Connect with BOOST to discuss how we can help with your accounting initiatives. [email protected]
Connect with BOOST to discuss how we can help with your accounting initiatives. [email protected]
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.
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 H&W dictates that a certain dollar amount, now $4.80 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.
• If a contract has a new option year, the new SCA H&W rate may be applicable.
• For any new work bid on, the updated SCA H&W rate must be included.
• For those contracts covered by the sick leave EO 13706, the new rate is $4.41/hour.
• Companies will want to contact their Contracting Officer for each SCA contract requesting the timing of the updated SCA H&W rates for the specific contracts
• Remember to ask whether a modification to the contract will be issued (yes!!) or if the SCA 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.
• SCA 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 H&W 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 into reading about SCA H&W compliance, 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].
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. We only sell this service if it appears to be necessary for your GovCon. CPSRs are intense and thorough, so if it seems like a reasonable concern, read on to learn about which GovCons need to prepare.
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, as you’re more likely to encounter CPSRs in the operation of your GovCon. 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 compliance plan for CPSRs 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 CPSRs, consider an organization like BOOST that will tailor a CPSR 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. To find more information on our Accounting Services for Government Contractors or our overall GovCon services, please click here.
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. Therein comes Surge Support.
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. BOOST helps provide professional and expert-level surge support requirements for GovCons.
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 that asking for help can be a challenge. Reaching out to a qualified firm that 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. Follow the link to get quality Services For GovCons or Email us for help at [email protected].
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:
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.
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.
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]
Editors Note: This was updated on 12/20/2022
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 with the SCA audit, 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 SCA audit begins. Two weeks later theSCA 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.
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, and hopefully you’ll be able to avoid an SCA audit altogether. If you would like guidance on where to start and how to focus, email BOOST LLC. [email protected]
This week govmates hosted their institute, Women in GovCon, Never Go Against the Family. Alongside expert speakers and one-of-a-kind networking, attendees had the opportunity to get real answers to the very real questions they’ve been asking about growth, teaming, exit strategy and profit maximization.
If you missed the institute, here are a few highlights.
Join govmates today and avoid the FOMO when it comes to the next govmates institute.
Panel 1: It’s Not Personal, It’s Just Business (Growth)
Kim Pack of Wolf Den Associates, Jody Franklin of Global Services and Judy Bradt of Summit Insight
Panel 2: Keep Your Friends Close, and Enemies Closer (Teaming)
Kathleen Kelley of Bean Kinney, Calvin Freeman of CACI and Amy Hernandez of BOOST LLC
Panel 3: I’m Gonna Make Him an Offer He Can’t Refuse (Exit Strategy & Profit Maximization)
Pete Ragone of SC&H, Greg Nossaman of the Mclean Group, Michael Lopes of Bernstein Wealth, Jennifer Mathis of One Degree Capital
If you haven’t already, join govmates today!
Over the past decade or so, we’ve all been whacked by this beast of a trend called “Low Price Technically Acceptable” (LPTA) evaluation criterion. It’s where the government looks at one thing and one thing only. Namely, your price. The lowest price to be clear. As long as all of your other volumes meet the basic criteria to “pass” the gates, the evaluation comes down to who has the lowest price proposal. Yes, ladies and gentlemen, we are now talking about a government that has and is acquiring national security services/items by trying to shop at “Walmart” or “Amazon” (whichever is cheaper). Let that sit for a minute.
It is unlikely that this trend is going to change quickly, in fact, it will probably be around for a few more years. It’s smart to start bidding and optimizing your pricing strategy in a holistic way. The best approach isn’t to cut rates across the board), but also to understand what happens to your business and to the market when everyone finds themselves in the same boat.
Let’s dive in to the term “strategic”. This means you need to approach each and every bid, whether it’s an LPTA or a best value or other type of evaluation, with a healthy amount of preparation. You must review all of your contracts, your pipeline, your teammate rates, your teaming commitments, your HR policies, recruiting capabilities, and your mission and strategy in whole. Is going after low price contracts going to keep you in line with your corporate strategy? Are you going after these bids to increase revenue so that you have a great top line figure, and perhaps aim for an acquisition? Are you bidding for past performance? Depending on your intent to bid, you should shape your pricing approach accordingly.
Strategic pricing should be a very integrated and well thought out function of your organization that involves smart capture practices to smart financial planning. Your pricing team should be a part of your bid/no bid decision phase, and they should also be advisors to your financial and executive teams to submit smart, effective, and winning proposals.
Various approaches to lower your rates can include:
These are some quick and dirty ways to start sharpening your pencils for the next few bids. As you build your strategic pricing capabilities for the long term, keep simple strategies in mind, but also know that it takes a while to actually become a smart bidder. It’s not just about the mechanics of preparing a cost volume, but a multitude of factors. Your pipeline strategy, new cost centers, perhaps new divisions, new targets for M&A activity, new bids that might diversify your portfolio, all of these impact the growth of your business. If you bid with the right intent, your strategy should follow as such.
If you’re questioning your current strategic pricing strategies, connect with those in the know. BOOST LLC has experts to assist you in managing this part of your proposal routine. Connect today at [email protected].