Posts

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].

 

5 Pricing Tips for the New Year

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As we enter a new calendar year, we begin the madness of sharpening our budgets and pipelines.  Some of the focus ends up being on managing expenses and headcount, as it should, but often some quick and easy planning can help you to optimize your pricing strategy for the next year.

To get you started, here are five pricing tips for the new year:

  1. Contract Labor Bill Rate Review
    Have you had any staff turnover on your firm fixed price or time and materials contracts? If so, you may be able to capture some labor efficiencies by “greening” those positions and/or consolidating functions under higher bill rate positions. BONUS TIP: This is especially helpful if the contract is up for a re-competition and you’re the incumbent.
  2. Cost-Plus Contracts
    If your Cost-Plus contract is coming up for a re-compete, review all of the direct labor rates, and examine them against market rates (such as a survey or government rate data such as Bureau of Labor Statistics).  Bid market rates, NOT current employee rates.
  3. Subcontract Review
    Are there opportunities to bring in new subcontractors of the same quality/scope, but with better rates? This might be dependent on teaming agreements and workshare commitments. If the contract allows it, develop an active strategy around subcontractor selection and rates every year.
  4. Overhead & Infrastructure Review
    Facilities – this is a big one. Are there opportunities to renew different types of leases/facilities?  You may want to explore the trend of shared/co-working spaces. This solution can provide a lot of cost efficiencies if your contract/company policy allows it. Telecom expenses are also a major player. There are a multitude of new options that minimize the telecom costs for entire companies through third-party vendors and resellers, or cost sharing with other companies. Do your homework and save your company money in the long run.
  5. Beef Up Your Back Office Support
    Can you outsource major functions such as accounting, HR, recruiting, contracts? Believe it or not, this is becoming a good option for many mid-tier contractors. Use this opportunity to get lean without sacrificing quality and compliance standards.

The tips above are not a one-and-done type of deal. You should be reviewing internally each year as you plan operations and execution of contracts for the new year.  While much of this is common sense, seldom is it applied to affect pricing strategy/updates.  Use this information to bid sharper and smarter than your competitors and get the edge in pricing!

The Gift of Expertise

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Note: This post was updated 12/13/2022

Ever feel like you have no clue how to solve a problem in your GovConor that there has to be an answer out there, you just don’t know how to find it?  Do you google randomly trying to figure it out, only to not be satisfied with the results?  Or (if you are like me), do you just want someone to freaking deal with it and tell you what to do in this circumstance?  Do you feel like you know it’s important, but there are a ton of things that you’d rather be doing or should focus on when it comes to your GovCon? Our GovCon experts at BOOST LLC can help you strategize a plan, figuring out exactly what should be an outsourced GovCon service and what should remain in-house. Your GovCon isn’t the same as a regular business, why use regular outsourcing services when we have experts in outsourcing GovCon services to ensure your GovCon gets the exact help it needs, at a price that works for your budget.

As you plan for 2022, be thinking about what expertise you need in the new year.  What will help move your GovCon forward and, more importantly, grow your profit?  What is worthy of your time and what isn’t?  When do you play it safe with an outside opinion?  (answer:  Anything with a ton of money on the line or employee issues – call the expert!).

Here’s a short list of items that folks waste time on by doing themselves for their GovCon instead of calling an expert to save a ton of time and in the right circumstances, a ton of money:

  • Affirmative Action Plans
  • Taxes
  • GSA Schedules
  • Employee handbooks
  • Policies and Procedures (to start)
  • CMMI/ISO certification
  • Office Space/Office Moves
  • FAR Compliance
  • Proposal Price/Cost Volume development and Analysis
  • Indirect Rates development and Analysis
  • Strategic Pricing/Price to Win Analysis
  • M&A (when you don’t have a shop of your own)
  • Website development
  • Complex IT Challenges
  • Bookkeeping
  • Graphic Design
  • Payroll

This holiday season, give yourself the gift of getting crap off your plate.  Budget for using an expert in one or more of these areas next year.  Reclaim your time and rest easy knowing that outsourcing GovCon services will provide a net positive!

If you need a referral or recommendation to anyone providing these services, just give us a shout.

CMS-PEO Pricing Synopsis

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Pricing Alert – The massive HHS/CMS PEO RFP is out!
Are you prepared to tackle the complex pricing requirements?  It might seem straight forward at first glance, but read our detailed Pricing Synopsis to look out for some challenges and pitfalls to avoid.

Abstract:  This 10 year $2B IDIQ contract has two task orders along with the IDIQ awards. However, bidders beware. Despite the use of fixed price task orders, there’s still a large amount of pricing detail and documentation required. Teams with large number of subcontractors will need dedicated management and support to ensure submission of accurate proposals.

Contract Overview

The Provider Enrollment and Oversight (PEO) Indefinite Delivery Indefinite Quantity (IDIQ) contract will provide contractor support to Centers for Medicare and Medicaid Services (CMS) to detect, prevent, and proactively deter fraud, waste and abuse in the Medicare and Medicaid programs.

CMS anticipates multiple awards with a combined ceiling of $2B over the life of the contract. The ceiling may be increased at the CMS’s discretion. A minimum of 4 awards will be reserved for small businesses (under NAICS code 541990 and a size standard of $15M). The RFP (75FCMC18R0014) is silent on the number of potential awards to other than small businesses. The maximum ordering period is five years plus (1) additional five-year option period for a total ordering period of ten years. Neither the RFP or the IDIQ Ordering Guide clarify whether the task order period of performance can extend beyond the IDIQ ordering periods.

In addition to the IDIQ contract awards, CMS will also award two Firm Fixed-Price Task Orders on an unrestricted (full and open) basis for Site Verification Services – Eastern Region and Western Region. The RFP notes that one Offeror cannot be awarded both Site Verification Services’ task orders.

IDIQ Pricing Requirements

The proposal is organized into six volumes. Volumes I through IV pertain to the IDIQ proposal. Volumes V and VI are reserved for offerors bidding on the two awardable task orders which we discuss separately. The IDIQ pricing information content is divided between Volume I – Contract Documentation and Volume III Business Proposal.

All offerors must submit basic pricing information which includes typical IDIQ level pricing requirements including accounting systems information, indirect rate information, and the submission of a sample task order pricing. The IDIQ award will be based on this information.

Adequate Accounting System

The RFP contemplates a predominant mixture of Cost Reimbursement (CR) and Firm-Fixed Price (FFP) form of task orders awarded. Offerors must have an accounting system that is deemed acceptable or adequate for determining costs Subcontractors who are anticipated to have CR contracting arrangements, including non-commercial Time and Materials type contracts, must also have an acceptable or adequate accounting system.

Rate Information

Offerors must submit indirect rate information in Volume I including both approved provisional indirect rates and any forward rate price agreements. Offerors that have no prior history of approved indirect rates must submit support documentation for the prior 3 years consisting of their current year operating budget and a forecast covering the anticipated period of performance and associated documentation on that supports the proposed rates. The RFP does not request offerors to propose any IDIQ ceiling rates for either direct labor, indirect or fixed fee rate. However, the RFP contains a clause which gives CMS the option to establish ceiling indirect rates. We think clause this has implications for pricing the sample task order discussed below.

Sample Task Order Pricing Requirements

The sample task order pricing is straightforward. Exhibit E.8 “QASP Sample Task Order Business Proposal Template” is to be priced for base and one option period. Labor is priced as fully burdened (inclusive of fee). The labor rates are then linked to a labor rate buildup backup detail for each task order period. Offerors must show the full detail of their proposed labor rate (including the erroneously termed ‘Fixed Fee’).

Curiously, the pricing template requests offerors to map proposed travel and ODCs by SOW section. However, similar mapping information for labor costs is not required. Travel cost detail must be provided for the Kick-off meeting. However, for remaining travel, CMS requests offerors to use a plug unit cost of $2,000 per trip per person. For indirect rates, the instructions specifically state to cross-reference Volume I for indirect rate basis information. Finally, a compensation plan must accompany the sample task order pricing. CMS provided a streamlined template in Exhibit E.8 reflecting the minimum information necessary to comply with FAR 52.222-46. We recommend offerors take the hint and provide just the bare minimums necessary for compliance and nothing more.

While the Exhibit E.8 is in itself not very complex, importantly, Offerors are required to provide additional, lower level, labor-hour detail under Technical Factor 3 – Key Personnel and Staffing Plan within the Technical Volume. The task order RFP requests full-time equivalent (FTE) and labor detail by CLIN, labor category, prime/subcontractor. The staffing summary must provide both full-time equivalents and labor hours. While the instructions do not request a lower level labor breakdown by individual subcontractor, subcontractors are required to provide this FTE and labor hour detail by CLIN (and 2nd tier subcontracts) in their Exhibit E.3 Subcontractor Proposal Information Checklist. Therefore, it will be important for primes to ensure their subcontractor labor data ties in three different proposal documents, Volume III Exhibit E.8 QASP Sample Task Order Business Proposal Template, Volume II – Technical Volume staffing summary, and Volume I – Exhibit E.3 Subcontractor Proposal Information Checklist. (Unfortunately, we revisit this theme of cross-volume data checking under the two larger (and real) task orders below.)

We’re not fans of RFPs that require pricing sample task orders that are not awarded. We believe they invite aggressive and potential unrealistic and irrational pricing. However, as mentioned above, there’s one RFP clause that could give bidders some pause from overly aggressive pricing of the sample task order, at least for indirect rates. Section E of Volume I instructions state, “In accordance with FAR 42.707, entitled ‘Cost Sharing Rates and Limitations on Indirect Cost Rates,’ CMS may establish indirect cost ceilings in the contract. If established, reimbursement will be limited to the negotiated indirect cost ceilings established in the contract…” We wonder what would happen if a bidder proposed aggressively low indirect rates for the sample task order (below their current approved provisional rates) and were awarded an IDIQ contract. Could CMS accept these low sample task order indirect rates and subsequently cap those rates for the life of the IDIQ? (Don’t say it can’t happen just because CMS did not make good on the threat on other contracts. I recall an Army recompete where, based on the prior contract, bidders priced the IDIQ using T&M rates with the understanding the Army would ultimately request task order pricing using those T&M rates, but issue task orders on a fixed price basis. Many bidders proposed low labor rates, assuming they could subsequently manage the labor hours on a fixed price task order to ensure adequate profit. The Army subsequently issued T&M type task orders, not fixed price, and the contract holders were stuck pricing and executing their task orders using the artificially low IDIQ T&M rates. The moral of the story: Anything is possible. Don’t assume past agency behavior is an assured prediction of future behavior).

Task Orders 1 and 2 Pricing Requirements

The IDIQ award will be based on the sample task order. CMS included two additional Firm Fixed Price (FFP) Task Order RFPs that will be awarded:  Eastern Region Site Verification Services and Western Region Site Verification services. Both are full and open competitions. Offerors are permitted to bid on either one or both. However, CMS will not award both task orders to the same offeror. The cost proposals are contained within Volume VI (VI-A Eastern region, VI-B Western Region).

Pricing for both task orders are organized similarly in Attachment J.5.C (Eastern Region) and Attachment J.6.C (Western Region). Each pricing template contains five CLINs representing separate 12-month periods of performance. Each CLIN contains an “AA” sub-CLIN for ‘Site Visits’ (sites not associated with an Independent Diagnostic Test Facility (IDTF)) and sub-CLIN“AB” for IDTF Site Visits. Each subCLIN is further divided into 4 visit types (48 hrs., 7 days, 15 days, or 30 days). While the pricing attachments appear to denote these site visits in terms of visit length, we note that each SOW denotes the 4 visit types in terms of response time. So, a “30-day site visit” as labeled in the pricing attachment appears to really mean perform the site visit within 30 days’ notice according the SOW. A 48-hour site visit would mean perform the visit within 48-hour notice. This is an important distinction and we recommend offerors confirm that the SOW’s definition of site visits types is the correct definition.

Unit Pricing Requirements

Offerors must propose unit prices per visit type with associated breakdowns of fully burdened labor, travel. ODCs, and subcontract costs. The pricing templates are designed to apply the same proposed CLIN/Site-visit type unit price to both the minimum order guarantee quantities and to the (larger) estimated quantities. Therefore, the template produces two total prices:  A ‘minimum quantity’ price and a total price based on ‘Estimated Quantity’.

Detailed Labor Tracking

As discussed under the sample task order, similar cross-volume labor detail is required for each of the awardable task orders. Similarly, it will be important for primes to ensure their subcontractor labor data ties in three different task order proposal documents, Attachment 5 (or 6) pricing template, Volume V – Technical Volume staffing summary, and Volume VI – Exhibit E.3 Subcontractor Proposal Information Checklist. Finally, we also note, the task order instructions are silent on whether the staffing summary must be built to the minimum order quantities, estimated quantities or both. CMS should clarify

Burdensome Basis of Estimates

In addition to providing the Excel pricing attachments, offerors must provide a Business Proposal Narrative. The narrative must include among other things, a Basis of Estimate. The BOEs must, “describe the BOE used to establish those estimates as fair and reasonable. This includes providing all assumptions used to establish proposed prices and any and all empirical data which can provide further support to the proposed prices as fair and reasonable. The Government needs to understand how you determined the prices per element and how that correlates with the technical approach”. We’re surprised this level of detailed documentation is needed given the work scope is somewhat standardized and offerors are proposing fixed prices. We wonder why CMS wouldn’t rely on direct comparison of offeror prices to establish price reasonableness. Regrettably, this represents a lost opportunity to streamline the time and effort required for both the bidders and for CMS.

The BOE instructions request further details for each cost element. Offerors must provide the labor category(s) that make up the “Labor” price per site visit and include information on proposed escalation of each price element as well as the level of ‘productive labor’ in 1 full time equivalent (FTE).

Similar types of information are requested to explain travel and ODC costs. For subcontractor costs, the RFP does not explicitly request similar pricing details as the prime, except it specifically states primes must include a subcontract “Certificate of Current Cost or Pricing Data; as appropriate”. Until the Contracting Officer determines adequate competition does not exist, we do not believe there’s any reason for subcontractors to submit certified cost and pricing data.

SOW Disconnect?

While each SOW (Eastern and Western) identifies the states and territories covered, each SOW also contains an extra provision to optionally expand the geographical scope of services required. SOW 3.3, paragraph 2 states, “The Contractor shall have the ability to conduct nationwide site verification services at locations in all 50 States and 6 Territories, if required by CMS and with a minimum 30-day notification. (emphasis added). We would think the ‘East Region’ contractor might object to CMS and giving ‘East Region’ work to their counterpart ‘West Region’ contractor and vice versa.

Other Pricing Quirks

SOW 3.5, paragraph 2 states, “If there are multiple providers at the same location, the Contractor shall provide one record for each provider with the appropriate provider ID and provider name attached to each record”. However, pricing is based on ‘site visits’ and appear to be location based. In this instance, multiple providers at one location appears to represent (1) site visit. We think offerors should seek clarification.

Conclusion

We’re surprised at the level of cost and pricing data and associated documentation requested for the first two task orders, even though there’s adequate price competition and fixed pricing for presumably standardized services. Bidders with a large team of subcontractors should carefully manage the proposal to ensure the labor data correctly ties out among multiple proposal documents. We also think offerors (especially small businesses) should exercise care when pricing the sample task order to ensure they don’t unintentionally sign up for low indirect rates that they may not be able to adequately accommodate during the IDIQ contract.

If you’re looking to BOOST your proposal give us a call or send us an email, [email protected]. We’re able to provide pricing synopses on a variety of RFP opportunities to help you avoid pitfalls and tackle requirements the right way. 

Prepared by BOOST LLC/Michael Gallo

Opportunity identified by The Pulse of GovCon

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.

BOOST Featured Guest | SC&H Group

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At BOOST LLC we are lucky to rub elbows with some pretty smart people and businesses. So much so, that we’re going to share them with you! Periodically we’ll feature a govcon guest/business alongside their thoughts and hot-takes relevant to their industry.

FEATURED GUEST:  Pete Ragone, SC&H Group

What is your best advice to solve the biggest problem in your industry?

Businesses aren’t just looking for a “one trick,” partner anymore. They are looking for a firm with dynamic capabilities that can evolve and serve them as their needs change. Additionally, technology continues to break down walls within organizations therefore the scope of where our expertise is needed has changed. As a result, we continue to develop offerings that address the most pressing needs of our clients. This evolution solidifies the need to hire, train and retain employees with diverse backgrounds and expertise to be able to provide our clients with the expert advice they require to succeed.

What has been the weirdest experience you’ve had working within the government contracting community?

The weirdest experience I had relates to an M&A deal I was brought in to potentially perform due diligence on behalf of the buyer. I was contacted by the buyer that they were trying to close on the deal within five days. I let the buyer know that typical due diligence requires at least 30-60 days of lead time depending on the size and scope of the seller’s business, however, I did agree to at least look at whatever internal documents were available from the seller in the data room. After reviewing the limited number of documents provided in the data room, I recommended that the buyer delay closing on the deal at least another 30 days to allow our firm to perform adequate due diligence services as there were some very large red flags that gave me great concern. Sadly, the buyer ignored my advice and closed on the deal within the five-day period. That buyer is now in the process of determining whether to declare bankruptcy less than a year after making the acquisition. In this extremely active M&A market for the government contracting industry,  I cannot stress enough to companies that are looking to acquire or sell a business to please do adequate due diligence to mitigate risk and avoid similar outcomes.

What is your “hot take” on a current industry’s trending topic?

One current industry trending topic in the government contracting industry is the use of Other Transaction Authority (OTA’s or OT arrangements) as a mechanism for the federal government to bypass typical onerous procurement rules. OT arrangements are legally binding instruments typically used to engage companies, as well as academia, for a broad range of research, development, and prototyping activities. These OT arrangements are not bound by the normal federal laws and regulations that apply to government procurement contracts (e.g. FAR/DFARS). Recently I have attended many government contracting industry conferences and seminars espousing the benefits of OT arrangements to help government contractors grow their business. However, recently the GAO has begun to investigate the use of OT arrangements for production type contracts, which is not the original intent of the legislation. Accordingly, I recommend business owners seeking to win new business via OT arrangements ensure they seek expert advice from a government contracting attorney with experience and expertise in OTs.

Where do you see yourself/your company in 5 years?

SC&H Group will continue to evolve to meet the changing needs of businesses all the while keeping a pulse on the best strategies to deploy for our clients across industries. Our growth will run parallel to ensuring our employees continue to have educational development opportunities, including insights into how innovation will play a significant role in shaping our services and our clients’ strategic plans. Additionally we will continue to be a thought leader and valued resource to business owners and executives in the government contracting industry to help them succeed in their goals to grow a profitable business, organically and/or through acquisitions, through sound business and tax advice as well as provide expert advice to owners looking for potential exit strategies (e.g. sell to PE/strategic buyer, ESOP transaction, or management-buyout).

Lowering Your Wrap Rate

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Did you make it into your desired beach bod state this summer?  Or was time for the gym illusive?  Did you cut back on the dessert or did you enjoy a ton of gelato?

Much like dieting and maintaining good health, government contractors must maintain a “sexy” multiplier/wrap rate.  Even if you are in a less competitive field or have a unique offering for a customer with a ton of funding (if you are, good on you), you must still monitor and maintain your wrap rate.

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.  Best practice is to review your financials each month and include analysis on how you are performing on your wrap rate.  Review monthly, adjust quarterly, consider a complete overhaul semi-annually.

Most companies find that they need to tighten the belt a smidge, especially as we push into the fourth quarter.  For some, it may be too late to rein it in this year, but that doesn’t mean that you shouldn’t start pushing for the 2019 indirect diet.  For others, it may be a great time to lose a few pounds before the year-end festivities.  Here are some suggestions for both year-end and next year:

  • 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 actually use the vision policy?  What about dental?  Have you considered reducing your contribution?  Not always popular but it may lead to new work.
  • 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 is time to take stock of what’s working and what isn’t and shed a quarter’s worth of labor costs for non-performers.  Let them go now while the job market is still firing up.  Layoffs or terminations after Veterans Day essentially mean no job until after New Year’s.  Make the hard call now.

Keep working at the wrap rate and make sure it’s as lean as you can survive on.  Not bloated, but not extra thin either – you need a little wiggle room to ensure a healthy company.

Institute Recap

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GovCon Lifecycle:
Purgatory to Paradise

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! 

Continuing Education

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By now, our college days are long behind us (let’s not talk about how many years). Some folks have sought continuing education in the form of a master’s degree, PhD, certifications, and other credentials. Some of these factor into our “employability” and can help move our careers.

Assuming you’ve gotten the credentials/certifications requested and additional schooling that you are going to do – now what? Where do you go to find more information about your industry and stay on top of trends? What resources are available for continuing your education on the tips and tricks that successful people in your industry employ?

There are countless webinars/seminars/conferences that you can attend for federal contracting; many are relatively low cost. But how many times have you listened to a speaker provide the very highest level of information with generalities and no details? How often have you heard the same message over and over (“get to know the customer, or shape the opportunity” sound familiar?)? Why is there a dearth of actionable advice that resonates with you and your company?

The same usual suspects are putting on the same educational series with the same speakers. There is a lack of transparency/real life, straightforward advice in the industry.

Why?

  • Is it because the speakers don’t know (if this is the case, why are they speaking?)
  • Their information is outdated (I’ve seen the same speech out of certain folks for YEARS)
  • They are afraid that you won’t seek their services for hire or will use their advice and not need them

What this industry needs is real, direct, transparent advice from people who have seen a lot of different things in the federal space and who aren’t afraid to share the information. Professionals that will tell you what they honestly think vs keeping it politically correct for fear of saying something controversial. Real business people who actually have solid opinions but are open to new ideas and ways (not stuck in the federal marketplace of the 2000’s).

The govmates Institute was launched with this in mind. We provide the real scoop on issues that are germane to your business. No bullshit, no pie-in-the-sky convoluted discussions without actionable ideas that you can implement immediately. Demand more out of speakers – you deserve it.

Our next govmates Institute will be on September 6th – From Purgatory to Paradise. It’s a half day dedicated to:

  • Purgatory – that awful time between proposal submission and award. What’s a GovCon to do (legally)? How to address questions, requests for redlines, and BAFOs. What can your Program Manager say (or not) to someone on source selection? What can you tell your employees?
  • 30 to 60 Day Transition – We all claim we’re ready on Day One. Yeah, right. There’s a lot that happens in that first few months and as the saying goes, you only get one chance to make a first impression. How to handle the hiring/recruiting of a new team, how to negotiate with the government, issue subcontracts to subs, get your accounting house in order, and tips for keeping the client as happy as possible, given the million balls in the air.
  • Now you’ve won – How do you pay for it? We all know we can use our banks and lines of credit. But what if you’ve maxed out your line of credit capacity? What if you don’t have enough operating history for the bankers to provide the line? What if you need upfront cash for Purchase Orders or advance hiring? We bring you some non-traditional methods to fund those first few months when you are incurring costs before actually getting paid.
  • FY19 Capture and BD Opps – great, you won. Now, what’s next? ‘Tis the season for 2019 strategic planning off-sites and budget prep. What are you going after next year and what do you need to track?

Register at: https://govmates.com/institute/

Ghosting in GovCon

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Ever been ghosted? It’s not just for those navigating the dating scene. It happens in business…a lot.

Ghosting is essentially the act of having someone you are engaged with disappear on you completely. No returned phone calls, no emails, no texts. What’s worse is that the person who ghosted is still very much alive and well. Professionally, you could still see them at networking events, posting on LinkedIn, or even receive their newsletter. They just clearly don’t want to talk to you or your company, and there was no reason or rationale given.

Here are some common examples and potential reasons for why someone would ghost:

  • Active Candidate – this happens more and more these days and it drives recruiters absolutely nuts. When the market is hot, active candidates may be playing employment offers off each other and your offer wasn’t the best. You may have had a great phone screen, schedule an interview and then the candidate doesn’t show up and you never hear from them again. They may also have decided to stay with their current organization and “ghost” to pretend they never strayed. Another reason is that their spouse may have felt it wasn’t best for the family, and the candidate didn’t want to come back with “my wife/husband doesn’t think it’s a good idea”. Finally, they may just not like your company based off an interview, glass door reviews or rumors in their network and don’t want to hurt your feelings.
  • Teaming Partners – How many times has your company signed a teaming agreement and then absolutely NOTHING happened as a result? Workshare was promised, executives had visions of revenue…and then nada.

    Common reasons for ghosting here include:
    – the teaming partner deciding to no-bid (and does not want to admit they wasted everyone’s time)
    – wanting to take you off the street as a potential competitor (potentially increasing their chances of a win, but nothing for you)
    – they suffer from shiny syndrome…where every new bid seems like an amazing opportunity with the right teaming partner, only they don’t have the resources to deliver.

  • Prospects – To the ire of sales folks and BD teams everywhere, prospects will spend hours of the team’s time in meetings, phone calls, proposals, and follow up, only to completely vanish. What makes a hot lead go completely stone cold? Loss of funding, their needs changed, or they really were just shopping rates and went with a lower cost option, but don’t want to tell you in case they need you if the lower cost option doesn’t work. We’ve also seen where an eager beaver goes to the trouble of finding a proposed solution for whatever ails the company, only to not have the resources or approval to move forward.

So, what can you do to reduce ghosting? Stay on top of active candidates and make sure you respond to any inquires quickly. Treat your candidates, and your employees as valued and your reputation will be a huge asset. Not everyone cares about if you have a foosball table in the break room.

They want to know, “do you do what you say you will and are people treated with respect?” That’s what matters.

Think through teaming partnerships and don’t be too quick to sign any paperwork (other than an NDA). Look into your perspective teaming partners’ background and ask questions in the industry. Some of the large System Integrators are well known for locking people up in exclusive teaming agreements, with nothing to show for the teammate.

Look at how you are prospecting. Drill down on questions in the initial interactions that will save you from endless, useless follow up. Critical Questions – do you have the budget established and authorized and how much is it? Who is making the final decision? When is the company looking to make a decision and move forward?

Finally, know that it’s an incredibly small world, despite how large the industry is. Reputations for ghosting do come out and people DO talk. Listen to the grapevine before thinking you’ve landed an amazing candidate/teaming partner/prospect. Sometimes they disappear…like a ghost.