Tips for Leaving your Legacy Software

Richard Marksberry presented this presentation at the PVBS monthly seminar today at the Microsoft Innovation Center in Reston. To a packed room, Rich spoke about how legacy accounting software such as from Quickbooks, Deltek and older systems are significantly hampering growth at government contractors who use them. Great things to learn in the presentation.

Legacy Accounting Software is Stunting Your Company’s Growth

New Rule Requires Contractor Disclosure of Executive Compensation

New Rule Requires Contractor Disclosure of Executive Compensation – More Transparency or More Bureaucracy?

Our friends at leading government accounting firm Goodman and Company have a pretty direct take on some of the changes The Obama Administration is taking towards a more open government and how it affects contractors, in this case  some new changes in reporting requirements that affect federal contractors. An interim rule, which took effect July 8 and will be phased in over the next nine months, amends the Federal Acquisition Regulation (FAR). The intent is to ensure that FAR complies with two federal laws mandating greater transparency in government…. Read the entire article and find out how it affects you.

Attend this Special DCAA Update Webcast

PVBS, Microsoft, and Goodman and Company will participate in a special Washington Technology webcast on Tuesday, July 27, 2010 at 11:00am Eastern / 8:00am Pacific

There are unique requirements necessary to doing business with the government. Government contractors are continually challenged by the mixed signals coming from the Defense Contract Audit Agency (DCAA). The past year has seen the implementation of new pass-fail criteria for DCAA audits, leadership changes at the DCAA, and seemingly high-turnover at the auditor level. Join us for this provocative webcast to understand tips on navigating the changes and guidance on how to prepare to ensure successful audits in the future.

DC GovCon of the Year Nominations Due June 11

Deadline for nominations for the DC GovCon of the Year Awards are June 11.

Presented by the Fairfax County Chamber of Commerce’s Greater Washington Government Contractors Council (GovCon), Professional Services Council (PSC) and Washington Technology, the 8th Annual Greater Washington Government Contractor Awards™ will be announced at an evening gala some have dubbed the “Academy Awards of government contracting.” It is a truly unique networking event which draws 900+ industry and government leaders.

Categories include:

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

Good luck!

PVBS Sponsors SECAF Event on the ARRA

PVBS is excited to sponsor the December SECAF Educational Program: “What Growing Government Contractors Need to Know about the ARRA:  A Critical Update. This will be a members-only program. Cost is $35. The event will be at the Tower Club. Program is on December 1 at 745am. Contact SECAF to register.

Here’s the event description:

The $787 billion gorilla, the American Recovery and Reinvestment Act (ARRA), has come out of the corner!  The Administration is finding out that it is easier to say “stimulus,” than it is to actually spend the money.  There are many things growing government contractors need to be aware of concerning rules and reporting requirements. These rules support the Administration’s desire to have greater “oversight and accountability” along with more “transparency.”  As a result, there are many potential complications for Federal contractors. At this education event, Rich Marksberry, an expert on the ARRA, will discuss what government contractors need to know to ensure success.

Richard Marksberry, Principal, ROM and Associates, will be the keynote speaker. Marksberry has, as the CFO, led the selection and implementation of accounting systems for three federal contractors each with sales over $100 million annually.  He was recognized as one of the “Top 10 CFO’s in Government Contracting” by ExecutiveBiz in 2008. He is an expert on government contractor financial management topics.

Expert Panel Closes MSFT Annual GovCon Summit

PVBS was pleased to sponsor the “Government Contractor Expert Panel” that closed the 3rd annual Microsoft Government Contractor Summit on November 17 at the Marriott Fairview Park. The moderator was Tom Temin of Federal News Radio 1500AM.

Panel members were:

• Kwesi Rogers President, Federal National Payables, Inc.
• Ken Bricker, Managing Partner, Goodman and Company
• Tony Bui, President, EMW

Questions posed by Tom included:

1. Discuss recent OMB guidance urging more use of fixed-price, competitive contracts instead of no-bid, or cost-plus or time-and-materials contracts. Is it actually happening at the agency task order or contract level? How should companies prepare for it? How might it effect small contractors when they are subs to larger primes? How does this affect a small firm’s ability to fund their operations?
2. Small Business Administration is proposing new rules. For instance, Hawaiian native corporations can also get unlimited sized sole contracts, not just Alaska Native. All must now perform 40% of the work, and not just sub it all out to large companies, under the proposed rules. Are SBA and other federal mandates for use of various classes of businesses striking the right balance of fairness, competition and best value for the government?
3. Discuss technology changes you see in the government–are they real and what effect will they have on small or highly specialized contractors. Examples are cloud or hosted software services; data analysis and machine readable streams; mobility devices; collaborative tools.
4. What does the acquisition workforce really look like from the standpoint of contractors? Discuss in light of the new OMB direction to increase acquisition ranks by 5% over the next five years. Have you noticed or been affected by a trend of government hiring from the private sector?
5. Discuss how you’ve used Microsoft Dynamics technology to assist in meeting the above challenges and the role business applications will help growing government contractors meet the above challenges.

The Many Complications that Will Arise from the ARRA for Government Contractors

The following article was submitted by Richard Marksberry, former Partner in the MidAtlantic practice of Tatum, LLC. During the last four years Mr. Marksberry has, as the CFO, led the selection and implementation of accounting systems for three federal contractors each with sales over $100 million annually.  He was recognized as one of the “Top 10 CFO’s in Government Contracting” by ExecutiveBiz in 2008.

The $787 billion gorilla has come out of the corner!  The Administration is finding out that it is easier to say “stimulus,” than it is to actually spend the money.  With its slow start the American Recovery and Reinvestment Act (ARRA) distributions are reminiscent of the movie Brewster’s Millions, except that the “inheritance” is a growing economy. And, although the current Administration’s desire is to cut back on government contracting, this will be one of the key ways the stimulus money will have to be spent.

The channels for this spending will be through Federal, State and local governments and will be geared toward infrastructure where possible.  This is the crux of the issue as the “rules” for the spending and its oversight will differ depending on the primary or first tier source of the funding (or the prime contract source).  The rules and reporting requirements are an “enhancement” of the Federal contracting rules under the Federal Acquisition Regulations (FAR).  These enhancements support the Administration’s desire to have greater “oversight and accountability” along with more “transparency.”  Ultimately the need to show and report results are important to the success of this effort.

As a result of these changes, there are a number of potential complications for Federal contractors. The following are some that I believe are the key ones to be prepared for during the first wave of funding:

• Extended Reporting Requirements
• Job Creation Statistics
• Focus on Buy American
• Audit Rules Extensions
• Wage Rate Specifications

 The extended reporting requirements are not very clear and are scheduled to be changed in the next quarter.  For now we know that there are two requirements to keep in mind.  The first is that if you receive funds from the ARRA you are required to report the salaries of the company’s top five wage earners.  Not a change for public or not-for-profit companies, but this is new for private companies who are not accustomed to this level of information dissemination.  Oh, and incidentally, if you are a private company with a contract initiated prior to the ARRA, and if ARRA funding is allocated to your contract in the effort to complete spending, you will find yourself in the enhanced reporting requirement for current and comparative prior years! 

The other reporting requirement, and pull out your thinking cap, is for “progress being made,” “detail” of how recovery funds are being spent, and the number of jobs “created or preserved” by the use of ARRA funds.  Systems that allow for tagging of transactional information with multiple uses will be necessary unless you want to maintain and reconcile multiple ledgers for the same transaction.  This could get complicated and hard to audit, but more on that later.  Perhaps the initial quarter reporting under ARRA will help in defining the way forward. Clarity of this kind of reporting may be yet down the road, though it is still a current requirement. 

The Buy American focus is mainly for raw materials used in construction, however, it is not altogether clear when it comes to compliance with the various international trade agreements. It appears to result in tighter restrictions at the state and local contracting level than at the Federal level.  Restrictions may vary from country to country, the type of material, and if it is a Federal, state or local project.  Due to the level of complexity here and the need to be competitive but profitable, I feel an analysis is necessary in each case before bidding the contract in question.

Audit rules have taken on a new life under the ARRA!  As soon as ARRA funding is in the mix you may expand your authoritative audit agencies by up to four or five agencies including the new “Recovery Accountability and Transparency Board.”  Additionally, the rules give new levels of access to documents, records, and personnel.  To state it plainly, when ARRA funds are used the Comptroller General and the agency inspector general are granted access to any transactional support, including the interview of contractor officers and employees related to the transaction.  The ruling applies to all contract types, not just cost plus, and extends to commercial item contracts and commercially available off-the-shelf item contracts!   And why stop there when you have a good thing going?  The extended audit rules also apply to those contracts that are at or below the simplified acquisition threshold, which was originally established by the Federal Acquisition Streamlining Act (FASA) to help level the playing field for small government contractors.

In relation to wage rates the Act specifies that the use of prevailing wage rates specified by the U.S. Department of Labor. Many construction contractors are familiar with this “contract requirement”, however under ARRA there are additional considerations for the proper level of spending for services contracted for by the government as it applies to all requisite labor types.  This may add complications of varying wage rates when an employee works on multiple contracts, and only some are ARRA funded. Again we see the need for sophisticated accounting and payroll systems for even entry level companies.

One last point is important to note.  In most federal government contracting there are “flow down rules” for requirements that must be adhered to by both the prime and subcontractors as they “flow-down” to subs.  Rule enhancements appear to apply to the prime and subcontractors in all cases.  The advantages that were often provided for small and emerging contractors do not seem to have a place in ARRA and this new need for “transparency, oversight and accountability.”

PVBS Covered by Tech Bisnow

Our friends over at Tech Bisnow snapped a shot of Paul Skurpski, VP of Sales, and Mark Lahart, Senior Account Sales Rep outside of the Grant & Thornton government contractor breakfast, where we were a top sponsor.

Recent Gartner Note on VAR Challenges and How Dynamics NAV Helps

Gartner released a note at the end of 2008 discussing the treacherous future that faces many companies that sell tech products. PVBS has helped many companies that sell products to the Federal Government such as Force3 and Four Points Technology. The Dynamics NAV solution for government contractors and resellers from PVBS is ideal for companies that provide services AND sell products to the government.

The Gartner report is titled: 122908-predicts-2009-vars-face-difficult-future and can be requested by clicking here.

Holland & Knight Legal Tips Now on PVBS Web Site

William J. (Bill) Mutryn, a partner in Holland & Knight’s Northern Virginia office, and co-Leader of the firm’s national Corporate and M&A Practice Group frequent answers legal questions concerning mergers and acquisitions for our newsletter. He practices principally in the areas of mergers and acquisitions, commercial transactions, corporate governance and finance. Over the last few years, he has served as lead counsel in over 50 M&A transactions and is the President of ACG’s National Capital Chapter. He was also on the keynote panel at the Microsoft Government Contractor Summit in December. Bill’s monthly submissions can be found here.