Is Running a VAR Keeping You Up at Night?

Updated 01/31/2023

Two parts of running a successful business in GovCon are knowledge and compliance. You need to know your requirements and how to follow those directives. Add to that the complexities of running a VAR/reseller and we’d bet that there are several things keeping you up at night – in addition to booking sales that is.

Below are some important compliance items that you should keep in mind.  Maybe they will even help you sleep better at night (probably not, but we’re trying!).

  1. Service Contract Act compliance – This is especially important for those offering ancillary services in support of the products (think maintenance, warranty or help desk). Many of the VAR/reseller-type services are potentially covered by a Wage Determination.  Most VARs do not provide the services themselves, but rather, the OEM.  Add this to the fact that most services are buried in the product line item, it can be challenging to determine whether or not the SCA even applies to your PO. As such, a certain level of “due diligence” needs to be conducted to ensure compliance. The last thing anyone wants is the DOL knocking on your door with an audit request.
  2. NMR – The infamous Non-Manufacturer Rule (NMR) is a thorn in any VAR’s side when it comes to GovCon and IT. The Non-Manufacturer Rule tends to cause headaches for small business owners, if only due to having to mitigate compliance with the rule while dealing with the circus of contracts already in progress for most small business owners. The NMR is an exception to the SBA performance requirements and limitations on subcontracting (LOS), which provide that on a supply contract, a firm must perform at least 50% of the cost of manufacturing the supplies. FAR 52.219-14  contains more information pertaining to compliance in this realm, including which businesses it pertains to, limitations of the clause, and which contracts it pertains to. We’d strongly recommend doing your research on FAR 52.219-14 to get the full depth and scope of the law, but if you’re getting lost in the jargon, we’re here to help. There are some large vehicles, such as the NASA SEWP, that contain the LOS. NASA SEWP is also notable for its size, as it provides government-wide IT products, meaning there’s a lot of room for contractors at the table. Practice tip – if you are selling big IT equipment, ask your CO to remove the clause from the solicitation.
  3. Efficient “vendor” management – Alongside the heavy traffic of deals streaming in and out of a VAR, it’s hard to imagine tracking, managing, inspecting, and reporting all of your vendors. Compliance requirements for counterfeit parts, data breach safeguarding, and flow downs seem like an impossible mountain to summit. Let us shine a light in the darkness here for you: BOOST can provide a framework and strategy to best manage these pieces while saving you sanity and time.

Even if you’re sleeping at night like a bear in winter, these can still cause quite the headache.  Our mission at BOOST is to alleviate your headaches by helping you with the stuff you don’t have the time, the interest, or the man-or-woman-power to handle.  Focusing only on GovCon, allows BOOST to make your life easier and more efficient.  Whether it’s FAR 52.219-14 compliance, vendor management, SCA compliance, accounting or any of the other administrative tasks that come with running a GovCon, let us help you cross another task off your list, email [email protected] and let’s discuss the possibilities.