL wage and hour and SCA.  They are not limited to the complaint that was filed.  We found out from employees who came to us asking why the auditor asked specific questions about pay practices, how we handled policy infractions, and more.
  • The auditor will be reviewing ALL aspects of wage & hour and SCA compliance. The auditor asked questions of corporate, program management, and employees on topics such as how employees are paid, how they are compensated, are they compensated fairly under the wage determination based upon their labor category, do they work overtime, and do they receive all benefits in accordance with the SCA.  Our auditor found that even though there was no overtime required on the contract and that we had a strict no overtime policy, employees were still using their own time to do tasks such as making copies at home or buying supplies for their workspace.  It was deemed that this was in direct violation of overtime laws.
  • The auditor will assess fines, penalties, damages, and lost wages. The fines, penalties, and damages are at the discretion of the auditor (this is where the “be nice and play nice” rule applies).  Our auditor felt that since we were forthcoming with information, knew our FAR clauses and how to apply them, and there was no willful misconduct by the organization that she would not assess fines or penalties under wage and hour or SCA.  Yes, there could have been fines and penalties under both labor laws! However, the company was required to pay back wages of uncompensated overtime to 200 employees.
  • The auditor will determine the amount of lost wages and when those wages must be paid. Our auditor made a determination and created a calculation of how much potential overtime was reasonable to be paid to the employees (both current and past employees) who had worked in the prior 22 weeks. For most employees who were employed for that entire look-back period, they received just over $1,000 in back overtime wages which had to be paid out within two weeks of DOL’s notice.  If the company had been found to be negligent in violating SCA and/or wage and hour laws, punitive damages would have been assessed and paid to the employee.  To put this in perspective, punitive damages are two times the amount of lost wages.

 

This is how I survived and what I learned during a Department of Labor SCA Wage & Hour SCA audit.  If I or my team had taken the stance that DOL was the enemy, if the company was not clear or consistent in SCA policies and practices or was found negligent in our understanding and application of SCA wage and hour laws, the outcome would have been catastrophic.  The company did a review of a worst-case scenario and found that the end result would have been over $1,000,000.00 in punitive fines, damages, and back wages that would have been owed to either the DOL or to the employees.  That’s a huge chunk of change for an up and coming 8(a) business.  The company would have had to shutter their doors and more than 200 people would have lost their jobs.

 

Avoid being a “worst-case scenario” story by making yourself aware of the SCA Wage & Hour requirements on every contract. If you would like guidance on where to start and how to focus, email BOOST LLC. [email protected]