Archive for December, 2009

2010!! Resolutions for Government Contractors

Wednesday, December 30th, 2009

As calendar year 2010 starts so do most of our “New Year’s Resolutions.”  Once again Aronson will start the new year sharing our top resolutions for government contractors to get on track, get in compliance, and get ahead.  Please come back every day to read a new resolution to improve your business and register to post any comments or questions you have to share on the topics.

Check back on Monday for the first 2010 Resolution or better yet, subscribe to our Fed Point RSS Feed and have the news delivered directly to you! (Click here to learn more about RSS).

Small Businesses Will Reap the benefit from proposed new stimulus incentives

Monday, December 28th, 2009

As reported in The New York Times on 12/8/09, job creation tax credits, expanded loan guarantees and limited capital gains tax reductions are some of the new ideas in President Obama’s expansion of the original stimulus package. The new package includes:
- Small Business Administration loans – expansion of government guarantees and elimination of fees
- Qualified property tax write-offs – extension through 2010 of the existing incentive allowing write-offs up to $250,000
- Capital gains tax on small business investments – reduction or elimination

While the administration will try to expedite the new stimulus incentives, the final version of stimulus incentive package may not become final until early next year.  See the original New York Times article here.  Post your questions / comments on the here on the blog or contact Aronson & Company’s Tax Group directly: Mark Gossart, Officer: (301) 231-6278.

DOJ Gains Powerful Tool to Investigate Contractors

Thursday, December 24th, 2009

Congress has granted the Department of Justice (DOJ) expanded powers to investigate potential contractor false claims.  In 1986 Congress authorized the Attorney General to issue “Civil Investigative Demands” (CID) in furtherance of false claims investigations.  A CID is in essence a subpoena which allows the investigators to:
(1) demand copies of relevant documents,
(2) require written answers to interrogatories, and
(3) compel depositions.

In the more balanced culture of the 1980’s Congress recognized that granting investigators subpoena power outside of the checks and balances inherent in the Judicial system created the potential for abuse.  So Congress included the following procedural safeguards;
(1) each CID had to be personally approved by the Attorney General,
(2) Dissemination of the acquired information was limited to DOJ officials and members of Congress, and
(3) Dissemination of the information to other Government agencies required the approval of a U.S. District Court Judge and the showing of substantial need.

As a result of these safeguards, CIDs were used infrequently. However, the “balanced view” of the 1980’s has now become more enforcement oriented.  As evidence of this shift, in 2009 Congress enacted the Fraud Enforcement and Recovery Act which eliminated most of the CID safeguards and granted DOJ additional investigative powers.  (more…)

How do Inclement Weather and Extra Holiday Federal Closings Impact Federal Contractors Working at Government Sites?

Monday, December 21st, 2009

Federal contractors potentially have two unplanned Federal government closings impacting their business this month.  Federal agencies in the Washington, DC, area are closed today, December 21, 2009, due to inclement weather.  Therefore, federal non-emergency employees (including employees on pre-approved leave) will be granted excused absence for the number of hours they were scheduled to work.  In addition, President Obama issued Executive Order 15323, closing all executive branch departments and Agencies at midday on Christmas Eve (Thursday, December 24, 2009).

If you are a Federal Contractor with employees working on Federal Government sites, what do these closings mean to you? (more…)

VA Creates Set-Aside Program for Veteran-Owned Businesses

Thursday, December 17th, 2009

The Department of Veteran Affairs (VA) has implemented a set-aside program for veteran-owned and service-disabled veteran owned small businesses.  The final rule was published in the December 8, 2009 Federal Register.  VA contracting officers are now required to set-aside procurements between $100,000 and $5 million if two or more veteran or service-disabled veteran firms are expected to submit offers.  VA contracting officers will also have the authority to award sole source contracts to these firms for procurements valued between $3,000 and $5 million.  The decision of when to award sole-source contracts is largely left to the discretion of the contracting officer. 

Significantly, the veteran-owned small business preference will take precedence over all other socio-economic preference programs and service-disabled firms will take precedence over veteran-owned firms.  Also, prime contractors who propose to subcontracts with veteran owned firms will also receive evaluation preferences and past compliance with veteran-owned businesses subcontracting goals will be an evaluation factor.

Ironically, this announcement follows a recent GAO report that found extensive fraud in the current service-disabled veteran-owned small business program.  To participate in this set-aside program, firms must register with the VetBiz.gov Vendor Information Pages Database.  However, it will no longer be a self certification.  The VA Center for Veterans Enterprise must verify the data as part of the application process.  A company that misrepresents itself could face debarment for up to 5 years.

GSA eMod – Rapid Action Modification (RAM)

Wednesday, December 16th, 2009

On November 16, 2009 GSA introduced a new way to expedite administrative and deletion modifications via the eMod system, the Rapid Action Modification(RAM).

Why was RAM created? GSA analysis revealed that 30% of the modifications being processed on a monthly basis pertained to administrative and deletion modifications.  Utilizing the eMod system will help Contracting Officers (CO) cut down on the time it takes to process these types of modifications, allowing better use their time working on option period renewals, new awards etc.

Types of modifications that can be used via the eMod RAM process:

Administrative Modifications: Update of – authorized negotiators, contract administrator, phone number, fax number, email address, website URL, authorized resellers, etc.

Deletion Modifications: Deletion of - Products, labor categories, special item number (SIN).

How does the RAM modification process work? (Extract from GSA email).  When you log into the eMod system and submit an administrative or deletion modification request your CO will receive a notification that you have initiated a RAM modification.  RAM modifications are unilateral on the part of the government meaning that you will not be required to provide a digital  signature after submitting you request.  Your CO will view the request, and you will then receive notification (and if approved, an SF30) that your modification has been approve or rejected.

I find that using the eMod system helps better track and expedite modifications for my clients.  If you haven’t tried the system yet, give it a test run …  you will want to be prepared for the day when GSA announces that all contract actions must be processed through eMod.

IRS Continues the Decrease in Mileage Reimbursement Rates for 2010

Monday, December 14th, 2009

Citing lower transportation costs, the IRS will decrease by 5 cents the optional standard mileage rate beginning on Jan 1, 2010. The new rate of 50 cents per mile is lower than the previous year rates: 2009, 55 cents; 2nd half 2008 58.5 cents; and 1st half 2008, 50.5 cents. The new, lower mileage rates for 2010 for business, medical and moving purposes reflect generally lower transportation and gasoline costs compared to a year ago.

While the IRS determines the mileage rate for tax purposes, GSA is responsible for Federal Travel Regulation (FTR) rate determination. By law, GSA is responsible for reviewing the privately owned vehicle mileage reimbursement mileage rate on a yearly basis and GSA may not exceed the IRS’ standard mileage reimbursement rate for a privately owned automobile (POA). GSA matched the IRS rate in 2009 and 2008, but GSA has not yet matched the IRS rate decrease for 2010. Any adjustments to the FTR POV mileage rates will be immediately published in the Federal Register for official notification.

Revenue Procedure 2009-54 contains additional details regarding the standard mileage rates.  See the GSA Rate page for complete information on FTR rates.

Ms. Powers-King to Retire from GSA

Thursday, December 10th, 2009

Mary Powers-King, the GSA Director of GWACS and IT Schedule Programs has announced her retirement from Federal service effective January 3, 2010.  Ms. Powers-King was one of the most influential executives in Government Information Technology (IT) procurement.  Among other duties, she led the development of the Alliant and Alliant Small Business GWACS.  Ms. Powers-King was also responsible for approximately 4,700 IT Schedule 70 contracts that generated $16.4 billion of business volume during the last two fiscal years.

No successor has been named but NextGov is reporting that Jim Ghiloni, her deputy is considered a front-runner.  Ms. Powers-King stated that her post retirement options include, among other things, “keeping her options open.”  It is a safe bet we will see Ms. Powers-King joining industry in some form or fashion in the near future.

Contractors that Fail to File Stimulus Reports to be Penalized

Friday, December 4th, 2009

Failure to file the required Stimulus Reports or even filing them late will now subject the contractor to penalties ranging from “public embarrassment” to being ineligible to receive future Federal funds.  The new stimulus reporting guidelines are set forth in a Office of Management & Budget memorandum  dated November 30, 2009.  The OMB memo directed all Executive Agencies to submit a list of all non-compliant recipients to OMB by December 4, 2009.  Apparently the list of non-reporting recipients will be displayed on the Recovery.gov website. In addition, the Agencies must reach out to the non-compliant recipients to (1) re-request the reports, (2) provide any required technical assistance, and (3) warn the contractors of that there will be consequences for continued non-compliance.  Consequences will include a negative past performance report and could include termination of the funding or even being deemed ineligible to receive future Federal funds.

A Hit Below the Belt – MD Unemployment Tax to Triple

Wednesday, December 2nd, 2009

“The current national economic downturn has been the cause of changes to the Maryland Unemployment tax structure for 2010″ according to the Maryland Unemployment Insurance Trust Fund – October 2009 Update. The Maryland Department of Labor has announced that effective January 1, 2010, the Maryland unemployment insurance tax will more than triple – at a minimum – for Maryland businesses.

On September 30th of each year, the Department of Labor, Licensing and Regulation’s (DLLR) Unemployment Insurance Tax Unit is required to conduct a ‘temperature check’ of the status of the Unemployment Insurance Trust Fund. The result this year triggered a ‘statutorily mandated’ change for calendar year 2010. It was determined that there was a significant increase in the number of unemployment insurance claims filed over the last year.

The Baltimore Business Journal first reported September 25, 2009, that the state’s unemployment insurance fund is in danger of going bankrupt. That would leave businesses on the hook to replenish the account that has been depleted by the recession and an unprecedented number of laid-off workers. (more…)