Compensation Cap on Federal Contractors, Latest FAR Requirement

ed murphy

Article Ed Murphy – CEO at Financial Management Institute


For an explanation of the recent FAR change imposing a new employee compensation cap on federal contractors, go visit:

https://www.federalregister.gov/articles/2014/06/24/2014-14379/federal-acquisition-regulation-limitation-on-allowable-government-contractor-compensation-costs

and

http://federalsoup.com/articles/2014/06/25/rule-will-implement-contractor-pay-cap.aspx?s=FD_260614

The recently revised FAR Part 31 cost principles neither preclude nor forbid contractors from incurring employee compensation in excess of the cap. Instead they make employee compensation in excess of the cap unallowable in determining or negotiating the contract price. But only when the FAR Part 31 cost principles apply. And they don’t always apply! For example, any fixed-price type contract where the price is market-based.

But cost reimbursement and other flexibly priced contracts will be affected by this change. As will those fixed price contracts where cost analysis and related FAR 31 cost principles are used to negotiate the contract price.

So how will the change impact you or your government contractor clients? You decide.

The impact will be zero, if…

No employee earns compensation in excess of the cap, or
All business with Uncle Sam or prime contractors is based on “bottom-line” market based selling prices.

The impact may be minimum or insignificant depending on —

The dollar value of aggregate compensation in excess of the cap;
How and where the excess is recorded (direct or indirect costs); and
The mix of contracts based on market-based vs, cost-based pricing.

My opinion, for what it’s worth.

Take good care of yourselves. Or as Garrison Keillor would say “Be well, do good work, and keep in touch.”
federalregister.gov federalregister.gov

Sharpen Your Pencils – Q4 Proposal Prep is Here!

As Q4 approaches, government contractors should be readying themselves for the mad dash.

Over a third of government contracts are awarded during the fourth quarter of the fiscal year. Government agencies are emptying their budgets and providing contractors a window of opportunity to seriously expand their client base.

Where do I start? Let the courtship begin!

Winning a government contract is very much a courtship. Government customers must know you, like you and have confidence in you. The courtship will take time and energy. Marketing and networking over the next few months are going to be crucial factors in the amount of new business you bring on board. Remember, these government customers are being wooed by every prince and every pauper. You must stand out in all the right ways. Be ready to discuss “what you are going to do for them”, not “what you have done in the past”. Your past merits will certainly come into play, but focus on your future together, as government contractor and government contractee.

In sickness and health, till contract expiration do us part.

With the threat of government shut downs no longer looming and a more stable government budget in place, spending should be ramped up in this fourth quarter.

Make sure your business get a filling piece of the pie!

Not sure where to start? Need help responding to proposals about to hit the market?

…let Arrowhead Solutions, LLC guide and assist.

Are you up-to-date on recent GSA Schedule changes?

A recent interview with Tom Sharpe, Commissioner of the Federal Acquisition Service with GSA, details the changes that will help modernize the program and allow for greater buying power.

Link to article: FederalTimes.com

http://www.federaltimes.com/article/20140613/ACQ01/306130013/GSA-pushes-overhaul-its-Multiple-Award-Schedules-contracting-processes?odyssey=nav|head

ArrowHeadSolutionsLLC.com

Meet the Team: Steve Griffin, Contracts Specialist

StephenGriffin200Arrowhead Solutions would like to introduce and welcome  a new team member, Steve Griffin. Steve, PhD, joined Arrowhead Solutions in February 2014 and brings with him over 32 years of experience in Federal Government contracting.

Mr. Griffin has worked a wide variety of contracts types involving acquisition of supplies, services, research, weapons development and testing, and managed healthcare.  In his career, Steve has worked for, worked as a contractor employee providing support to, or worked for firms contracting with the Federal Government.

Steve started his career in contracting in 1981 as a contracts intern with the U. S. Air Force at Luke Air Force.  In 1983 the Air Force moved him to Nellis AFB, and from there he moved to the China Lake facility of the Naval Air Warfare Center in 1985, where he worked until 1992.  In 1992, Steve moved to the National Renewable Energy Laboratory in Golden, Colorado, as a subcontract administrator.  From 1994 until 1996 he worked for a small disadvantaged business which held a number of contracts with the FAA for asbestos inspection and monitoring as the manager of contracts at its Denver area office.  From 1996 until 1998 Steve worked for an environmental engineering firm that held contracts with the EPA, Corps of Engineers, the U. S. Forest Service, and other Federal agencies.  In 1998 Steve moved on to a contract administrator position with a firm supporting the contracting operations of the DoD TRICARE program, and in 1999 he returned to the Government with TRICARE as a contract administrator working a number of contracts to acquire healthcare services for active duty military, their family members, and military retirees.  In 2000 Steve was appointed a contracting officer at TRICARE, and was responsible for the administration of five different regional healthcare services contracts over his time as a contracting officer at TRICARE.  In 2006 Steve left TRICARE and contracting to pursue a PhD.  During his time completing his degree program, Steve provided contracting advice and assistance to a firm that held healthcare administration contract with the DoD and the VA.  From February 2013 through January 2014 Steve worked as a contract specialist as an employee of the firm providing support to the GSA, Region 8 FAS office in Lakewood, Colorado working a number of service contracts and task orders.  With the end of his work at GSA, Steve joined Arrowhead Solutions.

Steve holds a BS in Natural Resource Management degree, a Master of Applied Communication degree, and a PhD in Communication Studies degree.   He received a DAWIA Level III certification while with TRICARE, and earned a graduate certificate in ADR from the University of Denver while completing his master’s degree.

How can Stephen and Arrowhead assist your business?

STOP – Don’t pay for SAM Assistance or Registration. Why? It’s FREE and EASY!

Let’s debug this common urban legend of government contracting: Someone tells you have to pay for a “service” in order to register your company with SAM.gov OR you have tocon-artist-alert pay for someone to update your entity’s registration.

So, you’re a government contractor, or you’re wanting to become one. You ask around, “What do I do first?” The responses are muddled, you do some Googling, then you start to really notice the emails offering services to set up or update your registration. WAIT – WHAT?! Services?? I have to pay for this?? The long and short answer: NO

You should never, ever in a million years have to pay for these “services” the emails claim to offer – EVER! The SAM registration takes about 15 minutes to complete, and any updates to it take less than 5 (honestly – it’s that easy)

Be aware of these other “offers” and how the issues can be addressed for free:

1) Year Long Technical “Support”
  • Updates are only as necessary, and often times SAM.gov only needs to be reviewed once a year
  • There is no “support” required
2) SAM.gov Migration Annual Updates
  • Migration happens once; Most likely all government contractors who have registered in the old CCR have already been migrated
3) FAR Updates (if necessary)
  • SAM.gov DOES NOT provide FAR updates!
  • During the annual update of the entity registration, these are already incorporated
4) Basic Changes to Registration (NAICS codes, contact info., contracts awarded, etc.)
  • This is a part of the basic updating
  • Takes 5 minutes!
5) Government Buyer Submission
  • Only if offering disaster response
  • One page within SAM.gov
  • Takes 30 seconds to complete!
6) Verification of Dun & Bradstreet Number (required)
  • Can be done by logging into iUpdate
  • If it is needed, you will be directed after SAM.gov login
7) SAM Registration Completion
  • This is a 15 minute process
  • Can be done for free! (or divide the completing person’s rate by the time it takes – that’s really the cost; just a few dollars of opportunity cost)
8) Verified Vendor Seal of Approval
  • BEWARE – THE GOVERNMENT WILL NOT RECOGNIZE THIS “SEAL”!
So, all in all it may take one person a total of maybe, maybe 25 minutes PER YEAR to either register or update SAM.gov. Now, unless you are paying your employees an exorbitant salary, isn’t 25 minutes much more affordable than the approximately $600 price tag companies out there are charging? I’m not an economics specialist by any means, but I think I’ll go with the 25 minutes, and I hope you do the same.

Still need help? Check out Arrowhead Solutions – we’ll lead you in the right direction with a FREE 30-minute consultation. We don’t like to be scammed, and we definitely don’t want our clients to deal with these “support” claims either.

 

Meet the team! Carrie Grigg – Contracts Specialist

New Team Member Spotlight: Carrie Grigg

ProfilePicGrigg

Carrie joins Arrowhead Solutions,LLC as a Government Contracts Specialist.  She brings ten years of experience in contract management and business development in diverse fields including IT, A/E/C, bioscience and energy.  While specializing in federal and state government contracts, Carrie collaborates with partners and clients to identify strategic contract opportunities, write proposals, improve business processes, and is passionate about creating a positive customer interaction.  In addition to assisting companies win government contracts, Carrie’s interests include writing, painting and exploring the use of social media to obtain customer feedback and build relationships.  Carrie holds a BA in English Literature from the University of Virginia.

Visit Arrowhead on the web to see what our government contract specialists can do for your small business.

Meet the team! Douglas Wells – Contracts Specialist

Arrowhead Solutions is growing!

Each week, Arrowhead will be highlighting a new team member’s skills and expertise.  We’re thrilled to add their expertise to the Arrowhead portfolio and join in assisting current and prospective small business clients.

New Team Member Spotlight: Douglas WellsDouglas Wells

Doug Wells brings to Arrowhead almost 25 years of hands-on experience in Government contracting.  As an Air Force officer, he was a Contracting Officer with authority to award contracts up to an unlimited dollar amount.  His Air Force contracting experience ranges from nuts and bolts, spares and repairs, and logistics, all the way to multi-billion dollar weapon systems and IT support.  Since active duty retirement, Doug has used his expertise to assist the USDA and US Department of Education, as well as an Air Force operational contracting office.  A short list of Doug’s specialties include:

-        Contract management, related documents review and approval
-        Thorough understanding and use of FAR, DFARS, and other supplements, including DLA and civilian agencies
-        RFP analysis
-        RFP shredding and requirements matrix development
-        Proposal preparation
-        Source Selection process
-        Contract clause compliance and flow down
-        Subcontractor management
-        In-house process documentation and government compliance review
-        Contract closeout/records disposition

Welcome aboard, Doug!

 

Look – We’re Growing!

Arrowhead Solutions Announces the Addition of Four New Team Members

Boulder, CO (April 21, 2014) – Stephanie Amend, Founder / Executive Consultant of Arrowhead Solutions, LLC announces the addition of four new team members. Specializing in aiding small businesses in the processes relating to government contracting, Arrowhead has continued to grow in both the number of clients they assist, as well as the number of consultants on staff. Caroline (Carrie) Grigg, Douglas Wells, and Steve Griffin have joined the team as Contracts Specialists. Carrie brings ten years of experience in contract management and business development in diverse fields including IT, A/E/C, bioscience and energy. Doug brings to Arrowhead almost 25 years of hands-on experience in Government contracting. Since active duty retirement, Doug has used his expertise to assist the USDA and US Department of Education, as well as an Air Force operational contracting office.  Stephen’s expertise in government contracting brings into the mix experience in the dynamics present in government, how to read and interpret laws, regulations and policies, and how government agencies are structured, operate and think. Stephen holds both a PhD in Communication Studies and Master of Applied Communication degrees. Another new addition to Arrowhead, Lindsy Bentz, has joined as the Director of Marketing and Operations. Lindsy will assist clients with marketing their services to the Government as well as overseeing the internal marketing and operations efforts of Arrowhead.

About Arrowhead Solutions:

Arrowhead Solutions, LLC has been serving Boulder and Denver, Colorado metro areas and clients across the nation for five years. Stephanie Amend, Founder / Executive Consultant formed Arrowhead after seeing a need for assistance in the small-business government contracting arena. As both a civilian working for the Air Force as a Contracts Specialist at Hill Air Force Base, and as a Contracts Negotiator in the private sector, Stephanie teamed up with Janet Shea, CPA after getting Arrowhead off the ground to provide the small businesses services much needed in the Boulder/Denver area.  Five years later, Arrowhead has grown to carry a roster of clients from coast to coast with the ability to assist in every area of government contracting.

GSA Schedules – Opinions Change

Originally posted on Creative Contracting:

For so long, the common belief among my government colleagues was that GSA is inappropriate and took “work” away  from contracting offices for the procurement of services.  Primarily, those services offered on Schedules like LOGWORLD, MOBIS, PES, and IT 70 were routinely purchased outside of GSA.  I remember when I worked for the Air Force that even the mention of using a GSA Schedule to procure engineering services was met with scorn and dirty looks.  The Industrial Funding Fee and the fact that GSA wasn’t in line with Air Force contracting principles were the two arguments most commonly heard.

Over time, some agencies have been more open to using GSA Schedules than others. These same agencies have also procured certain products and services using Schedules, more than other products and services.  As time moved on, companies arose (and we have blogged on this topic before) convincing every small business in site that they NEED a GSA…

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