Search This Blog

Wednesday, May 20, 2020

Managing Government Contract Limitation of Funds and Funding Exposure

Photo:  Getty Images
Some contractors choose to operate on "risk," continuing to perform on a contract while exceeding the incremental funding in booked cost and obligations. The government is under no obligation to reimburse the contractor for amounts exceeding incremental funding.

Nearing the end of a government fiscal year or under a government shutdown a contractor may find delays in funding reaching all the way to congress. This situation must be managed with the government contracting officer.


Many federal contracts are funded incrementally, usually based on the government fiscal year that runs from 1 October to 30 September. Although the government may negotiate dollar price ceilings for cost plus and time and materials contracts or firm, fixed total price arrangements, the contracts themselves may be incrementally funded, particularly if they extend over two or more government fiscal years. A contract may contain negotiated prices or a cost ceiling but also specify an incremental funding value.


The contractor is required to inform the government when actual costs incurred plus obligations to suppliers or payroll on a specific contract reach certain thresholds of the current incremental funding specified in the contract (usually 80%). The government is then obligated to further fund the contract. In the event the contract is not funded further, the contractor has the right to stop work before he exceeds the incremental funding.

If a contract is not funded to continue and the contractor has performed to date in accordance with all required terms, the government retains the right to terminate the contract for the convenience of the government. This requires a special notification to the contractor from the government and usually occurs due to changes in government priorities. The contractor may then bill the government for all costs and obligations to date, plus any direct and indirect extraordinary costs associated with business disruption, termination administration, employee layoff cost and the like. Terminations for convenience are very expensive for the government. Nevertheless, limitation of funds and funding exposure must be carefully monitored by an astute small business.


To properly manage incremental funding, the business system must be capable of accounting monthly for all direct and indirect costs on each contract, plus commitments to suppliers and employees in the form of open purchase orders and unpaid or unposted payroll.


Your internal release document should specify the current incremental funding if your contract is not fully funded at award. Further revisions to your release documentation should convey receipt of contact amendments from the government that supply additional required funding to the contract as performance proceeds. Requests for increases in incremental funding are required when the actual booked cost plus commitments to suppliers reaches 80% of the current funding on the contact. In the event the contact is not adequately funded incrementally by the government, a revision to your internal release documentation should specify a stop work order after you have notified your customer that you plan to cease performance on the contract due to lack of sufficient funding. Notification should be provided to suppliers under your contract with a stop work to avoid their incurring additional costs for which you are not receiving funding from the government. Be specific with a stop work date to these suppliers.


In the event the contract is terminated for convenience, a new revision to your internal release document should set up a special project and identifying number for accumulating costs specifically associated with the termination. These costs will be billed separately to the government under a termination contract modification and should be carefully recorded. Both direct costs and indirect costs at all levels of the company may be charged direct to a contract termination for convenience. You can expect your suppliers to bill for cost to date and termination cost as well. You will pass on those costs to the government in your proposal for termination for convenience of the government. The government will assume ownership of all inventory and work in process on terminated cost type contracts. Termination proposals, audits, negotiations and contract closeout can be lengthy and complicated proceedings.

Tuesday, May 19, 2020

Utilizing The Freedom of Information Act (FOIA)

Image:  ATF.gov
INTRODUCTION 

The purpose of this article is to discuss the background and administration of the Freedom of Information Act (FOIA) and suggest tips in using the FOIA as a tool in operating your business.

BACKGROUND

Extract: United States Department of Justice Web Site:


What is FOIA?

“Enacted on July 4, 1966, and taking effect one year later, the Freedom of Information Act (FOIA) provides that any person has a right, enforceable in court, to obtain access to federal agency records, except to the extent that such records (or portions of them) are protected from public disclosure by one of nine exemptions or by one of three special law enforcement record exclusions. A FOIA request can be made for any agency record. Before sending a request to a federal agency, you should determine which agency is likely to have the records you are seeking. Each agency’s website will contain information about the type of records that agency maintains.

The FOIA is a law that gives you the right to access information from the federal government. It is often described as the law that keeps citizens in the know about their government. Under the FOIA, agencies must disclose any information that is requested – unless that information is protected from public disclosure. The FOIA also requires that agencies automatically disclose certain information, including frequently requested records. As Congress, the President, and the Supreme Court have all recognized, the FOIA is a vital part of our democracy.”

POINTS OF CONTACT (POC)

The following  link is a global means to determine points of contact for a specific request.  


I Want To Make a FOIA Request

A typical POC page will look like this:

"Contacts
The Office of Management (OM) advises the public and U.S. Department of Education (ED) employees regarding FOIA requests and ED information available to the public. As the lead organization for ED's FOIA Program, OM provides training for ED officials and guidance and support to the FOIA Coordinators and FOIA Review Officers in the Department's Principal Offices and 12 regional and field offices.
Send requests via email to: EDFOIAManager@ed.gov
Send requests via fax to: (202) 401-0920
Send requests via mail to:
U.S. Department of Education
Office of Management
Office of the Chief Privacy Officer
400 Maryland Avenue, SW, LBJ 2E321
Washington, DC 20202-4536
ATTN: FOIA Public Liaison
FOIA Requester Service Center
(202) 401-8365
FOIA Director
(202) 453-6362
Gregory Smith
FOIA Public Liaison and Team Lead 
(202) 205-0733
Robert Wehausen
FOIA Analysts
(202) 401-8365
Elise Cook
Arthur Caliguiran
Christie Swafford
FOIA Appeals
(202) 401-8365
Arthur Caliguiran
Privacy Act Requests 
(202) 401-8365
Elise Cook
Website: FOIA Request Forms"

PRACTICAL USE

Although occasions may arise for use of the FOIA on legal matters, personnel issues, and records that relate to agency background and activities, the most common uses of the FOIA in government contracting are as follows:
  • Market Research
  • Copies of historical contracts issued by an agency as well as contractor proposals.
  • Specific articles supporting a protest action.
RESPONSE TIME

The FOIA require a 30 day response time to your request, but actual response times vary by agency and backlog.  Here is a link indicating the relative range of experiences of late:

If the agency determines the request will exceed $25 in costs, you should indicate in your request that you will be willing to pays those costs to receive the data. 

MAKE YOUR REQUEST  AS SPECIFIC AS POSSIBLE

Identify the document or documents specifically by name and identifying number (s).  When requesting contracts, RFP’s, change orders and similar data, always include the contract number and be specific with regard to references to all changes.  If proposals are requested include a specific request for management, technical and cost volumes. The more detail you provide the more likely the response will supply what you wish to have.

BE PREPARED FOR GOVERNMENT REDACTING

When the government receives requests for copies of contracts, proposals and similar data that contain specific in formation pertinent to another company, they are required to contact that company and ask for identification of information the firm deems proprietary.  To the extent the firm identifies such data, expect the response you receive to have the data redacted (blanked out and unreadable). 

EXPEDITING


Among the larger agencies, especially DOD and Justice, it is rare to receive the information requested in a FOIA within 30 days.  Be prepared to expedite, by email, registered letter and by visitation if necessary, depending on the importance of the request to your business. 
 
REFUSALS

Refusals by the government can be appealed if you and your legal counsel make the judgment a given request falls outside of the following exemptions permitted the government or one of three special law enforcement record exclusions detailed at the FOIA web site:

"Exemption 1: Information that is classified to protect national security.  The material must be properly classified under an Executive Order.

Exemption 2: Information related solely to the internal personnel rules and practices of an agency. 

Exemption 3: Information that is prohibited from disclosure by another federal law. Additional resources on the use of Exemption 3 can be found on the Department of Justice FOIA Resources page.

Exemption 4: Information that concerns business trade secrets or other confidential commercial or financial information.

Exemption 5: Information that concerns communications within or between agencies which are protected by legal privileges, that include but are not limited to:

Attorney-Work Product Privilege
Attorney-Client Privilege
Deliberative Process Privilege
Presidential Communications Privilege

Exemption 6: Information that, if disclosed, would invade another individual's personal privacy.

Exemption 7: Information compiled for law enforcement purposes if one of the following harms would occur.  Law enforcement information is exempt if it:

            7(A). Could reasonably be expected to interfere with enforcement proceedings 

            7(B). Would deprive a person of a right to a fair trial or an impartial adjudication 

            7(C). Could reasonably be expected to constitute an unwarranted invasion of personal privacy "

            7(D). Could reasonably be expected to disclose the identity of a confidential source

            7(E). Would disclose techniques and procedures for law enforcement investigations or prosecutions

            7(F). Could reasonably be expected to endanger the life or physical safety of any individual 

Exemption 8: Information that concerns the supervision of financial institutions.

Exclusions:

Congress has provided special protection in the FOIA for three narrow categories of law enforcement and national security records.  The provisions protecting those records are known as “exclusions.”  The first exclusion protects the existence of an ongoing criminal law enforcement investigation when the subject of the investigation is unaware that it is pending and disclosure could reasonably be expected to interfere with enforcement proceedings. 

The second exclusion is limited to criminal law enforcement agencies and protects the existence of informant records when the informant’s status has not been officially confirmed.  

The third exclusion is limited to the Federal Bureau of Investigation and protects the existence of foreign intelligence or counterintelligence, or international terrorism records when the existence of such records is classified.  Records falling within an exclusion are not  subject to the requirements of the FOIA.  So, when an office or agency responds to your request, it will limit its response to those records that are subject to the FOIA."

WHAT IF YOUR COMPANY DATA IS REQUESTED UNDER THE FOIA?

When notified by a contacting officer that copies of your company contract(s) and/or proposal(s) have been requested by another firm, identify to the officer  the pricing data, proprietary data and sensitive information you do not wish to have disclosed and formally indicate by letter the sections of the documents you wish redacted prior to release to another firm. The officer may or may not provide to you the name of the firm requesting the information. If you are involved in a re-compete effort for which you are the incumbent it is wise to inform the FOIA Officer of the agency involved that you expect to be notified when requests are made for copies of your information.  

SUMMARY

We suggest you study the FOIA site and the agency(s) you target for information.  Be specific in your requests and be prepared to expedite them. The FOIA can be a valuable tool for your business, but it usually takes patience and practice to use it effectively.



Monday, May 11, 2020

Your Free Small Business Federal Government Contracting Advisory Service


This site is dedicated to Small Businesses who wish to succeed in Federal Government Contracting. 

There are over 100 agencies or "Departments" in the federal government. Each of these agencies has a statutory obligation to contract from small business for over 20% of everything it buys. Contracting officers must file reports annually demonstrating they have fulfilled this requirement. Not fulfilling the requirement can put agency annual funding in jeopardy. You have a motivated customer in federal government contracting officers and buyers.

Large business, under federal procurement law, must prepare and submit annual "Small Business Contracting Plans" for approval by the local Defense Contract Management Area Office (DCMAO) nearest their headquarters. These plans must include auditable statistics regarding the previous 12 month period in terms of contracting to small businesses and the goals forecast for the next year. 

The federal government can legally terminate a contract in a large business for not meeting small business contracting goals. Approved small business plans must accompany large business contract proposals submitted to federal government agencies. Small businesses have motivated customers in large business subcontract managers, administrators and buyers.

This site provides practical, no cost, “How to" guidance on the following:

1. Understanding the federal government contracting environment and small business set-aside opportunities

2. Registering a small business as a supplier with the federal government

3. Marketing to the federal government

4. Understanding the requirements of the Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS)

5. Teaming with other small businesses

6. Achieving a General Services Administration (GSA) Schedule

7. Subcontracting to prime contractors on federal government contracts

8. Preparing competitive proposals

9. Negotiating federal contracts with government agencies, prime contractors and subcontractors

10. Managing government contracts

Saturday, May 9, 2020

A Thank You and 4 Gifts from Ken Larson


PLEASE CLICK ON IMAGE TO ENLARGE
USE "BOX" IN RIGHT MARGIN TO DOWNLOAD YOUR COPIES


With well over a decade in volunteer small business consulting, I appreciate the many individuals who have contacted me for advice. 

You have come from many venues through the Micro Mentor and SCORE Foundations, Linked In and other social media sites.  It has been a pleasure serving small business. 

My work with you has kept me active in retirement, in touch with my profession and engaged in a continuous learning mode.

Please feel free to download any of the 4 free books available here. Although originally written some time ago, these Adobe downloads contain live links to the latest versions and continual updates of any given article. 


My best wishes for success to you in your small business enterpises. 

Ken Larson




Tuesday, May 5, 2020

Maximizing Free Social Media Utilities to Promote Your Small Business







Utilize social media to promote your small business. The process requires a front-end loaded investment in time, but it is well worth the effort when using free or very low cost utilities on the Internet. The return may surprise you.

Set up a Google or Word Press blog as an extension of your web site.  A blog is quite different from a web site. Provide good, solid information free of charge and use blog searches for synergistic businesses to team with. Teaming is an absolute necessity these days. 

SmallBusiness Teaming 

Be prepared to provide information, samples and valuable service gratis as a marketing tool. Introduce yourself and then immediately engage the client or potential teaming partner with your presentation tools available to bring your expertise to whatever topic they are interested in. 

Let them take you where they want to go with their concerns and their needs. Apply your presentation tools and expertise dynamically The idea is to refer clients to article links at your web site and your blog to avoid having to repeat yourself over and over in new business marketing, thereby keeping yourself available for specific inquiries and closing deals. 

Link everything together and begin answering questions as well as registering at many of the free applications for networking web sites on the Internet to see how that can benefit your product and services. Utilities like Twitter, Alignable, Pinterest and About Me will serve your site well. 

You may wish to consider Google Ad Sense for cash flow.  It is free and could supplement your income with ads in the margin of your blog. 

Integrating and networking platforms together is the best approach. Most of the free applications of the type discussed here have profile features to link back to your blog and many will automatically publish your content on their site, once linked. 

Content is king and the queen is a hub of strong useful information with spokes emanating from it like those of a wheel to many free social networking platforms where your brand, your consistency and your offerings drive the engine that is your enterprise.

Please see the below link for an example of how the above principles have achieved. 

Integrated Utilities Linked as a Composite on "About Me" 


Saturday, May 2, 2020

Is Federal Government System Engineering and Technical Assistance (SETA) Contracting for You?




INTRODUCTION

The commercial, start up or growing entrepreneur may have specialized skills, products and services that could be marketable to the government but a window of opportunity or an entrance niche is sometimes difficult to locate in the very large and competitive federal contracting venue.

System Engineering and Technical Assistance (SETA) contracting may provide an avenue for the small business in gaining the momentum necessary for building a government contracting past performance record. It does not require an off-the-shelf product or capital intensive facilities.

SETA contracting is often utilized by the government to enhance agency statistics requiring firms that hold small business designations and who can offer quality services in support of the internal agency facilities or operations.

DEFINITIONS

FAR Sub-part 37.2 defines advisory and assistance services and provides that the use of such services is a legitimate way to improve the prospects for program or systems success:

FAR 16.505(c) provides that the ordering period of an advisory and assistance services task order contract, including all options or modifications, may not exceed five years unless a longer period is specifically authorized in a law that is applicable to such a contract:


DFARS Part 237.2 provides very important information applicable to advisory and assistance contracts:

The contracting officer and requiring activity must also be aware of FAR Subpart 9.5 when considering the potential for organizational and consultant conflicts of interest:


THE NATURE OF THE WORK 

Typical SETA efforts may involve long term contracts to perform acquisition assistance, project management, price or program analysis, independent estimates, administrative support, computer and data base operations, technical and security services, facilities maintenance functions or similar tasks. The typical SETA contractor rarely interacts with other government contractors and if interaction occurs it is only with other SETA contractors and subcontractors performing in similar roles at the same agency or in the presence of a government contracting officer/authorized representative. They are generally behind the scenes and cannot directly represent the US Government. 

SETA contracting requires skilled management and labor resources capable of performing a scope of work for which the government has identified a need and for which outsourcing to an industry contractor has been selected as the means to fulfill that need. The venue demands strong human resources management and an enhanced business system to price, account and bill on a job cost basis under government service contracts.

INCUMBENT WORK FORCES

SETA contractors often target incumbent work forces where an agency plans to offer a small business the opportunity to assume an existing services program formerly run by a larger firm or a small business that has grown beyond the size limit designated for the procurement.

In these instances the winner will have solid plans for recruiting and retaining the existing work force executing a transition plan and insuring that the government does not encounter an interruption in services.

Contingent hire agreements and sophisticated human resources processes are necessary to position the company during the proposal effort and as the contract proceeds. Contingent personnel are well aware of their market value among the SETA contractors competing for the work.

MARKETING APPROACH

As budgets become tighter, the government agencies will be looking for solid performance at the lowest possible price, stability in performance and contractors adept at learning government processes and systems as well as working with the agency to improve them.
Find opportunities well in advance of their being formally solicited on FEDBIZOPPS. Look for existing services and support contracts in their last year or self-market a services contract to an agency whose mission requires your expertise.

Propose and price to win using the following guidance:


UNDERSTAND ORGANIZATION CONFLICT OF INTEREST (OCI) RESTRICTION

If you are considering becoming a SETA contractor, determine what portion of the market in your industry will be unavailable to you in that role with the agency to whom you contract. As a SETA contractor you will not be allowed to compete for the programs being procured by the agency other than the SETA support contacts. You knowledge of the inside workings of the government agency would be a conflict of interest in bidding other projects.
You should target for SETA exploration only those agencies to which you do not intend to market other services.

SUMMARY

Consider SETA contracting if your marketing plan contains elements of support and assistance that an agency may be willing to outsource. If you hold small business designations, seek marketing opportunities to foster government set aside procurements for the designations you hold and understand that SETA contract will be the only programs you will hold with that agency due to OCI restrictions.