Cherry Bekaert: Government Contractors Guidance

Listen to Susan Moser, Partner and Leader of Cherry Bekaert’s Government Contracting practice, and Eric Poppe, a Senior Manager in the Government Contracting practice, discuss winning an 8(a) competitive contract in episode five of our podcast series on the Small Business Administration’s (SBA) 8(a) Business Development program.

In part five, they discuss:

• An overview of what Section 8 of the Small Business Act authorizes
• Best practices for finding 8(a) competitive procurement opportunities
• Single award vs. multiple award contracts, and what to be aware of when considering teaming partners 
• Best practices and considerations when putting together a proposal, from identifying teaming partners early on, to understanding the Federal Acquisition Regulation (FAR) compliance requirements and contract types, to cost and pricing and indirect rates.
• Benefits of requesting a debrief on your proposal

If you haven’t already, catch up on other episodes in our podcast series discussing various aspects of the Small Business Administration’s (SBA) 8(a) Business Development Program:

• Part I: The SBA 8(a) Business Development Program – What Is It and What Are the Requirements?
• Part II: The SBA 8(a) Business Development Program Application Process and Requirements
• Part III: What Are the Compliance Requirements for 8(a) Certified Companies?
• Part IV: Winning an SBA 8(a) Sole Source Award Contract – What’s Involved and What to Know

Our Government Contractor Services group has an in-depth understanding of the 8(a) program and advises 8(a) government contractors through each step of the process to add value and anticipate ongoing opportunities. From the initial important decisions made in becoming an 8(a), to the first contract, to how the company is growing throughout the life of the program.

View all Government Contracting Podcasts

Listen to Susan Moser, Partner and Leader of Cherry Bekaert’s Government Contracting practice, Deb Walker, Compensation & Benefits Leader, and John Ford, Senior Consultant in the Firm’s Government Contracting practice discuss some of the unique considerations for government contractors around executive compensation, including financial reporting, tax considerations (both to company and employee) and allowability issues, as well as commonly asked questions.

Topics discussed include:

• The basics: where compensation is addressed in the Federal Acquisition Regulation (FAR) (Part 31), reasonableness and some of the current limitations regarding executive compensation.
• An explanation of the required disclosures regarding subcontractors for the five mostly highly compensated individuals.
• Common executive compensation plans implemented by government contractors: bonus plans, incentive compensation plans, stock option plans, Stock appreciation rights (SARs), phantom stock and deferred compensation plans.
• The allowability of various executive compensation plans.

View all Government Contracting Podcasts

The Small Business Administration’s (SBA) 8(a) Business Development program offers small, disadvantaged businesses tremendous opportunities for sole source and limited competition contracts. During the program, participants can be awarded sole source contracts up to $4.5 million for goods and services ($7.5 million for manufacturing). But what does the contracting process entail and what should 8(a) contractors know to avoid mistakes?

Listen to Susan Moser, Partner and Leader of Cherry Bekaert’s Government Contracting practice and Eric Poppe, a Senior Manager in the Government Contracting practice discuss the 8(a) contracting process and sole source awards, including certified cost and pricing data to determine fair market price, preaward surveys and best practices.

If you haven’t already, catch up on other episodes in our podcast series discussing various aspects of the Small Business Administration’s (SBA) 8(a) Business Development Program:

Part I: The SBA 8(a) Business Development Program – What Is It and What Are the Requirements?

Part II: The SBA 8(a) Business Development Program Application Process and Requirements

Part III: What Are the Compliance Requirements for 8(a) Certified Companies?

In future 8(a) segments, we will discuss competitive contracts and the All Small Mentor Protégé Program.

Our Government Contractor Services group has an in-depth understanding of the 8(a) program and advises 8(a) government contractors through each step of the process to add value and anticipate ongoing opportunities. From the initial important decisions made in becoming an 8(a), to the first contract, to how the company is growing throughout the life of the program.

View all Government Contracting Podcasts

It’s year end and your company has closed out its fiscal year. What should you do from an indirect rate standpoint? Listen to Eric Poppe, Senior Manager in Cherry Bekaert’s Government Contracting practice and Rich Wilkinson, Director of Product Marketing at Unanet discuss the importance of indirect rates and the close out process.

Rate variance is consequential. It has a half-life of about a year. If the government owes you $1K in rate differential at the end of the year and you bill it immediately, you can normally expect to collect it all. If you wait until next year, however, some projects may be out of funding. A project office may push back on what they now see as a “late invoice.” The Defense Contract Audit Agency will often refuse to sign-off on it saying that the rate differential invoices should wait until contract close out (which could be three or four years).

On average, at the one-year mark, that $1k in rate variance is probably worth $500 or less. After another year, the collectability falls still further. It’s now probably worth $250 or less. The $1k example is bad enough, but what if the variance is $1M – or more? 

By the way, this cycle isn’t over. There is still the dreaded Incurred Cost Submission to do to finalize the rates. But the pressure of negotiating final rates is eased a great deal if most of the variance was collected at year end. Remember, it’s a never-ending cycle. As one-year ends, another begins.

Steps for closing out the rate year:

1. Calculate the (near) final rates as soon as practical after the close of the last month.
2. Immediately submit a request for revised provisional rates equal to the actual rates for the year.
3. Immediately bill the rate differential as a separate invoice between the last (provisional) rate billing of the year and the first vouchers of the new year.

If you haven’t already, catch up on part one and two of the series where we discuss why government contracting firms need indirect rates and where and when to start, as well as monitoring and best practices in calculating your rates:

• Indirect Rates – More than Just a Math Exercise: Part One
• Indirect Rates – Monitoring and Best Practices in Calculating Your Rates: Part Two 

View all Government Contracting Podcasts

Listen to Eric Poppe, a Senior Manager in Cherry Bekaert’s Government Contracting practice, and Brendan Halloran, also a Senior Manager in the Firm’s Government Contracting practice who previously spent 10 years at the Defense Contract Management Agency (DCMA), including 7 years as a Divisional Administrative Contracting Officer (DACO), discuss proposal pricing in response to solicitations, from both a government contractor perspective and an audit and government evaluation perspective, including compliance considerations and the planning and estimating processes.

Our government contracting consulting professionals have worked extensively in the Federal contract arena and provide proposal preparation assistance, including cost and pricing proposals in response to RFPs, cost impact studies, forward pricing rate proposals, GSA Schedules, provisional rate proposals, SBIR proposals, Small Business (“SBA”) set aside programs and compliance (8a, Hubzone, SDVOB, Woman-Owned) and training to help contractors navigate the procurement process. 

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Join Cherry Bekaert’s Government Contractor Services Group for part three of our new podcast series discussing various aspects of the Small Business Administration’s (SBA) 8(a) Business Development Program. In this third episode, Brynn McNeil, an Assurance Partner in Cherry Bekaert’s Government Contracting practice and John Ure, Tax Partner and member of the Firm’s GovCon practice discuss the compliance requirements 8(a) companies must follow once they have been certified by the Small Business Administration (SBA), including:

• An Annual Update Review (Form 1450)-8(a) based on the 8(a)’s annual program year, disclosing certain company data to remain in the program, including progress on meeting goals and annual personal financial statements for the individuals upon whom the 8(a) eligibility is based showing net worth, fair market value of all assets, personal income, and excessive withdrawal limitations
• Required company financial statements:  
  • 8(a) participants with > $10 million in revenue must submit annual audited financial statements within 120 days of the company’s fiscal year.
  • 8(a) participants with revenue between $2M and $10M must submit annual reviewed financial statements within 90 days of the company’s fiscal year.
  • 8(a) participants with < $2M in revenue must provide an annual in-house or compiled financial statement within 90 days after the close of the company’s fiscal year

If you haven’t already, catch up on part one and two of the series where we discuss the overall SBA 8(a) program and eligibility, and the application process and requirements:

Part I: The SBA 8(a) Business Development Program – What Is It and What Are the Requirements?

Part II: The SBA 8(a) Business Development Program Application Process and Requirements

In future segments, we will discuss winning sole source and competitive contracts and the All Small Mentor Protégé Program.

Our Government Contractor Services group has an in-depth understanding of the 8(a) program and advises a number of 8(a) government contractors through each step of the process to add value and anticipate ongoing opportunities. From the initial important decisions made in becoming an 8(a), to the first contract, to how the company is growing throughout the life of the program.

View all Government Contracting Podcasts

Listen to Eric Poppe, Senior Manager in Cherry Bekaert’s Government Contracting practice and Rich Wilkinson, Director of Product Marketing at Unanet discuss the importance of indirect rates. In part two we talk about monitoring indirect rates, why it is important, best practices in calculating indirect rates and why it is a great tool for project management.

Monitor the rates:

1. If your accounting system can calculate your rates, do it monthly at a minimum 
2. Don’t be alarmed when they fluctuate significantly early in the fiscal year
3. Track the trends in the rates and pool costs

Make course corrections as required:

1. If the rates aren’t tracking to the budget, ask why
2. Fix the errant cost or change the estimate in the budget
3. Adjust your target rates used for project management
4. If the new target rates are materially different, submit a request for approval of revised rates
5. Bill the rate differential in the next billing cycle after approval.
6. Keep monitoring (rinse, repeat as necessary)

This part of the cycle repeats during the year to keep the billing/target/pricing rates as close to actual as feasible. Rate variance can be a killer to profitability and in the next segment, we’ll discuss how to keep it to a minimum.

If you haven’t already, catch up on part one of the series where we discuss why government contracting firms need indirect rates and where and when to start:

Indirect Rates – More than Just a Math Exercise: Part One

View all Government Contracting Podcasts

Listen to Eric Poppe, a Senior Manager in Cherry Bekaert’s Government Contracting practice, and Brendan Halloran, also a Senior Manager in the Firm’s Government Contracting practice who previously spent 10 years at the Defense Contract Management Agency (DCMA), including 7 years as a Divisional Administrative Contracting Officer (DACO), discuss contractor Business Systems requirements and trends they are currently seeing for Business Systems in large Request for Proposals and solicitations. 

The Defense Contract Audit Agency (DCAA) has a renewed focus on Accounting, MMAS and Estimating systems and is getting back into the program audit cycle with a focus on completing Business Systems audits. Contractors need to think ahead to understand what the criteria are and prioritize the Systems that apply to their business. By working towards being prepared for a potential audit or review, contractors can avoid surprises or scrambling to get a system reviewed for an RFP requirement.

Our government contracting consulting professionals have worked extensively in the Federal contract arena and are well versed in business systems requirements and complex control environments. We guide contractors in developing and maintaining compliant business systems, perform assessments against the criteria, provide audit support, and prepare contractors for audits or reviews by DCAA, DCMA or other cognizant agencies.  

View all Government Contracting Podcasts

Join Cherry Bekaert’s Government Contractor Services Group for part two of our new podcast series discussing various aspects of the Small Business Administration’s (SBA) 8(a) Business Development Program, created to help small disadvantaged businesses wanting to do business with the Federal government gain a foothold in Federal government contracting. 

In this second episode, Susan Moser, Partner and Leader of Cherry Bekaert’s Government Contracting practice and John Ure, Tax Partner and member of the Firm’s GovCon practice discuss:

• What you will need to prepare for the 8(a) application process
• The five-part application – eligibility, ownership requirements, controls, potential for success and character, an overview and guidance on each section of the application, the requirements and what information and documents will need to be provided
• SBA approval – top 10 reasons why companies do not get approved

If you haven’t already, catch up on part one of the series where we discuss the overall SBA 8(a) program, eligibility for getting into the program, what is needed and what is required:

Part I: The SBA 8(a) Business Development Program – What Is It and What Are the Requirements?

In future segments, we will discuss what happens when you get certified, winning sole source and competitive contracts and the All Small Mentor Protégé Program.

Our Government Contractor Services group has an in-depth understanding of the 8(a) program and advises a number of 8(a) government contractors through each step of the process to add value and anticipate ongoing opportunities. From the initial important decisions made in becoming an 8(a), to the first contract, to how the company is growing throughout the life of the program.

View all Government Contracting Podcasts

Join Cherry Bekaert, a Registered Practitioner Organization (“RPO”) and Candidate Certified Third-Party Assessment Organizations (C3PAO), for part five of our podcast series discussing the various elements of the Department of Defense’s (“DoD”) Cybersecurity Maturity Model Certification (“CMMC”) program.

Neal Beggan, a Principal in Cherry Bekaert’s Information Assurance & Cybersecurity Practice, selected as one of the first Provisional Assessors nationwide by the CMMC Accreditation Body, leads the series along with Eric Poppe from the Firm’s Government Contractor Services Group, to provide contractors with the latest information on CMMC and navigating its impact on the government contracting community.

In part five of the series, Neal and Eric discuss the current status of CMMC, including

• Is the rule final yet?
• How does it relate to the Executive Order?
• Recent News Articles and changes at the DoD
• Impact on small and medium businesses
• What should I be doing now?

If you haven’t already, catch up on the series:

• Part 4: How to Prepare for a CMMC C3PAO Assessment for Certification
• Part 3: What to Expect in an Upcoming CMMC C3PAO Assessment & How to Prepare
• Part 2: CMMC and the DFARS Clause
• Part 1: Current State of CMMC

View all Government Contracting Podcasts