government accounting

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?

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.

Part 4 of 4 – You are now Ready for Government Contracting! Go Get ‘Em!

To give back, we’d like to share some government contracting tips and tricks so that you can be the best government contractor possible. Each week, throughout the month of March, we’re have posted 5 tips to celebrate 5 years. Time for the drumroll as we share our last set (for now)…5-years

This week’s post: Government Contracting Tips and Tricks
Part 4 – And not to forget…

#16: Analyze your approach to government marketing. Need help with strategy?

#17: Know your nicheWhy?Trust us – it’s most important in determining direction of efforts.

#18: Know your resources. Did you know you can go to your local Business Development Center and the SBA for resources?

#19: Make sure to reach out to past teammates regularly. Ask about new opportunities.

#20: Don’t get discouraged! The government contracting cycle is LONG. The effort to go after a contract can be exhausting. However, heading the previous 19 tips will really help you become a successful government contractor. As, always, feel free to contact Arrowhead Solutions. Now, go get ’em!

Don’t forget to follow Arrowhead Solutions on Twitter (@arrowheadllc) for daily tips, too!

Thanks for tuning in! All of these tips will “live” here on our blog for quite some time. We look forward to many more years to come and helping out small businesses in any way that we can.

CHEERS!

Five Years; time to give back to our wonderful readers! Part 1 of 4:

As Arrowhead celebrates our 5th anniversary, we realize that we could not have done it without all the support from you – our readers and clients!

To give back, we’d like to share some government contracting tips and tricks so that you can be the best government contractor possible. Each week, throughout the month of March, we’re going to be posting 5 tips to celebrate 5 years. Cheers!

This week’s post: Government Contracting: Tips and Tricks Part 1 – DCAA and Government Accounting

#1: Ask “How would we fair during a DCAA audit?” Not sure? Try a mock audit with Arrowhead’s experts on the other side of the table before there is DCAA in the picture.

#2: Make sure you know what wrap rate means. Need a refresher?

#3: Be familiar with indirect and direct rates. Read On…

#4: Read RFQs carefully – response instructions must be followed exactly as stated.

#5: Make sure to time your GSA proposal right  (if you have one). Not sure? Just call Arrowhead and we’ll help you sort it out. Don’t know if you really need a GSA? You could be right. Not all companies can benefit from being on a GSA Schedule. Arrowhead will also help you sort this out.

Don’t forget to follow Arrowhead Solutions on Twitter (@arrowheadllc) for daily tips, too!

See you next week!

Budgeting: Are you ready for 2013 ?

Have you updated your budget and indirect rates for 2013?
It’s that time of year if you are a calendar based fiscal year business.
You should approach your budgeting process as an opportunity to reflect on the successes of your company this year and to understand what can be done better next year.

Do not take the approach of just adding x% to this year’s financials because this may not sufficiently address the financial needs of your growing organization.

Instead take the time to review the financials and the new budget line item by line item. Use this basic outline to guide your organization through the process:

Sales pipeline:
1. What are your known contracts, what is their POP and how much is the remaining funded value for each contract?
2. What proposals do you have in process? What is their likelihood of award? What is their funded value for 2013?

Build Your Labor Budget:
3. Direct Labor: Identify by person or labor category the direct labor hours and dollars required to support / perform the contracts identified above.
4. Indirect Labor: Identify current and future indirect positions desired to support the organization.

ODCs:
5. Identify all additional direct costs required to support current and potential new contracts – materials, travel and other costs.

Indirect Costs:
6. Review your indirect expenses, such as fringe, overhead and g&a expenses by discrete line item.

Budget Notes:
7. Annotate all assumptions used in developing your budget: this will make it easier to analyze variances that may occur between the budgeted and actual amounts next year!

Update Pricing templates:
8. Based upon your reviewed and approved budget, use your updated indirect rates to update your pricing templates for future cost proposals.

Top 5 Wrap Rate Pitfalls a Small Business Should Avoid – By Linda Mahnke of Mahnke Consulting

From time to time we will be spotlighting guest bloggers in order to provide expanded insight into the world of government contracting.  Today’s guest blog comes to us from Linda Mahnke of Mahnke Consulting.  Linda’s experience in government accounting provides her with the background to discuss the topic of wrap rates.  

Top 5 Wrap Rate Pitfalls a Small Business Should Avoid – By Linda Mahnke of Mahnke Consulting

1. The small business wins the award, at a loss to the company.

Many small businesses bid a wrap rate they believe rivals competition, with no understanding of the actual costs (e.g., bookkeeping, rent) included in that rate.

2. The small business does not follow directions.

The solicitation (e.g., RFB, RFP) details what is and what is not included in the wrap rate. Usually, materials and travel are bid separately – but might be included in the rate.

3. The small business sees more value in technical quality than in managing the business.

By their nature, small businesses have room for few top executives – at least one of whom should be an administrative professional. Providing the customer better quality than expected, does not prevent suspension, debarment, and/or bankruptcy.

4. The small business is not prepared for a DCAA audit of the Accounting System and the Estimating System.

Even if all current awards, funded by the U.S. Government, are competitive, Fixed Price – growing small businesses want options. Consistent practices that reflect “the Government way” open opportunities for more types of awards. Actual incurred costs must be compliant (e.g. FAR, FAR supplements, labor laws, etc.), before using them as a basis for proposed estimates, especially wrap rates.

5. The small business builds the wrap rate on managers’ experience.

Build the wrap rate on supportable, auditable, general ledger data that both a) uses Job Cost Accounting (not accounting for the whole company), and b) a Chart of Accounts that encourages compliant recording of unallowable costs (per FAR 32.2).

Summary – The overall suggestion to avoid all five pitfalls above is to understand what should and should not be included in a wrap rate, understand the necessity of a solid wrap rate, and be able to support that wrap rate.

It’s That Time Again – The DCAA Contract Audit Manual Updates

Last year we had a post regarding those sections of the DCAA Contract Audit Manual (CAM) that were updated.  It seemed to be a helpful reminder to government contractors that the CAM is not a stagnant document and is also a helpful document in compliance.  

DCAA took another look again and the CAM has many sections updated recently.  It is always a good practice to have at least one person in your company be familiar with the current CAM.  Not the most exciting read in the world of course, but you could pick up on something critical to your success as a government contractor.  Here is a list of sections that have been updated already in 2012.

  • Chapter 3 – Audit Planning (2/21/12)
  • Chapter 6 – Incurred Costs Audit Procedures (2/17/12)
  • Chapter 7 – Selected Areas of Cost (2/10/12)
  • Chapter 8 – Cost Accounting Standards (2/23/12)
  • Chapter 9 – Audit of Cost Estimates and Price Proposals (2/17/12)
  • Chapter 10 – Preparation and Distribution of Audit Reports (3/2/12)
  • Chapter 14 – Other Contract Audit Assignments (3/6/12)
  • Chapter 15 – Other DCAA Functions (2/27/12)
  • Appendix B – Statistical Sampling Techniques (2/9/12)

(note that most of the remaining were updated in late 2011, so might as well read the entire thing!) 

http://www.dcaa.mil/cam.htm

What Does The Term Wrap Rate Mean?

Also referred to as the direct labor “multiplier”, it is a fully burdened labor rate – the rate at which an organization must bill out its direct labor units to cover its direct and indirect costs; before any profit is made.

For an organization to break even on a total cost basis – each unit of direct labor must cover the direct costs of that labor plus a proportionate share of the organizations indirects – fringe, overhead, g&a etc.

Understanding how to calculate these rates is crucial for a services based organization. Simply guessing at a labor rate in a proposal could be disastrous and costly for an organization, especially in a multiyear proposal where rates are locked in for several years.

Make sure you start with a solid budget. Understand what your staffing costs are and how they will change in the budget period.

Understand what your fringe benefits, overhead costs and g&a costs are comprised of and if they will change as your organization grows.

So the wrap rate for $1 of direct labor is the burdened rate that effectively covers all the direct and indirect costs necessary to support that labor, it could typically be anywhere from $1.50 to $2.25 for a small business.

The Debate About Commercial vs Government Indirect Rates

This topic really seemed to get some folks fired up!
There seem to be no obvious conclusions from the discussions except to say “it depends” …on:
1. Volume of commercial business vs. government
2. Identifying the Allocability of costs
3. Materiality of costs such as advertising and BD
4. On site vs Off site work
5. Cost / Benefit of taking the effort to manage these buckets separately.
Thanks for all of your input!

Indirect Rates: Government vs. Commercial

I am interested in your feedback!

Does your company (or your client) separate their indirect pools for government contracts from commercial contracts?

In assessing the cost / benefit for clients I am curious as to what strategies small government contractors are using to manage this process without overburdening the accounting department.