The Pentagon’s $1 Trillion Problem

Conde Nast Portfolio.com posted an eye-popping article by Scot Paltrow this month called The Pentagon’s $1 Trillion Problem.  While the government’s financial systems might be in disarray, at least government contractors have solutions available to them to make their business flow much more smoothly.

Says the article:

Since 2004, the Pentagon has spent roughly $16 billion annually to maintain and modernize the military’s business systems, but most are as unreliable as ever—even as the surge in defense spending is creating more room for error. The basic defense budget for 2007 was $439.3 billion, up 48 percent from 2001, excluding the vast additional sums appropriated for the wars in Iraq and Afghanistan. According to federal regulators and current and former Pentagon officials, the accounting process is so obsolete and error prone that it’s virtually impossible to tell where much of this money ends up. While the department’s brass has made a few patchwork improvements, billions are still unaccounted for. The problem is so deeply rooted that, 18 years after Congress required major federal agencies to be audited, the Pentagon still can’t be. (Read a chronology of efforts to modernize the military’s financial systems.)

Nominations Due June 13 for GovCon Government Contractor Awards

Pleasant Valley Business Solutions is proud to be a silver sponsor for the 6th Annual Greater Washington Government Contractor Awards, which will be unveiled at the Awards Gala at the McLean Hilton on October 7th. The deadline to submit applications is June 13, 2008. There will be four contractor of the year awards presented to Greater Washington Government Contractors for distinguished financial and operational accomplishments, and for outstanding contributions during the past year to its employees, the government contracting industry, and the U.S. Government. Other awards will be made to significant individual achievers in the industry.

Four awards will be presented in this category, stratified by gross annual revenue using the most recent fiscal year-end revenues:

• Contractor of the Year (less than $25 million)
• Contractor of the Year ($25 million to $75 million)
• Contractor of the Year ($75 million to $300 million)
• Contractor of the Year (greater than $300 million)

http://www.govconawards.com/nomination.html

 

Numerous PVBS customers have been recipients in the past including Oberon Associates.

Some alternatives for contractors in turbulent times

(This article originally appeared in the The Government Contractors Council Report, a monthly newsletter distributed by the Northern Virginia Government Contractors Council, an initiative of the Fairfax County Chamber of Commerce, by Kevin P. DeSanto, Director, KippsDeSanto & Co. ) 

These and other headline issues are important components of any thorough strategic planning process. However, they are just a few of the many components. For the well-positioned government contractor, 2008 represents a continuation of the robust market environment for building and extracting shareholder value. The government contracting industry is one of the few sectors experiencing positive overall market dynamics. (More)

 

Government Resellers Say Dynamics NAV Fits the Bill

iGov (McLean, VA) is a management and technical services firm that specializes in helping federal agencies with their IT programs.  Established in 1996, iGov is an example of the rare government reseller that has shifted its business model from pure product sales to the services model. Today, the company offers numerous sophisticated services to its public sector customers. However, since it still offers many IT products to help round out its service offerings, it had a specific requirement for a financial management solution that covered both business lines.

 

iGov has been a Dynamics NAV user for many years and recently started taking advantage of the government contractor functionality PVBS offers in Dynamics NAV.

 

Rich Marksberry, CFO at iGov, a provider of IT products and services to the Federal Government, said, “Dynamics NAV from PVBS is a great solution for companies like ours that have substantial services practices but also need to efficiently manage its product business to support Federal Government customers.  It’s been a huge benefit to iGov to be able to manage our product sales and IT services business lines in one solution with the flexibility of Dynamics NAV, and the extensions PVBS has provided for meeting government contractor requirements”

 

Read the complete press release this quote came from.

Microsoft User Conference Right on Target

We just got back from the Microsoft Convergence 2008 conference which is the premier event for current and future Microsoft Dynamics customers.  The commitment Microsoft is making to the Dynamics product line, and Dynamics NAV in particular, will spell great things for high-growth government contractors. The customers who were at the event with us said they felt the same way.  Over 9,500 people were in attendance.

There were a few things we learned about how significant the Dynamics product line is in Microsoft’s portfolio that I’d like to share. Microsoft is investing over $1B a year in research and development on this product family. In addition to Dynamics NAV, which is the flexible ERP, project accounting and financial management solution PVBS brings to market for government contractors, the Dynamics product family also consists of basic, horizontal accounting solutions for general use such as GP (formerly Great Plains) and SL (formerly Solomon). Other Microsoft Dynamics solutions include Microsoft CRM and RMS (Retail Management System).

An AMR Research Report on “Enterprise Resource Planning (ERP) Spending” shows Microsoft Business Solutions (MBS) leading all other ERP vendors on evaluation lists for ERP software purchases.  When asked which vendors would be considered for ERP applications during the next year, surveyed companies chose MBS, Oracle, and SAP in the top three positions.

For Dynamics NAV specifically, the worldwide acceptance is staggering:

• More than 65,000 entities around the world use NAV
• There are almost 300,000 Dynamics customers worldwide and growing.
• More than 2,700 certified partners have built more than 1,500 add-on solutions (including PVBS)
• There are more than 40 localized versions and NAV is sold in more than 150 countries
• More than 1 million licensed users
• Business Solutions gets a significant internal investment with one of the Top 5 R&D budgets in Microsoft.
• With a large R&D and the interoperability with Microsoft Office, Microsoft is investing in the Dynamics product lines and focusing on the convergence of its solutions into the next generation’s solution.

Dynamics NAV is Microsoft’s fastest growing ERP and accounting solution.  These milestones show that Microsoft Dynamics NAV provides real business value to high-growth and mid-sized businesses around the globe, such as the fast growing service providers and product resellers to the Federal Government that PVBS services.

Dynamic NAV Makes Sense for Government VARs

Some of the leading companies that sell products to the Federal Government have moved to Dynamics NAV to handle all of their product sales activities and accounting needs. Companies that sell products (any type) and maintain a services business can manage both business lines from within one solution.

Here are some reasons why they are migrating away from less flexible and antiquated solutions.

Improving operational efficiencies: Companies that sell to the Government love how Dynamics NAV automates the manual effort of the quote to order process on BOTH sides of the equation: vendor (purchasing) and customer (selling). The entire vendor management process is integrated within the solution and is designed to ensure a smooth process from order processing to invoicing to payment resolution.  Plus, the solution manages contract information and ties the purchase and the sales order together so there are no reconciliation issues in the future.

Ability to provide rich analytical dashboard to measure business performance: Microsoft has built in business intelligence capabilities in Dynamics NAV which gives the user BI at the desktop. With these analytics, executives can easily access critical information such as revenue, profit and gross profit percent across various measures, such as by customer, sales rep, contract vehicle or by vendor.

One integrated solution: Everything a government contractor needs to manage their product sales AND service business lines are included in one solution. This is a huge advantage for companies that have been maintaining separate solutions for both revenue channels. This removes the need for the additional or ancillary systems hybrid companies may have in place. Everything can be done in one application now.

Integration with other systems and partners: Since Dynamics NAV is based on the MS SQL relational database, the integration possibilities are endless.  This includes integrating with other applications such as Microsoft CRM and Project, or integrating data such as catalog pricing data or electronically placing sales or purchase orders.

Search capabilities: The relational database back end of Dynamics NAV makes it easy for operators to search quickly for critical information, such as a client’s past purchase history including who purchased, when they purchased, and what they purchased.

Smart marketing: Dynamics NAV has built in CRM capabilities. Companies that better manage their contacts in the solution can use it for appropriate up selling.

Set Aside Alert Offers New MBE Directory

We’ve published numerous articles in our monthly newsletter from Set-Aside Alert over the years. It is the leading newsletter for small businesses that want to succeed as federal contractors. Their daily e-mail of set-aside opportunities tells you who to call and where to look for set-asides for your products or services. To subscribe call 800-845-8420 (301-229-5563) or visit www.setasidealert.com to learn more.

Business Research Services, Inc., the company that publishes Set-Aside Alert, also just announced  that the new 14th editions of the National Directory of Minority-Owned Business Firms and the National Directory of Woman-Owned Business Firms are now available. To order, click here.

Major Event for Resellers on March 27

PVBS, Microsoft  Mid-Atlantic, and Diamond Mind are excited to announce a new seminar for companies that sell products to the Federal Government. Learn how some of the top Value Added Resellers to the Federal Government are using Microsoft Dynamics NAV to improve operational performance and monitor key business metrics. You will also get quickly up-to-speed on new government procurement initiatives including SmartPay2, which starts December 1, 2008.

The seminar will take place at 11:30am on March 27 at the Tower Club in Tysons Corner. To register, send an email to michelle.pycior@pvbs.net or call 703.391.0977. Lunch will be served at the seminar.

This is an exclusive seminar for business owners, CEOs, COOs, CFOs, program managers, accounting and operations professionals at the fastest growing VARs and product companies in the DC Metro Area.  Microsoft Dynamics NAV is an ERP, project accounting, and financial management solution in use by over 60,000 companies around the world.  It meets the needs of fast growing VARs that have out-grown their lower-end, inadequate accounting systems such as QuickBooks or GCS Premier. It is fully DCAA compliant and is the only solution on the market that integrates product and service business lines.

When: Thursday, March 27, 2008
Where: The Tower Club, Tysons Corner, VA
Time: Registration begins at 11am. Seminar begins at 1130am.

To register, send an email to michelle.pycior@pvbs.net or call 703.391.0977.

New Rule: Tax Delinquents Could Face Debarment

This entry was submitted by Warren Corbett, Business Research Services Inc. (Bethesda, MD), publishers of Set-Aside Alert. Subscription information can be found at www.setasidealert.com.

Tax scofflaws could be suspended or debarred from federal contracting under a final rule to be issued this month.

Paul Denett, administrator of Federal Procurement Policy, said “tax delinquency” will be grounds for suspension or debarment. He testified Feb. 27 before the Government Management, Organization and Procurement Subcommittee of the House Oversight and Government Reform Committee.  Under current regulations contractors are required to report only indictments, convictions or civil court findings. A proposed rule published last year would also require reporting of delinquent taxes or unresolved tax liens over the past three years. (SAA, 4/6/07)

“The [final] rule will add conditions regarding violations of tax laws and delinquent taxes to standards of contractor responsibility, causes for debarment and suspension, and the certifications regarding debarment, suspension, proposed debarment, and other responsibility matters,” Denett said.

He testified in opposition to the Contracting and Tax Accountability Act, H.R. 4881, which would make tax delinquency a ground for debarment. He urged Congress to wait and see how the rule works before enacting legislation. The Government Accountability Office has reported that thousands of contractors owe billions of dollars in overdue taxes. (SAA, 6/24/05)

Denett said the Treasury Department collected $60 million in back taxes from contractors in 2006 by withholding portions of their contract payments. He also urged Congress to repeal legislation that would withhold 3% of payments to contractors starting in 2011, as a way to insure tax compliance. He said any withholding provision should be “more carefully targeted on delinquent contractors.” Industry groups have also called for repeal of the provision.

(Set-Aside Alert is published 25 times a year by Business Research Services, Bethesda MD. For more info, www.setasidealert.com 800-845-8420)

More detail on Contractor Code of Business Ethics and Conduct (FAR 52.203-13)

Many of our high-growth government contractor customers are aware that they are now required to prepare a Code of Business Ethics and Conduct and to implement internal controls and tthics training.  Law firm Payne Hackenbracht & Sullivan, in their Federal Construction Contracting blog, explains the ramifications in significant detail.