The Changing Dynamics of Collaboration in Today's Small Business Service Contracting

INTRODUCTION
 

Collaboration in government service contracting is changing dramatically. 

Gone is the emphasis on one-upmanship, closed exclusive relationships and protectionism based on the idea that the government has an endless stream of funding available for a marching army of proprietary contractors.

The government is becoming more open, opaque in its dealings, driven by dire efficiency issues and weighed down with a massive debt load. 

Budget and funding pressures, competition for scarce resources, efficiency and similar concerns are creating an environment where open, accessible communication and teaming at several levels can yield excellent returns for progressive small enterprises and their partners.
These advances are being enhanced by communication and processes made instant with technology, remarkably enabled for creativity and teamwork, as well as the lower operating costs of a small enterprise.  The new collaboration includes reaching out to clients, industry partners and suppliers. It also requires employee involvement at all levels in the dynamics of the collaborative process. 

Although sound, professional and business contracting techniques will always be necessary, together with prudent management and risk analysis, the collaborative dynamic is on the move. 

BACKGROUND

The A-76 Program - "Performance of Commercial Activities" 2001 -2009

The concept of A-76 first began as a statement of federal policy under the Bureau of the Budget in the Eisenhower Administration, and developed into a formal A-76 policy statement in 1966.

The policy stated that the government would rely on the private sector for the performance of commercial activities via competitions between government and contractors. OMB Circular A-76 has been revised several times, the latest revision in 2003. Competitive sourcing through A-76 was a major initiative identified in 2001 by the Bush Administration’s Presidential Management Agenda. It was one of five government-wide initiatives to improve the management and performance of the federal government. Some Members of Congress were critical of the conduct of A-76 competitions between government and contractors under the Bush Administration, and this criticism and ensuing debate over whether to conduct future A-76 Competitions contributed to the current moratorium. President Obama signed into law the FY2009 Omnibus Appropriations Act which suspended all new A76 competitions government wide. 
 
http://www.fas.org/sgp/crs/misc/R40854.pdf

The government is seeking renewed recommendations on what to do internally and what to contract:

Federal Register / Vol. 78, No. 32 / Friday, February 15, 2013 / Notices

The Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB) seeks input from the public on the practice of comparing the relative cost of performance by Federal employees versus contract performance in order to identify the most cost-effective source. OFPP intends to consider feedback received in response to this notice as it evaluates existing policies addressing cost comparisons and considers new ones to help agencies save money and drive better results. Feedback will also be considered in connection with the development of guidance required by section 1655 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2013, Public Law 112–239. Section 1655 requires OMB to publish guidance addressing the conversion of a function being performed by a small business concern to performance by a Federal employee. Interested parties may offer oral and/ or written comments at a public meeting to be held on March 5, 2013. Parties are also encouraged to provide all written comments directly to 

 http://www.regulations.gov/#!home

It can be assumed from the above history and recent developments that some form of renewed "Make or Buy" policy from the federal government will be forthcoming as agencies are forced to downsize and get the most from their allocated funding.

http://www.pogo.org/blog/2013/04/20130419-white-house-takes-on-federal-vs-contractor-costs.html

RECOMMENDATIONS

Now is the time to take the initiative in designing collaborative efforts with federal agencies, marketing solutions that maximize contractor and government resources and the best possible efficiencies in service solutions. Go in early, go in hard, go with a team concept and be open and objective with your primes, your suppliers and your customer. Engage your employees at all levels in the effort.
　
"In short, there will be a lot of bad news being doled out to prime contractors and their suppliers", Brett Lambert, deputy assistant secretary of defense for manufacturing and industrial base policy, said April 25 at a Center for Strategic and International Studies forum in Washington, D.C.

"There will be trades, we should make no illusions," Lambert said. "We will identify critical key suppliers that will go under because we will have made the assumption, based on our strategy moving forward, that that is no longer a critical capability to our future force. … Unfortunately there’s going to be a lot of bad news that’s given out to companies.

http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=1127

Many are planning strategically, are you?

http://www.smalltofeds.com/2010/11/insights-to-succeed-in-small-business.html






 
　

　

　

MANAGING SMALL BUSINESS RISK IN FEDERAL GOVERNMENT CONTRACTING

The challenges and difficulties for the small business in government contracting are not so much in the areas of barriers as  they are in lack of knowledge (which I concede is a form of barrier but one that can be dealt with)

Large business and government agencies take advantage of the small enterprise lack of knowledge or make poor assumptions regarding what a small business knows about the Federal Acquisition Regulation (FAR) and associated Cost Accounting Standards (CAS). This leads directly to abusive practices.

A prime example of an abusive practice is large corporations signing  teaming agreements during proposal efforts and then not awarding  subcontracts to the small enterprise as agreed, keeping the majority of work for themselves.

 Agencies take forever these days to put in place actual prime contracts after source selections and award to a small business. They do not realize that a small enterprise does not have deep pockets and must have cash flow to sustain a new program with new employees.

Funding levels on IDIQ and Omnibus programs are insufficiently committed and the small enterprise is not adequately informed about limitation of funds and  funding exposure. 

http://www.smalltofeds.com/2007/09/limitatoin-of-funds-and-funding.html

I have seen enough small  businesses succeed in the government contracting field that I am  convinced that the government needs more active roles in education of  the small enterprise and more trained contacting officers that understand the limitations of a small business.

The most common traumatic situation I encounter is with newly  established businesses who have won their first government contract and  have no CAS compliant job cost accounting system in place to bill it  out. The government has assumed that capability will materialize and  when it does not they audit the bills, find no backup and shut down the  cash flow until the system is fixed. At that point the business can fail. The company should have been educated much earlier in the process about these requirements.

 http://www.smalltofeds.com/2012/09/what-small-business-should-know-about.html

The number of poorly performing SETA contractors in roles not suited  to them in contract administration support is increasing in federal  agencies. These firms need to be vetted and better managed for the  omissions and commissions they contribute to the above.

  http://www.smalltofeds.com/2012/07/is-small-business-federal-government.html

Not every small enterprise can get  into a class on government contracting at George Washington University,  The Defense Acquisition University or send their personnel to lengthy  and costly seminars conducted by organizations like the National Contract  Management Association. These are  great education sources but do not  come close to filling the complete requirement and they cost time and money.

The contracting officer and his staff as well as larger enterprises need to be upgraded in the skills necessary to guide - not abuse - the small business in federal government contracting.

FIVE STRATEGIES FOR SMALL BUSINESS DURING TIGHT GOVERNMENT BUDGET TIMES

INTRODUCTION:

The budgets for over 100 agencies making up the federal government are shrinking.  Decision makers are being forced to seek suppliers who can fulfill needs at the lowest acceptable price and still provide best value.

With the budget ax falling hard, the smaller enterprise will have opportunity to perform vital functions at lower cost burdens than the larger corporations.

Acquisition officials running lean on help will speed up the acquisition process, issuing necessary requests for proposals to companies and executing contract awards quicker.  Marketing must be focused and fine-tuned. 

The sooner the government can receive the feedback from the draft RFP, the more likely it is that the service acquisition teams can adapt the programs to industry and economic realities.

Officials have recently been quoted as saying, “We probably will be getting the requirements out and the drafts out earlier to industry so they can review and comment on it and we can get real comments back and real input so we can execute the process a little bit better, define it quicker and get it to the award much sooner”.

http://www.dodbuzz.com/2013/02/21/phillips-army-must-streamline-requirements-process/

This article will address strategic planning tips for the small enterprise in planning for the future, given the above realities.

STRATEGIES

1. Operation and Maintenance (O&M) Funds Are a Solid Bet for Service Contractors

Operation and Maintenance (O&M) appropriations are used to finance expenses not related to military personnel or Research, Development Test and Engineering (RDT&E). Types of expenses funded by O&M appropriations include: DoD civilian salaries, supplies and materials, maintenance of equipment, certain equipment items, real property maintenance, rental of equipment and facilities, food, clothing, and fuel. 

O&M funds are more easily justified in appropriations for "Keeping the Lights On" functions and often do not expire at the end of the government fiscal year.  If you are a service contractor target programs with (O&M) funding.  Look for service contracts being considered as set asides for small business on an O&M basis, sharpen your pencil and your best value marketing approach and chase them as a prime contractor or with a highly competitive industry team that needs your contribution to succeed.

2. Sharpen your Marketing Activities in Targeted Agencies and with Industry Teams to Get In Early on Agency Requirements.

Pre-solicitations are alerts to industry, attempts to gauge industry interest or a way of "Kicking the Can Down the Road" until funding becomes available.  These notices are an indirect way of saying, "Come Visit Me and tell me about your company", or “Send Me your capabilities statement (CAPE)”. The full formal notification will come out at a time to be determined by when the agency gets the funding and how much interest there is in the contractor community. A schedule for when the formal bid notice will occur is rarely posted.

Please read the following article carefully for further guidance:

http://www.smalltofeds.com/2009/09/what-small-business-should-know-about.html

3.  If Your Firm has Small Business Designations, Focus Agency Personnel on Making Their Programs Set asides for Your Designation (Small, Veteran-Owned, Woman-Owned, Minority Owned, Etc.)

Pay particular attention to FEDBIZOPPS "Sources Sought" or “Requests for draft RFP Comment” on programs that have yet to be formally solicited. Obtain an appointment to present your capabilities to the decision makers (not the gate keepers). 

http://www.smalltofeds.com/2011/05/your-capability-statement-cape-for.html

Be courteous to contracting officers but understand they are not the individuals who make source selections. Understand that once the requirement is formally published on FEDBIZOPPS the gate closes on informal visits to the customer and the competition begins in the form of proposals by competitors.  It is too late at that point to set the program aside for a sole source or a small business designation if it has not occurred by the publication stage.

4.  Fine Tune Your Marketing Sensitivities to WHAT Agencies are Buying and HOW they are Buying Supplies and Services

You must determine what those needs are through market research, trade magazines, research on what they are buying on FEDBIZOPPS, as well as postings on their web site that are future-program oriented.

Subscribe to periodicals like "Washington Technology" and other trade magazines.  Observe agency trends and analysis that impact your market segment.  There have been set aside programs marketed by small companies through acquainting agency management and technical personnel with capabilities they were not aware existed in the small business community or fulfillment of needs they in fact did not know they had.

5. Teaming Is Critical in a Shrinking Base of Government Programs

Federal agencies will continue their natural penchant to bundle requirements to get the most out of their management dollar.  However, the bundles will become fewer and more competitive. Position your company with the best possible industry partners in view of the changing budget scene.

Synergism is paramount in teaming with any size company, whether in a lead or subcontracting role. There should be technical, management and market segment similarities between you and any company with whom you are considering teaming. Your prospective team member ideally will not be a direct competitor; rather a business in a related field with whom you share a mutual need for each other's contributions in pursuing large-scale projects.

Relationships must be developed with primes and other small businesses that can help you, team with you and keep you in mind as they search for success. That takes time, patience and open-minded, out of the box thinking. It also takes more than a Non-Disclosure Agreement (NDA), a teaming agreement (TA) and a proposal to succeed. It takes dynamic marketing and communication with strong partners and hard, innovative work. Nice buzz words you say - but it is the truth and you have to find what that truth means to you.

http://www.smalltofeds.com/2009/05/small-business-teamiing-in-government.html

SUMMARY:

Success in the current small business government contracting environment will come through careful market research, focus on funding types that are sustainable appropriations, zeroing in on decision makers early with set-aside marketing techniques and teaming with strong industry partners. 

10 MISCONCEPTIONS ABOUT SMALL BUSINESS FEDERAL GOVERNMENT CONTRACTING

INTRODUCTION

This article will address 10 misleading or erroneous impressions that small enterprises commonly hold regarding doing business under federal government contracts.  It is our hope that correcting these misconceptions will assist companies considering entering the venue and help those who are already in the field to improve.

MISCONCEPTIONS

1. It is easy to become established in the federal marketplace by founding a start up in small business contracting to the federal government

Very few do so. The principle reason for this is lack of past performance records either commercially or as a registered government contractor.  Past performance is a major factor in awarding government contracts:

http://www.smalltofeds.com/2008/07/small-business-government-contracting.html

Small enterprises who succeed in federal government contracting usually have a sustaining commercial business as ongoing support while they learn federal contracting bid, proposal, and pricing, industry teaming and marketing techniques.

http://www.smalltofeds.com/2013/01/your-entry-points-into-small-business.html

2. Federal government contracting is just like local and state contracting

It is not.  Every local and state government agency has their own set of rules and contracting techniques.  Although states must meet federal law with regard to interstate trade, EEO and similar matters, they are given wide latitude by the federal government. Most state and local or municipal agencies are very dissimilar in the specifics of how they conduct procurements and are strongly influenced by community ordinances and state law. 

Federal government contracting has its own set of specific rules (The Federal Acquisition Regulation (FAR) and  Cost Accounting Standards (CAS) which cross all agencies.  Small business must understand how these rules affect their doing business at the federal level.

http://www.smalltofeds.com/2012/09/what-small-business-should-know-about.html

3. Business can be conducted at the federal level without significant process changes from commercial practices

To succeed in federal contracting the small enterprise must implement processes such as GSA pricing, job cost accounting, forward pricing rates and related matters that are not common in the commercial venue. This takes research, time and process/business systems implementation that many firms overlook until they realize, through hard experience, that they must develop them on the fly to succeed.  Federal government contracting is not rocket science but it is different than commercial contracting.

http://www.smalltofeds.com/2009/09/federal-government-contracting-small.html

4. Federal government contracting can begin immediately after registration

This is a hypothetical possibility but not realistic.  Registration simply self-certifies a small business to compete, establishes a Central Contractor Registration (CCR) Number and a Federal CAGE Code for the firm.  Agencies do not go looking for registered firms to do business with them.  A niche must be located by the prospective contractor in the form of an agency requirement that fits the company. Or the company must locate industry team member (s) that can use capabilities available from the newcomer.  Very small enterprises achieve these objectives to a large scale degree within their first year of pursuing contracts with the federal government.

http://www.smalltofeds.com/2009/09/federal-government-contracting-small.html

5.  All federal government contracting agencies are the same

Not so. Department of Defense (DOD)  contracting, for instance is very different than contracting with  civil agencies like the FAA.  The technical requirements, environment and security factors vary dramatically even though they use the same contracting rule book. The seller must market to the agency that has the greatest need for the product or service offered and team with industry partners who can enhance the potential of the small business in collaborative efforts. Section I, “Contract Clauses” at the below link illustrates some of the FAR Agency Supplements that apply overall FAR guidance within specific agencies.

http://www.smalltofeds.com/2007/11/federal-government-contract-format.html

6. Small Business set aside designations will yield immediate business

Self-certifying as a minority-owned,  woman-owned, veteran-owned or disabled, veteran- owned business allows a firm to compete with other companies who have the same designation. At times this involves substantial competition.   Achieving a government certification as a small-disadvantaged 8(a) or HUB Zone enterprise may allow set-aside contracts without competition, but such awards are becoming rare, harder to justify by the government and are monitored closely for competitive possibility by oversight functionaries. 

http://www.smalltofeds.com/2009/06/federal-government-contracting-small.html

7. Federal government contracting can be undertaken by a company on a stand-alone basis

This is only true for companies with very unique, off the shelf products involving small buys.  Even then, knowledge of the industry and networking with other firms dramatically increases the possibility of expanding sales.  Relationships must be developed with primes and other small businesses that can help the small firm, team with with it and keep it in mind as they search for success. That takes time, patience and open-minded, out of the box thinking.

Synergism is paramount in teaming with any size company, whether in a lead or subcontracting role. There should be technical, management and market segment similarities between the small business and any company with whom it  is considering teaming. A prospective team member ideally will not be a direct competitor; rather a business in a related field with whom the small enterprise shares a mutual need for each others contributions in pursuing large-scale projects.

http://www.smalltofeds.com/2009/05/small-business-teamiing-in-government.html

8. Small Businesses receiving set aside contract awards from the federal government can subcontract all the work to other, larger and established enterprises

Companies obtaining small business set aside awards must be capable under the law of performing a minimum of 51% of the required effort internal to their organization.The quantitative measurements the government uses to gauge this rule are the work scope, hours and dollars content of the prospective contract.

9. Obtaining a GSA schedule guarantees new business

A GSA schedule permits a quick ordering process for  federal and state clients. In dealings with prime contractors to which the small firm aspires to subcontract a GSA schedule is valid pricing which can be readily included in proposals to government agencies. A GSA schedule facilitates teaming with other synergistic small companies in proposing large scale efforts.

However, a GSA schedule does not guarantee new business will come. Very few companies await government agencies to find them by searching the GSA data base. To succeed, small businesses must actively market their schedule to targeted agencies as an expedient way to contract with them or as a qualification criterion for new business awards.

http://www.smalltofeds.com/2007/05/achieving-and-utilizing-gsa-schedule.html

10.  FEDBIZOPPS is the best way to identify, bid and obtain federal government business 

Often misunderstood, is that much has occurred in the way of marketing activities by companies in advance of notices formally published by the government on FEDBIZOPPS. By the time the formal, solicitation is published it is too late to market for setting a procurement aside for a small business designation if it has not already been established as such. In addition, formal solicitation publication closes the window on self-marketing by HUB Zone and 8(a) firms for set asides to them individually without competition. In short, businesses have been marketing for a requirement long before it became formally announced at FEDBIZOPPS.

Finding a solicitation that is ideal for a company for the first time on FEDBIZOPPS is excellent market research insight into what the agency publishing the requirement is buying. However, a careful bid/no bid analysis should be conducted as to whether it is prudent to go through the expense of a proposal if the opportunity has not been a new business target for the firm earlier in the game.

http://www.smalltofeds.com/2009/09/what-small-business-should-know-about.html

SUMMARY:

Federal government contracting is not a quick process; but for many it can provide a steady cash flow and potential growth.  

To succeed, a carefully constructed, relationship-driven, marketing and business operations program must be developed, tailored to the federal environment. The program must include adequate research and preparation with respect to bid decisions, teaming, proposal preparation pricing and business system requirements. 

http://www.smalltofeds.com/2009/07/multiple-front-marketing-in-small.html

YOUR ENTRY POINTS INTO SMALL BUSINESS FEDERAL GOVERNMENT CONTRACTING

INTRODUCTION:

"Sequestration" will have a tightening effect on the budgets for over 100 agencies making up the federal government.  However, there will be a continuing need for products and services of every type to support ongoing operations and continued progress in the technical and IT fields.

The government is being forced to evaluate suppliers who can fulfill these needs at the lowest acceptable price and still provide best value. Small business has lower overhead and G&A rates. With the budget ax falling hard, the smaller enterprise will have opportunity to perform vital functions at lower cost burdens than the larger corporations.

This article will discuss product and service venues you may wish to consider and how to conduct market research to assess your potential entry point in the small business federal government contracting venue.  

POINTS OF ENTRY

The best place to start in determining a government contracting entrance point is with successful commercial performance of services or product development. Very few, if any, commercial firms make the transition without that bridge.

From maintaining buildings to keeping the lights on, from grounds maintenance to flight maintenance, look for niches that can be pursued based on successful past performance, transitioning via industry teaming via subcontracts, partner roles with larger companies or in small business set aside orders for minor items and simpler services provided directly to the government.

The service venue is the most common entry point and services are at times the vehicles to achieve product development tailored to agency needs. Please see the following synopsis of  concepts in this area and associated links for more details on each:

Multiple Front Marketing

With the economy under duress and federal recovery funding finding its way into multiple venues across the country, the prudent small business will target agencies and teaming partners that best fit its products and services, positioning itself to acquire developing information on requirements and displaying capabilities by conveying early solutions to customer decision makers. This article will suggest techniques, approaches and tools to conduct a multi-front, targeted, requirements-driven, marketing campaign for small business federal government contracting.

http://www.smalltofeds.com/2009/07/multiple-front-marketing-in-small.html

Small Business Set aside Designations 

There are 7 major, small business set-aside designations in federal government contracting. Below is a listing of these designations, divided into two groups, Self-Certifying at the Central Contractor Registration (CCR) and those where government certification is required.

http://www.smalltofeds.com/2009/06/federal-government-contracting-small.html

Techniques for Product Development 

This article will suggest approaches in developing a product to the point where it can be marketed in the small business federal government contracting venue. Individuals usually succeed at such an endeavor by forming a company, separating it from their personal assets and then developing the company and its product(s); even if it is only a one-person operation at the start. 

http://www.smalltofeds.com/2010/06/techniques-for-product-development-in_01.html

Teaming

While developing a government marketing plan, teaming with other companies is a productive venue for the small business. This article will convey general guidance pertinent to teaming and explore the types of teaming used successfully by small business federal government contractors.

Synergism is paramount in teaming with any size company, whether in a lead or subcontracting role. There should be technical, management and market segment similarities between you and any company with whom you are considering teaming. Your prospective team member ideally will not be a direct competitor; rather a business in a related field with whom you share a mutual need for each other's contributions in pursuing large-scale projects.

http://www.smalltofeds.com/2009/05/small-business-teamiing-in-government.html

SUMMARY:

Small business federal government contracting is not rocket science - to succeed you must take what you do well in the commercial market place or what your experience leads you to believe you can plan successfully as a commercial enterprise and then apply it in a slightly different manner from a business perspective to accommodate federal government contracting requirements. Very few companies enter federal government contracting without some commercial experience and success. Very few start-ups entertain contracting exclusively to the federal government without commercial work to sustain operations while the more lengthy government procurement process is being pursued.

Federal government contracting is controlled by the Federal Acquisition Regulation (FAR). Bid and proposal types are driven by the nature of the supply or service being procured. No one reads the FAR cover to cover - It is a source book for when you need it. The FAR and associated regulations are taught in only a few colleges, such as the Defense Systems Acquisition University at Ft. Belvoir and the George Washington School of Government Contracting. Very few CPA's are familiar with the US Government FAR Cost Accounting Standards (CAS) and I am not aware of any questions regarding CAS on current CPA exams. In general one must grow to understand these requirements and that usually happens by doing business under them. 

 http://www.smalltofeds.com/2012/09/what-small-business-should-know-about.html

HAPPY HOLIDAYS 2012 FROM SMALLTOFEDS!

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“VALUE-BASED” MARKETING TECHNIQUES FOR SMALL BUSINESS

INTRODUCTION:

Previous posts and the marketing section of the book available as a free download at this site have offered guidance on the mechanics of marketing to the federal government (Chapters 14-25).

This article will explore an area some consider a bit more sophisticated in terms of marketing techniques - “Value-Based” Marketing. It occurs when you become uniquely aware of what motivates specific personnel internal to an agency or a prospective teaming partner to make favorable decisions regarding your product or services. 

COMPONENTS:

Value-based marketing does not relate to client perception of your product or service value; rather, it relates to your understanding of the client and using that knowledge to motivate that client to buy.  It includes answering the following 5 strategic questions:

1.  Who is your client? (personal traits and proclivities)

2.  Where  is your client located in the organization and what role and authority does he or she hold?

3.  What  are the driving factors that will motivate the client to make a buying decision in your favor?

4.  How to best lead the individual client to the conclusion you wish them to make in buying your product or service?

5.  Why is your product or service the best to further the client's personal value system and motives?

METHOD:

Combine the details of your product or service with some transition suggestions regarding how a client can make the leap from where they are now to where you can take them without totally disrupting how they operate at time now.  

Understand that to sell the services and the product you are offering you must provide a bridge for those who do not have your vision of the end game. 

It is a simple fact of life that your sales techniques must provide practical suggestions in getting your client off a blank sheet of paper as to how your concept could be brought internally to their organization.  That can only occur if you are sharp enough and aware enough of their existing processes and systems, status, plans, budgets and funding to offer them a path to follow.  This type of market research is a tough order but you will not sell effectively without it.  

Sometimes clients will not disclose personal values and organization value systems until you are engaged with them and at that time you must be sympathetic to transition issues, think on your feet and evolve a way to get to your sales objective; not just insist that they change dramatically to accommodate your concept. 

Ask the client questions about what you know or have found their needs to be. Then take them to where your presentation has solutions for them; engage them on a solutions frequency and make your concept of the future theirs. A key will be your ability to make the client want to own your product or service in their environment and your assistance to make them as individuals look good for acquiring what you sell to increase their visibility and productivity in the organization. 

Consider the values of the client your are engaging and threaten or further his or her value system.  To do so, find out what they value first.  It may not be what you value - or what you believe they should value;  but you are stuck with those values and the value system backing them up. In many cases they are political, self-serving and disappointing but you cannot ignore them.  You must manage them.  You must threaten or further those value systems to get your customer to act.  Furthering client values is a positive view of the future, enhancing what the client already has.   Threatening client values is making the client feel he or she cannot undertake the future effectively without buying from you.

SUMMARY:

I once had the privilege of experiencing a professor who conducted a course on managing people for 3 days to our management group.

For those 3 days the instructor did not allow us to use the word, "Problem". His message was that there are no such things as problems - just situations that threaten or further peoples' (or the corporate culture values).

Through a series of exercises, mock situations late into the night, critical negotiation teams and value determination exercises he demonstrated that his theory was absolutely correct and that if one determines the values involved in a challenging situation, then develops solutions that threaten or further them, one will motivate people to take action.

Value-based marketing effectively threatens or furthers your client's value system as a strategic element in your marketing program, motivating them to act  in your favor. 

What Small Business Should Know About FAR and CAS

Federal Acquisition Regulation & Cost Accounting Standards

      Rules of the Game

       Developing Your Game Plan

INTRODUCTION

Small businesses consistently encounter FAR and CAS requirements upon entering or growing into federal government contracting.   The purpose of these standards is to supply uniform regulatory guidance to all companies doing business with the government and to the agencies that buy from them.

This article will discuss a basic understanding of FAR and CAS as well as the methods to design approaches to meeting them. 

OVERVIEW

The below table contains the principle FAR chapter titles and each of the 19 CAS clause titles (CAS 419 was never written).  Linked below the table are the web sites that can be utilized to explore these documents. 

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http://www.acquisition.gov/far/     

  

https://www.acquisition.gov/far/html/FARTOCP30.html

The FAR applies to the full acquisition cycle for all supplies and services the federal agencies buy.  The CAS apply to consistency in estimating, pricing, job cost accounting, billing and closeout of financial data under the contracts for supplies and services regulated by the FAR. 

FAR and CAS are not "Rocket Science" but they are different than the commercial business sector.  

HOW TO DETERMINE WHAT FAR AND CAS MEAN TO YOU

No one ever reads the full body of FAR and CAS from cover to cover.  They are reference documents, maintained by the government to oversee the contracting process.  From time to time changes to the regulations are offered for public comment at the FAR web site.  Such changes are more common in the FAR than in CAS.  The CAS have been constant for several years and are not as dynamic as the detail processes in the FAR. 

FAR

Determine the regulation basics that apply to any given job considered for bidding.  Examine a few solicitations in your area of expertise at the FEDBIZOPPS web site:

https://www.fbo.gov/

Use the FAR and CAS links to determine the basic terms and conditions and examine the solicitation source documents to read in detail the clauses you must understand to effectively bid federal work.  

CAS

Small businesses are generally required to meet modified CAS coverage.  A business system meets Modified Cost Accounting Standard (CAS) Coverage defined by the government when it it satisfies the following:

Standard 9904.401, Consistency in Estimating, Accumulating, and Reporting Costs

 
http://edocket.access.gpo.gov/cfr_2005/octqtr/pdf/48cfr9904.401.pdf

Standard 9904.402, Consistency in Allocating Costs Incurred for the Same Purpose

 
http://edocket.access.gpo.gov/cfr_2004/octqtr/pdf/48cfr9904.402-50.pdf

Standard 9904.405, Accounting for Unallowable Costs

 
http://edocket.access.gpo.gov/cfr_2007/octqtr/pdf/48cfr9904.405-40.pdf

 
http://www.smalltofeds.com/2007/04/unallowable-costs-under-federal.html

Standard 9904.406, Cost Accounting Standard―Cost Accounting Period

 
http://edocket.access.gpo.gov/cfr_2001/octqtr/pdf/48cfr9904.406.pdf

The following article contains practical business system guidance regarding building a Modified CAS Coverage Small Business System for federal government contracting:

http://www.smalltofeds.com/2010/10/managing-risk-in-small-business-federal.html

HELP

 
When you have confusion regarding interpreting a requirement, seek assistance in the table of contents to the free book at this site offering guidance under the topic in question:

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You may also set up a free counseling connection at Micro Mentor:

http://www.micromentor.org

Search for Mentor Kenneth Larson 

SUMMARY

While assessing the impact of FAR and CAS on your company educate yourself on that what directly affects your company first in making the transition to federal government contracting and growing into the field.

Carefully  maximize your existing business processes and systems first before making changes and do not jump to instant fixes with exotic software tools a supplier or consultant has told you will make you compliant or competitive overnight in government contracting.
FAR and CAS are generally logical bodies of regulation that have come about due to the need to control and make consistent the government and industry approaches to meeting prudent and sound contracting objectives with the necessary  transparency to govern. 

FAR and CAS do not impose business systems.  They do require that you disclose the way you meet regulatory requirements in the way you operate with your processes and tools. Plan the approach and learn to convey it to auditors, contracting officers and industry partners.

Grow into the business by exploring the venue and having it grow into you.