Synergy Enterprises Incorporated (SEI), based in Silver Spring, MD, is a small business that embodies the American Dream. Founded by naturalized citizen Prachee Devadas in 2003, the company has grown from one to over 110 employees. Starting a company in her home, Mrs. Devadas probably never guessed that she would end up providing services to agencies like the Departments of Education, Homeland Security, Health and Human Services, Defense, Energy, Transportation, and more…or that she would end up in the Oval Office advocating to the President for small government contractors. Continue reading »
Entering the government contracting sector seems especially enticing during a recession. While contracting may be a good fit for your business, make sure you’re aware of the unique aspects of dealing with the government.
Government contracting is big business in the Commonwealth of Virginia. Federal procurement spending in Virginia across all agencies totaled $53.9 billion in 2008. Historically, some have considered federal government work to be a safe haven during uncertain economic times. While profit margins on government contracts are relatively low, Uncle Sam tends to be a reliable and potentially long-term customer. During the current recession, the lack of private sector work combined with “stimulus” spending under the American Recovery and Reinvestment Act of 2009 (ARRA) is causing some companies to consider government contracting. Many of these companies are small businesses. Contracting with the federal government imposes requirements on companies not commonly found in the commercial market. By and large, the government is spending taxpayer dollars. Understandably, the government requires much greater visibility into how dollars are spent than is typically required in the private sector.
Read entire article at VSCPA site for an overview of some of the unique aspects of government contract accounting and the challenges that commercial companies will encounter as they move into the government market.
Tom Marcinko and Bill Foote, CPA, are with Aronson & Company, a nationally ranked top-50 accounting and consulting firm. As a member of Aronson’s Government Contracts Services Group, Tom assists clients with both pre- and post-award contract administration, compliance and other regulatory requirements. Bill serves as an officer in the firm’s Forensic & Valuation Services Group, where he assists government contractors with valuation projects and contract disputes. He is also a member of the VSCPA Editorial Task Force. Contact Tom at firstname.lastname@example.org and Bill at email@example.com.
Stimulus Workload Delays Awards of, and Modification Processing for, non-Recovery Contracts and Grants
“As many agencies attempt to implement Recovery Act (ARRA) requirements while carrying out their ongoing programs and operations, the awarding of contracts and grants is being delayed … and the oversight and monitoring of awards — especially non-Recovery Act contracts and grants – are expected to decline. ” This, according to the March 2010 Commerce Department’s Inspector General (IG) report. Several federal agency survey respondents acknowledged that without additional resources they will not be able to devote enough attention to processing modifications, updating contract management plans, monitoring contractor systems or tracking deliverables for their non-stimulus contracts. One agency (the Small Business Administration (SBA)) issued a memorandum to OMB on 4/9/10, describing workload challenges and outlining interim potential options such as use of another agency’s contracting services on a cost-reimbursable basis.
According to GovExec, the IG report, which was mandated by the 2009 American Recovery and Reinvestment Act, and conducted via survey by the Recovery Accountability and Transparency Board (RAT) further notes: Workforce challenges appear dire among officials administering grants, which represent a significantly higher portion of Recovery spending than contracts. Delays in awarding non-Recovery Act contracts have also been acknowledged. Continue reading »
The Administration raised the stakes for contractors or grantees that receive stimulus funding but fail to file the required reports. The American Recovery and Reinvestment Act requires quarterly reporting but did not include consequences for those recipients who fail to submit reports. During the last calendar quarter of 2009, more than 1,000 recipients failed to file reports, most of them grantees as opposed to contractors.
On April 6, 2010 President Obama directed Executive Agencies to use every means available to ensure that every recipient of stimulus funds has filed the required reports. The agencies must intensify their efforts to ensure compliance by terminating awards, pursuing suspension and debarment, reclaiming funds, and initiating other punitive actions whenever authorized and appropriate. Agencies are also required to report the names of non-compliant recipients to the Office and Management and Budget (OMB)along with the actions the agency is taking to obtain the reports. OMB also has 30 days to provide agencies with additional guidance on how to handle non-reporting recipients.
It was presumably good news when your organization received some of the stimulus money. Do not turn good news into bad news by failing to file the required reports.
SBA’s training portal offers free online training courses designed to assist entrepreneurs during this period of economic recovery. Courses provide targeted self-paced training for small businesses, including those owned by women, minorities, disadvantaged individuals and veterans. The self-paced, instructional guides provide an overview of the federal procurement process, provide information about the federal marketplace, contract rules and, most importantly, how to sell to the government and where to find contract and Recovery Act opportunities. This is part of a federal government-wide initiative to strengthen access to contracting opportunities being led by the U.S. Small Business Administration (SBA) and the Department of Commerce.
- The Recovery Act Opportunities course (www.sba.gov/fedcontractingtraining) is indexed by subject matter to allow ease of use, includes direct links that highlight the best contracting resources, and includes practical and fundamental steps to engage business owners in the federal contracting arena. It is one of more than 24 online tutorials offered by the SBA, and is available 24/7.
- In addition, SBA introduced its newest online course for women small business owners in September 2009, Winning Federal Contracts: A Guide for Women Entrepreneurs. This training module is also free, very comprehensive and includes numerous resources, including many targeted for women-owned businesses.
Have questions? Contract the government contracting professionals at Aronson & Company for assistance obtaining new contracts, administration and compliance of existing government contracts, and proposal pricing support among our many offerings!
The Montgomery County Department of Economic Development launched the FREE Stimulus Opportunity System (SOS) to help local businesses learn about, and better compete for, the more than $787 billion worth of American Recovery and Reinvestment Act (ARRA) contracting and grant opportunities, as well as other federal contracting opportunities.
20-25%+ of all federal contracts occur in Washington regional area. The Stimulus Opportunity System (SOS), located at at www.smartmontgomery.org, is a searchable online tool which provides essential information including department, agency, solicitation number, contract or grant name, online link and post date. Click on the following link for background material from the June 25 Stimulus Opportunities System Workshop.
Although we are entering a new calendar year, the emphasis on transparency and accountability that began in 2009 will continue to be a major pressure point for Federal Contractors in the immediate future. Increases to budgets and personnel at oversight agencies will flow down to contractors in the form of increased inquiries and audits. Furthermore, due to the political and economic climate, contractors should expect more scrutiny from legislators, the press and the public, especially in regard to projects funded by the American Recovery and Reinvestment Act (ARRA) and the controversial eVerify system. Penalties for non-reporting can be substantial and can result in consequences up to and including contract cancellation and debarment.
Please follow the link below to see a summary listing of major reporting requirements that may apply to your company. This list is not meant to be comprehensive for all users; please review your contract files to ensure individual compliance. Continue reading »
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.
While watching the local Fox morning program today, I was startled to hear the words “recovery.gov” coming from my television. My attention successfully diverted from my bowl of cereal, I listened to the anchor interview Elizabeth Williamston from the Wall Street Journal about a phenomenon they were calling phantom Congressional districts. Continue reading »
The Recovery Accountability and Transparency (RAT) Board extended the deadline for the first quarterly stimulus reporting to October 20, 2009. The reports were originally due by October 10, 2009. The RAT Board cited technical issues and stated that it was more important to get accurate information than to stick to the deadline. The technical issue apparently concerned some states collecting the data and reporting it in bulk. The reporting site, Federal Reporting.gov was not set up to accept bulk reports. Anybody reporting after the original October 10th deadline must include an explanation as to why they were late and their names will be posted on the website as late reporters.
What We Are Writing
- A Marriage of Inconvenience: GSA Schedule Contracts & The Contractor Code of Business Ethics & Conduct Clause
- Emerging Small Businesses: To Grow Your Business, You Must Plan For Growth
- Government Contracting: Look Before You Leap!
- GSA Schedules – Strategies for Success
- New Employee vs. Independent Contractor Considerations
- Pay on Display – Understanding the Executive Compensation and Subcontractor Data Reporting Requirements & Ramifications
- The GSA Schedule: Your Ticket to the Federal Market (May 2010)
- The New FAR Codes of Conduct and Compliance Program Provisions
- The Seven Deadly Sins (of contract compliance)