For Overseas Contract Closeouts, Get It In Writing

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© Maksym Dykha – Fotolia.com

The GSA has a rigorous process for closing out government contracts, which are detailed in the Federal Acquisition Regulation (FAR). In carrying out this process, acquisitions professionals will pore over written contracts with a fine tooth comb.

Now I don’t know how many of you are contracting in the overseas market, especially in what’s called OCO environments (overseas contingency operations). One of the dilemmas of this kind of contracting is that very often the circumstances are highly urgent.

Increasingly, the military is using contractors to “plug the gaps” during these OCOs. No longer do you see, as in the movies, the SeaBees and engineers come in and “build the airstrip” – what they do nowadays is contract that out to someone who does it faster, better, and according to specs, and who specializes in airstrips so knows what works and what doesn’t.

Plus of course it doesn’t hurt that the wheels of commerce (us contractors), get the work and pay our employees.

Contractors are expected to act, even if only on a contracting officer’s word. As we learned recently when working with some agencies regarding contract closeouts from the original overseas actions, you’re going to have some problems if you have no written specific authorizations for what was done during the OCO.

You MUST follow up and get it in writing.

Even when things are urgent, even when actions are done under fire, of course first off follow directions, get the job done, and listen to your customer, but then follow-up and get it in writing. Otherwise they could come back and say, “You weren’t authorized to do that, why did you spend that money?”

You can try saying, “Well, Joe the contracting officer told me to do it,” but if you don’t have it in writing you can get into serious trouble. The problem is, Joe may be gone or not accessible, or have a slightly different memory of what was asked for. Or even a really different memory, clouded by time, and by the same urgency you both experienced.


Federal Contractors, Get Ready for the New Budget

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© apinan – Fotolia.com

A federal budget was passed during the lame duck session in mid-December, meaning that with the exception of the Department of Homeland Security (who are still on continuing resolution until the end of February), everybody else now has an official budget.

Under a continuing resolution, Congress authorizes that government agencies can continue their current activities, but cannot start anything new. They can renew old stuff, create a continuing contract (so there might be re-contracting competitions), but can’t do any new stuff.

We didn’t have a budget in 2014, because with the election no one wanted to commit to a budget. So they passed a continuing resolution. In the meantime, the world has changed. There has been action on things like immigration, cyber security, and homeland security.

So now what’s going to happen is that these budgets are going to filter down to the people who have requirements, which will then become contracting actions. We can expect that probably by February or March, people will be issuing new task orders, new contracts, etc.

At this point departments are dividing up their budgets to decide who gets what. Let’s say the Department of the Army got $50, but their original budget was $55. Now they have to split up that new figure amongst all the different sub-functions within their realm. Eventually the money all gets down to the people who are ready to work.

As contractors, now is the time – right now – to talk to your customers (existing and new potential ones). Because if they’re going to get money and commit to new things, you can start laying the groundwork for how they funnel that money.

As it always comes back to in our discussions, success in federal contracting is about building relationships. This is the point when you have to mine those relationships. You’ve got a customer, you have a solution, and they have money – if all these criteria are met, you’re good to go.


The Most Important Moment of a Trade Show

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© artisticco – Fotolia.com

The Interservice/Industry Training, Simulation and Education Conference (I/ITSEC) is the world’s largest modeling, simulation and training conference.

TAPE exhibited again at this year’s event. It took a lot of work, but it was a fun and wonderful experience. I/ITSEC is always an interesting show and we got to see a lot of new stuff that’s going on.

Overall attendance was down, not unexpected given government travel restrictions and budgetary constraints. (The federal budget itself wasn’t approved until a couple of weeks after this event.)

It all came down to 45 minutes

For all the preparation, our results at I/ITSEC all came down to about 45 minutes, spent visiting with a very important person for the work we’re doing, and work we’re going after in the future. If we hadn’t been at the event, if we hadn’t been at the booth, that conversation would never have happened. Frankly, while not really “revenue-bearing,” it definitely made the whole exhibit and show worthwhile. It’s this kind of interaction that doesn’t really happen even in an office call – the atmosphere is much more relaxed and open to conversation.

We made other important contacts with different folks as well, and a lot of business-to-business connections.

To get the most benefit from a trade show booth, you always have to be sensitive to what is your goal. For us it was to meet a couple of VIPs in a more private setting, and we were able to do that. We invested a lot of money for those visits, but they could easily pay dividends down the road.

Trade shows are training grounds

One key thing we did at I/ITSEC, and then a week later at National Veterans Small Business Engagement, was to bring some new employees. They got to hear more experienced staff talk about what we’re trying to “sell” and to what audience, and who we think we are at our company.

It’s important for everyone in a trade show booth to hone that message, focus it, get it down on paper, and then deliver it. In a trade show environment, when somebody shows up at your booth you have no idea who they are, what they’re interested in, or even their specific function at their agency.

That means you not only have to have these core messages down, you must be able to adjust and adapt quickly them as you get into the conversation. Sometimes you have literally 20 seconds – a true elevator speech – so you just start talking and hope that you find something that clicks, because that person would just as soon move on and get someone else’s free samples.

Learn more about finding customers at trade shows.


GAO Identifies WOSB Program Flaws

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© Voyagerix – Fotolia.com

The SBA performs only “minimal oversight” of third-party certifiers for the woman-owned small business program, and thus “lacks reasonable assurance that only eligible businesses receive WOSB set-aside contracts,” says the GAO in a recent report on the WOSB Program.

The GAO report identifies numerous weaknesses in the WOSB certification system, and provides a number of recommendations to strengthen WOSB Program oversight.

The WOSB program provides two options for self-certification. First, the WOSB can use what I call “trust but verify,” by submitting a number of required documents to the WOSB Document Repository, then submitting a good faith written certification of compliance. Upon award of a WOSB set-aside contract, the documents are to be reviewed to verify eligibility. Second, the WOSB can obtain a formal certification from a SBA-approved third-party certifier. The WOSB submits its documents to the third-party certifier, which verifies (or declines to verify) eligibility. If the WOSB is certified by a third-party certifier, the certificate takes the place of many of the documents required to be submitted to the WOSB Document Repository, but the business still must self-certify for WOSB set-asides.

Four entities currently provide third-party certifications under agreements with the SBA. But according to the GAO, the SBA has failed to reasonably oversee the efforts of these WOSB third-party certifiers. The problems identified by the GAO include:

  • “SBA has not put in place formal policies to review the performance of third-party certifiers, including their compliance with a requirement to inform businesses of the no-cost, self-certification option.”
  • “The agency has not developed formal policies and procedures for reviewing required monthly reports submitted to SBA by certifiers or standardizing reporting formats for the certifiers.”
  • The SBA has not “addressed most issues raised in the [monthly] reports.”
  • “Although SBA examinations have found high rates of ineligibility among a sample of businesses that previously received set-aside contracts, SBA has not determined the causes of ineligibility or made changes to its oversight of certifications to better ensure that only eligible businesses participate in the program.”

The GAO recommends that the SBA take prompt action to “provide reasonable assurance that only eligible businesses obtain WOSB set-aside contracts.” These recommended actions include developing and implementing procedures for annual examinations of WOSBs, analyzing the reasons why high numbers of ineligible businesses have previously received WOSB contracts and taking steps to address the causes, and implementing ongoing reviews of some portion of self-certified WOSBs.  A letter from the SBA, which is attached to the GAO report, states that the SBA “generally agrees with the recommendations in the GAO report.”

Like most agencies, the SBA must work with limited resources and personnel, which can make oversight more difficult. Nevertheless, if WOSB third-party certificates are to be trusted–by WOSBs and Contracting Officers alike–it is imperative that the SBA exercise effective oversight of those third-party certifiers. Hopefully, the GAO report will lead to some positive changes.

Bill’s comments: 

There’s nobody really assigned as a Government watchdog for the WOSB program, asking, “Is this really a woman-owned company?” The 3rd party certifiers are often requiring massive documentation, not really justified by the requirements. See also, our discussions on the Center for Veterans Enterprise, the organization charged with certifying VOSBs and SDVOSBs.

A separate issue is that the GAO is still criticizing agencies for not meeting the set-aside standards – not actually using the WOSB program. That is a much more serious issue at this time, that few if any agencies met the 5% set-aside goal, even in a year like FY2013, when overall the Government did meet the 23% set-aside goal.


Acquisition Needs Realistic Program Requirements and Budgets

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© mylisa – Fotolia.com

We’ve been reviewing the four themes outlined in the bipartisan report, Defense Acquisition Reform: Where Do We Go From Here? A Compendium of Views by Leading Experts, including incentivization of the acquisition workforce, and attracting and training a qualified acquisition workforce.

Theme #3: Realism in program requirements and budgets

Requirements have always been the key to avoiding extra costs and delays. But getting good requirements up front has never been easy. And with limited budgets and limited money to spend, and certainly staffing that’s been reduced over time, it’s been a constant problem that can only get worse.

The fact that this was included as one of the key factors in acquisition reform points out the issue, but without making it easy to figure out the solution.

Ultimately, we need to balance getting better, more precise requirements against not specifying a solution that thereby constrains industry ingenuity and innovation on the other end.

We want the government to give their industry partners the opportunity to be innovative, but to also be able to specify a solution that is at least close to what the government thinks is going to be workable, and that will fit within their budgetary restraints.

Here is an example of this issue in action: The government has something they want to do, e.g., build a tank. You have a certain amount of functional activity you know the tank is supposed to do, i.e., it has to carry ammunition and troops. But then there are other questions to answer:

How fast does it need to go? How long does it need to drive for in order to get from where it starts to the battlefield, and how much does it have to do after it arrives? How many rounds of ammunition should it carry? What does its crew need to do? Can it go on roads? Does it need to have a certain center of gravity to not destroy the road? What about electronic counter-measures and safety for the crew, and armor sizing?

So you see that while conceptually what I wanted was a tank, now I’ve identified many more details. Yet I don’t necessarily want to tell the people bidding how to do everything, because I’d like some innovation and improvement to come in from their bid.

The more requirements I specify, the more I’m droning down into one constrained solution, because I’ve told people so much of what I want. The less I specify requirements, the more likely they are to have a range of solutions, but thereby a range of costs and a range of capabilities that they’re delivering against that more loose set of requirements. I might end up in a tank with a gun that shoots left, which might not be so good.

More specific requirements are also more costly to generate, because they need to be developed in precision. There’s a joke in the acquisition community about $1,000 wrenches. A wrench may only cost $12.99 at your local hardware store, but if you’ve over-specified in your requirements, the only way to build it to those specs will be with costly and foolish materials. Meanwhile, the $12.99 wrench would have been just fine. Maybe not perfect, but okay.

We have to have requirements at some level, and we have to understand that the more specific the requirements, the less diverse solutions we’re going to get.


Attracting and Training a Qualified Acquisition Workforce

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© Photographee.eu – Fotolia.com0

I’ve been taking a closer look at a recent bipartisan report about defense acquisition. Four themes emerged, including incentivization.

The second theme was about attracting and training a qualified acquisition workforce. In my summary post, I equated this to what we’ve already been discussing about the interplay between education, certification and experience.

This being a time of austerity and budget crunches, there is a tendency for contracting officers and their staff to be people who’ve risen through the ranks and learned on the job – versus having the related degrees or certifications.

Like anywhere else, when you start comparing credentials and/or education to on-the-job experience, there are going to be both equivalencies and trade-offs. However, the fact of the matter is that when you’re talking about complex procurement and acquisitions, the price of inexperience and lack of specific education is delays.

So it isn’t that you fail in an acquisition, it’s that the acquisition gets delayed. How many times have all of us, in industry and on the other side in government, had an acquisition that should have made it from draft to final in three months, but it takes six months? Or worse, the requirements are redone because there have been so many changes. These delays create a lot of costs, especially on the industry side.

Attracting a more educated, more credentialed, more experienced acquisition workforce comes with a different expense. There will be more churning and turnover as people search for more prestigious opportunities, leaving some other organization bereft of their senior staff. Then there is the financial cost of hiring in subject matter experts from industry who do have all the credentials.

Yet if you’re going to “grow your own” and promote from your own ranks, we could all be putting up with more delays, problems and mistakes along the way.

Like many of the recommendations in this report, all of these options come down to be, in essence, a double-edged sword. It’s more desirable to have a more educated, credentialed and experience acquisitions workforce, but the question is where is it coming from?

One thing you need is a larger pool of junior people. You do not want to be promoting simply in terms of longevity, but people who will be the most successful contracting officers and senior contracting officials. You can find them from industry or some other agency, but then someone somewhere has to rebuild their acquisition workforce.

I wish I had the solution for you, but like with all of these issues, there is no simple answer.


Alternative Financing: How to Maximize Your Chances of Securing an SBA Loan

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© Sergey Nivens – Fotolia.com

This is a guest post by Richard Lewis, Financial Engineering Counselors, Ltd.

Securing the financing you need to grow your small business can be a challenge. Over the past decade, banks have increased lending to big business by 36%, but over the same period, bank lending to small businesses has declined by almost 15%, and loans of less than $100,000 have dropped precipitously by more than 33%.

Fortunately, small businesses can find alternative financing sources, including a Small Business Administration (SBA) loan. There are several different types of SBA loans, including:

Be sure to check which type of loan is right for your needs before beginning the application process.

SBA loans have been around for more than 60 years. These loans, which were established to promote small business growth, typically have lower interest rates and monthly loan payments.

Unfortunately, the process of applying for an SBA loan can be complicated and it can take a long time to complete the process. Once you do, there can also be an extended period of time before you actually obtain your funding. You can speed up the approval process by observing some simple guidelines. Here are five you need to be aware of:

  1. Your credit rating counts: Good credit is important for any loan, and that includes SBA loans. Follow good credit rules, like being sure to pay your bills before the deadlines. Obviously, you’ll want to avoid credit-killing actions like foreclosures and bankruptcies.
  2. Keep your financial documents up to date and organized: This includes all of your financial and accounting documents, as well as your tax records. You might consider using some good accounting software designed for small business if you don’t already to bring greater organization to your records. Having your financial records organized and accessible will move the process along more quickly.
  3. Spell out the purpose of the loan as clearly as possible: Lenders want to know that you’re a good loan risk, and that means they’ll be interested in what you plan to do with the money. Take the time to outline this in the clearest possible fashion, whether your loan is to add vehicles to your sales fleet or expand the size of your brick and mortar store.
  4. Explain how you’ll pay back the loan: You’ll need to demonstrate that you have good cash flow. You can do this through your most recent tax records. Lenders will also want to know how much other debt you have. If the loan is for a start-up business, you should pull together a smart financial plan and include credible projections which demonstrate your ability to make your monthly payments.
  5. Be prepared to describe your history: Lenders will want to know about your finances, but they’ll also be interested in whether you personally are a good risk. That has to do with your relevant experience, how much time you’ve been in business and the degree of professional success you’ve had.

Applying for any loan, whether traditional or through alternative financing, can be confusing. The good news is that there are experienced professionals who can walk you through the process, answer your questions and maximize your chances of success through long-standing partnerships with banks, finance companies and professional service firms.

This post originally appeared on the Financial Engineering Counselors website at http://www.fecltd.net/blog/?p=102 and was reprinted with permission.

Richard Lewis is a government contractor financing consultant. You can contact him at 703-992-8988.


Incentivization in the Acquisition Process

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© Pixelbliss – Fotolia.com

A group of 31 procurement experts recently shared their thoughts about defense acquisition reform, in a report published at the Homeland Security & Governmental Affairs website.

They identified four emerging themes abut acquisition, issues which I believe expand across the board to other federal agencies.

The first theme was about the incentivization of the acquisition workforce. Basically, if we want a better acquisition process, we need to measure better things. A true statement if there ever was one.

The core concept behind this is something that goes back to the dawn of observation, and that is what you observe, what you measure, is what’s going to be paid attention to. While that seems simplistic, failure to analyze the effect of that phenomenon is what gets us into terrible trouble.

Here is a simple example of how this works: Say I have a problem with a piece of equipment, like my TV, computer or phone. I call up the help desk and tell the operator about the problem.

One of the metrics used to evaluate that operator is how long they’re on the phone with me. Three minutes, let’s say, is the standard. Any calls that are three minutes or less, great. But if my problem is more complicated to explain or solve, now I begin to screw up the metrics.

People want to help their customers, but they also want to do what it takes to show they’re doing a good job. In this case, there is a conflict between those two things. That operator is going to want to get me off the phone as close to three minutes as possible. But then I’m not going to be a happy customer.

I believe so strongly in the power of this measurement concept that I created a unique methodology for TAPE called Behavior-Based Performance Metrics Methodology (BBPMM)®. With BBPMM®, we empower our help desk operators to refer more complicated calls to technical experts. You reduce the average time involved because the expert is better equipped to deal with the problem more quickly, and the caller gets specialized help for their problem – both lead to satisfied customers.

The issue in acquisitions is that there is nothing that incentivizes an acquisition expert (contracting officer) to shut down a problem acquisition. There is no measurement for that. In fact, the only measurement is on completion of the acquisition – getting to a final signed contract.

With a complicated procurement that requires a lot of information, sometimes you need to pull back and start all over again, but then that screws up the metrics. It’s this kind of problem people are facing in defense and across the board in the procurement sector.

Here is a direct example of how this works in practice: There’s a procurement we’ve been working on for 18 months, and we had expected the RFP would come out earlier in 2014. It did not. But it’s entered into the formal process by which a draft of the final RFP will be issued.

Last week we found out that the review would happen a year later than we had been estimating. It’s obvious they’re overestimating to make sure the RFP comes in on time, so they don’t screw up their metrics. They know that more bids could come along they hadn’t accounted for, or any number of other factors that could delay the process by six months.

Understanding how the acquisition workforce responds to the metrics by which they’re measured is an issue that has to be looked at much more closely than it has up until now.


Defense Acquisition Reform – Four Emerging Themes

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© tashatuvango – Fotolia.com

U.S. Senators John McCain (R-AZ) and Carl Levin (D-MI), Ranking Member and Chairman of the Permanent Subcommittee on Investigations (PSI) recently released a bipartisan report, Defense Acquisition Reform: Where Do We Go From Here? A Compendium of Views by Leading Experts. You can download the report from the Homeland Security & Governmental Affairs website.

In the opening of the document, they summarize the sentiments of the experts – 31 current and former officials in the procurement world – and identify four themes. I believe these four themes have applicability for acquisition across the federal government.

#1 – Incentivization of the acquisition workforce

This is not about the traditional incentives that we use like giving people more money. Yes, there are opportunities for bonuses for federal employees, but this is a more subtle problem that goes back to a key principle we’ve talked about before, which is that people pay attention to the metrics by which they’re measured.

If we want a better acquisition process, we need to measure better things.

#2 Attracting and training a qualified acquisition workforce

We talked recently about the interplay between education, certification and experience, and this is the same problem. At the government they’re concerned about experience, because it translates directly into better acquisition actions and service.

On the other hand, there are places you can get education and certification in acquisition activity, including one sponsored by the Department of Defense, along with other agency programs such as the VA Acquisition Academy.

Fundamentally the biggest problem is do you want certifications, experience, and/or (and what is the trade-off) education?

In the case of an acquisition workforce, you have to be aware that you’re not likely to get, for example, an expert in jet airplanes, let alone war planes, to become your contracting officer, even though you’re going to wind up spending literally billions of dollars to create those airplanes.

#3 Realism in program requirements and budgets

I completely agree that this is a big problem across the board. All too often, the requirements are inadequately specified, which means that as soon as you actually start a project, you’re kept busy figuring out what you really need, as compared to what the RFP said you’d need. And every time you get into that kind of mode, costs expand exponentially.

#4 – The role of the service chiefs in the acquisition process

This is more of an organizational issue, pointing out that better acquisition procedure is not just a procurement problem; it is an operational problem and a procurement problem. That means the joint chiefs of staff have to be involved in the procurement process, and with improving the procurement process.

We’ll take a deeper look at some of these themes in upcoming blog posts. Stay tuned!


Employee Engagement After the Information Revolution: Did Our World Turn Upside Down?

Irit-Ron-2

Irit Oz & Ron Hirshfeld ~ Employee Engagement Experts

A little while ago I met Irit Oz and Ron Hirshfeld, two amazing folks who were in the US to bring their concept of employee engagement and the information revolution to fruition.

At my company, we are on the cusp between small, and thinking about being “not small” pretty soon now (this “launch point” is one of my passions in the small business community). We are working with a strategic planner to write the story of our business, as a pathway to bringing out our true goals as entrepreneurs and as a business.

Preserving employee and company culture is one of the hardest things about this stage of growth, which is why our strategic planner introduced us to Irit and Ron, and why I invited them to present their concepts here for your reading and reaction.

Did Our World Turn Upside Down?

A guest post by Irit Oz and Ron Hirshfeld.

Do you sometimes feel that you are holding your business intact with your bare hands? Do you set goals that seem reasonable to you and find yourself pushing your target dates or compromising on scope continuously? Do you feel sometimes that getting things done, the way you want them, is almost an impossible task? Did you ever get to a point that you’ve asked yourself, “Did our world turned upside down?”

If you have, you are not very far off. Our world did turn upside down is some way. Sounds crazy? Let’s look at the facts.

It is common knowledge that in the last 10 years we went through a revolution which most experts call “The Information Revolution.” Did you ever stop and think, how did that revolution impacted me and my business?

Revolution is a very strong word, and it is used to describe extremely impactful events. If we look at the revolutions that we had in the last few hundred years, we can understand why.

Each revolution has profoundly changed our way of living. The agriculture revolution has enabled 90% of human kind that used to work in agriculture to change profession, while the industrial revolution brought us comfort that we didn’t know before and triggered more than 50% of the population in our world to move from rural to urban areas.

For most people over 30, we probably don’t need to elaborate too much regarding the technological revolution. If we just take five minutes to think how we grew up without internet, cellphone, GPS, automatic windows, microwave, etc., we would finish these five minutes extremely grateful.

What was the impact of the revolution that we went through over the last 10 years? The Information Revolution?

One thing that most people are aware of, is that it brought us to a state where almost every knowledge that we want, we can have within seconds in the palm of our hand.

It doesn’t matter if you are a cook who is looking for a good recipe, a traveler who is searching for cheap flights, a software engineer who is looking for a particular way to implement an application, a lawyer who is searching for a specific legal case, or, God forbid, a terrorist who is looking to prepare a bomb. You can find everything you need very quickly using your computer, your tablet, or your cell phone.

That was not the situation 10 years ago. Ten years ago the teachers in school were the source of information, the managers in the organizations were the ones to teach you how to do your job, and the leaders in your country were the ones letting you know what the hell was going on.

Today, on the other hand, teenagers can learn what ever they are interested in from the comfort of their home, any employee can learn how to do their job from experts around the world, and any one of us can, very easily, check the facts that politicians are telling us.

If you look at the situations in organizations today, the information is no longer flowing from top-down. The people who are dealing with customers, production, inventory, programing, etc. are the ones holding the important knowledge.

If knowledge used to flow almost exclusively from top-down, it is now coming mostly bottom-up. This seems very trivial when we look at the facts, yet let’s take a moment to absorb this critical and astonishing concept. If the flow of information has reversed, what does it mean about the role of management? Can we keep doing the same things and succeed? As the great Albert Einstein said: “Insanity is doing the same thing over and over again and expecting different results.”

If we are no longer the source of information for our employees, how can we get them engaged? If they have the knowledge, do we know how to retrieve it from them in order to make wise and knowledgeable decisions? Did we adjust the way we conduct business to support the new reality?

If we hadn’t, wouldn’t that be a disaster? Wouldn’t that be something very noticeable, something that would possibly threaten our survival, something that would make us feel as if our world has turned upside down?

Yours Sincerely,

Irit Oz & Ron Hirshfeld
Employee Engagement Experts

OH (Irit Oz and Ron Hirshfeld) are two unique individuals with 50 years of combined experience and hundreds of success stories. They have ONE purpose: To help transform your organizational culture to support your business strategy and assure that your desires become your REALITY. Learn more at http://ozandhirshfeld.com/.


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