SMALL BUSINESS FEDERAL GOVERNMENT CONTRACTING ("Smalltofeds")
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Friday, February 7, 2025
Promoting Entrepreneurship To Create A Learning Organization
Thursday, February 6, 2025
Is Small Business SETA Contracting for You?
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.
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 The System for Award Management (SAM) . 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:
You should target for SETA exploration only those agencies to which you do not intend to market other services.
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.
Tuesday, February 4, 2025
What to Expect from Government Pre-Award Surveys and Fact Finding
When a government contracting specific market target has been identified and a proposal has been submitted, pre-award surveys and fact finding by the buying agency or the prime contractor often follow. These processes take two forms:
1. A survey visit to the small company facility
2. Inquiries with respect to supplementary details for enhancing the customer perspective on a proposal submittal.
Undertaking the above processes with a government agency differs from that of undergoing them with a prime contractor. You are not required to disclose proprietary data to a prime contractor. Please see the following articles for further information in this vital area:
Protecting Intellectual Property
This article will discuss each of the above processes and suggest measures to prepare for, conduct and succeed at pre-award surveys and fact finding.
PRE-AWARD SURVEY
A pre-award survey is a government or prime contractor visit to a supplier's facility. The Procurement Contracting Officer (PCO) or the Administrative Contracting Officer (ACO) and the Contracting Officer’s Technical Representative (COTR) as well as members of their respective staffs may attend.
In some instances the local Defense Contract Management Area Office (DCMAO) is involved. As you become a regular supplier to an agency, site survey visits will normally cease or occur only rarely.
For further explanation of the above government officials and their roles, please see the following article:
Government Contracting Customer Relations
The site survey team is interested in establishing the physical presence of a new supplier, the technical capability and the human resources to perform the prospective work and the quality of the environment in which the effort will be performed. A "Pre-award Survey of Prospective Contractor" Forms are completed and become part of the contract file:
Pre-award Survey Forms
Pre-Award Survey of Prospective Contractor SF-1403 8/1997
Pre-Award Survey of Prospective Contractor (Accounting System) SF-1408 8/1997
Pre-Award Survey of Prospective Contractor (Financial Capability) SF-1407 8/1997
Pre-Award Survey of Prospective Contractor (Production) SF-1405 8/1997
Pre-Award Survey of Prospective Contractor (Quality Assurance) SF-1406 8/1997
Pre-Award Survey of Prospective Contractor (Technical) SF-1404 8/1997
Select the person who will lead the meeting with the government survey team. This person should be empowered to speak for the company and should be completely familiar with details of the solicitation and your company's offer.
If relevant, make available one or more technicians to answer questions. Identify any disparities that may exist between the solicitation and your company's offer that should be resolved during the initial meeting with the survey team. Think about how you can demonstrate actual technical capability or the development of technical capability on the proposed contract. Make sure your facilities and equipment are available and operable. If they are not, be prepared to demonstrate that they can be developed or acquired in time to meet proposed contract requirements.
Make sure that your labor resources have the proper skills or that personnel with the needed skills can be hired expeditiously. Gather and make available to the survey team documentation, such as previous government contracts or subcontracts or commercial orders, to demonstrate a past satisfactory performance record with regard to delivery, quality and finances. Gather financial documentation for the team financial analyst, including the company's current profit and loss summary, balance sheet, cash flow chart and other pertinent financial information. Make sure the plans are in place for vendor supplies and materials or subcontracts to assure that the final delivery schedule can be met. Make sure that these plans are verifiable.
Review any technical data and publications that may be required under the proposed contract and make sure you understand them. If the contract is a type other than a firm-fixed price or if you have requested progress payments, prepare adequate accounting documentation for review. Review your quality control program and make sure that it is workable and consistent with the quality requirements stated in the contract.
PROPOSAL FACT FINDING
Fact-finding usually involves the government requesting additional information to supplement that which was submitted by you in your proposal. These areas of interest are early indications of where the negotiator is looking for weaknesses in your cost justifications or disconnects between your technical approach and the cost you are estimating to do the job. If you have subcontractors or major material suppliers, the government may ask for copies of your vendor proposal evaluations. The government may wish to examine cost history for the last time you performed similar efforts.
Keep in mind that most government agencies put together an independent cost estimate of what they feel the item or service should cost. These are commonly called "Should Cost Estimates". The additional requests for information during fact finding are feeding the should cost estimate. The Procurement Contracting Officer (PCO ) typically has an end user for the product or service internal to his organization who will become the Contracting Officer's Technical Representative (COTR) when the contract is awarded.
The COTR has a strong influence on the negotiations and will usually be present when negotiations commence. On many occasions, the COTR is the real internal customer at the agency. He has fiscal, technical and schedule responsibilities to his management for the program you are servicing. He simply cannot sign for the government.
The PCO has the agency warrant to commit the government and knows the most about public law and the Federal Acquisition Regulation (FAR) as it is applied to contracts the agency undertakes. It is the COTR who is likely feeding the PCO requests for fact-finding data. Keep in mind that the COTR and the PCO are formulating their assessment of the cost and the risk associated with the program during the fact-finding process. Cost is the first item of negotiation and risk has a direct influence on the government's position on profit.
The contacting officer may order a Defense Contract Audit Agency (DCAA) audit. The Request for Proposal (RFP) to which you responded may in fact have ordered a copy of your proposal be submitted to the DCAA Office nearest your location. If you are a new supplier to the government, DCAA may ask for a copy of your long-range plan containing your direct and indirect rate structure. They will verify the rates utilized in your proposal against your LRP, evaluate escalation factors utilized for long term projects and check the math. For guidance on these matters, please see the following article:
DCAA Audits And Small Business Job Cost Accounting Systems
The auditor will ask for copies of major material and travel quotations and insure that government per diem rates are utilized for lodging and meals in the cost proposal. DCAA may also visit your facility to check compliance with Cost Accounting Standards insuring that the company sets up each new government contract on job cost accounting in the identical manner in which it was proposed; in effect identifying direct labor, direct material and other direct costs to each contract monthly and allocating overhead and G&A utilizing the same numerator and denominator relationships upon which the contract was originally estimated.
DCAA is paid by the PCO to perform the audit. The audit does not extend to negotiations and at the audit conclusion the auditor files a report with the PCO. The report will contain information on any errors uncovered and findings on the adequacy of the accounting and long range planning systems. DCAA will not express an opinion on the cost content of the proposal in terms of a value judgment regarding prices for prospective supplies and services. If the auditor does not offer an exit interview, ask for one. Better yet, ask for a copy of the audit report to the PCO. Many DCAA offices will provide a copy to audited contractors. DCAA does not have the authority to direct a proposal revision based on audit findings. An astute contractor will immediately correct any errors found by the auditor in the proposal and examine other audit findings in preparation for negotiations.
SUMMARY
With adequate preparation and understanding of what the processes involve, the small enterprise can succeed in passing government agency or prime contractor site surveys and fact finding.
Remember that these encounters are extensions of your image as presented in your proposal. They are building block in nature and serve to establish, reinforce or change a customer’s view of your company and your proposal.
Sunday, February 2, 2025
The Difference Between A Free Lancer And A Small Business Federal Government Contractor
Friday, January 31, 2025
Meeting Government-Owned Property Management Contract Requirements
Title falls to the contractor on firm, fixed price contracts where the cost is base lined at contract award and is assumed to include all that is required to produce the end item when it was bid.
Government property must be stored separately from contractor property when not in use, identified in the facility inventory system as government owned and have government property tags.
Rent – Free Use of government property accountable under one contract must be requested on a non-interference basis from the owning contracting officer before use on another contact and the using contract must reference the approval.
The government may elect to charge rent for use of government property under commercial or foreign contracts. The process for calculating and paying rent is specified in FAR 52.245-9.
The principal FAR Clauses for government Property are 52.245-1 and 52.245-2. If you are undertaking a contract involving government property please read these FAR Clauses. Within these clauses are requirements for inventory, disposal and disposition of government property.
FAR - Government Property Clauses
Government property may be furnished by the acquiring agency with a contract award and may be placed in the care of the contractor. In those cases accountability for the items, together with associated maintenance may be assigned to the contract and reassignment of the property must occur before the contract can be closed out at completion.
Monday, January 27, 2025
A Thank You and 4 Gifts from Ken Larson at "Smalltofeds"
(Please click above image to enlarge)
Approaching two decades in volunteer small business consulting, I appreciate the many individuals who have contacted me for advice. You have come from several venues – through the Micro Mentor and SCORE Foundations, LinkedIn 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 pictured here, as well as other useful information at the BOX in the right margin of https://www.smalltofeds.com . You may also download the books free of charge from: https://smalltofeds.academia.edu/KenLarson
Although originally written some time ago, the small business contracting books contain live links in the Adobe text to updates for any given topic at the “Small To Feds” Blog. The books have been written at the request of my clients to cover topics in the order small business generally encounters them in government contracting.
My best wishes for success to you in your small business enterprises.