This proposal seeks to bring uniformity to procurement thresholds following the increase of the micro-purchase threshold from $3,000 to $10,000 in the NDAA for FY 2018.
A procurement threshold is the lowest level at which you can award a contract as a sole source to one particular company rather than opening it up for competition. This applies when a job is so small that trying to find enough companies to compete for the work would be too costly for the government.
So this new proposal increases that threshold to also apply to multiple-award contracts, not just single. What this means is if I, as a federal contractor, already have a multiple award IDIQ contract with a government agency, they can issue these micro-purchase orders without competition, as long as they do not exceed $10,000 in value. This makes it more fair to all contractors whether they’re in single or multiple award contracts.
There’s always a risk that the contracting officers will break the jobs up into smaller increments, particularly in DoD where the micro-threshold level is higher. That we will see only with practice, as it were.
At TAPE we’re always interested in more opportunities for sole sourcing, because that allows a customer relationship to flourish. Hopefully this proposal will have that effect.
We’ve been discussing the Office of Management and Budget (OMB)’s six proposals for streamlining the acquisition process and improving the acquisition environment, intended to be included in the FY 2020 National Defense Authorization Act (NDAA).
Proposal 3 is about uniformity in procurement thresholds. So right now purchases starting at $2 million must adhere to cost accounting standards (CAS), but complete coverage doesn’t start until you’re at $50 million. This change will eliminate these wide differences by raising the basic threshold to $15 million.
That means you will only need to start paying attention to CAS at $15 million, and full coverage still starts at $50 million. The reason for this change is that there were already some exemptions established at various other threshold levels that caused confusion about when the basic CAS really apply.
The reason this is important for us as small businesses is that full CAS coverage is very comprehensive and has a lot of details, and it’s really hard for a small business to manage this. That’s why you don’t hit full CAS coverage until $50 million. At that point you presumably have the infrastructure in place to handle the extra requirements.
One other legalistic thing being done is that they’re decoupling the CAS thresholds from the similar thresholds in what’s called the TINA (Truth in Negotiations Act), because there’s some concern that by putting them together, issues and problems come up in both.
This is a guest post by Eileen Kent, Federal Sales Sherpa.
Many companies turn to me and say, “How do I approach my federal customer first? Should I reach out via email, phone, text, proposal, networking event, unsolicited proposal, small business liaison, industry days or pre-proposal meeting?”
My answer is always: “It depends on the time of year, the client you’re calling, the service or product you offer, whether or not they have a bid posted on the public bid sites for what you do, and their willingness to even hear what you have to say because they might already have a long-term relationship with someone else.”
But for now, let’s consider starting by writing a compelling email that might just capture their attention. First of all, writing an email personalized to the reader and their professional role is critical. If it’s “canned” they’re going to throw it into the junk mail and block your emails.
You need to make it personal showing them you “get” their business and you completely “get” them. Also, a rule of thumb when emailing federal customers is that you cannot put in photos or “hotlinks” (if you share a link, the whole link needs to appear for it to go through their government filters).
Start first by considering your recipient, specifically:
- Who are they?
- What is their title?
- What do you think they do all day?
- Where do they work?
- Then, write down what may slow them down, or keep them up at night?
- Think about how you can help in a pinch.
Then write a subject line and an opening paragraph that addresses the pain – and how you solve it – and offers a solution. Keep it short and sweet – use Twitter as your guide and keep it to less than 140 characters if you can!
Here are a few examples of pain-based subject lines and customers/recipients:
- Temporary, modifiable furniture delivered in 48 hours (for facility managers who need to fill a temporary need)
- Experienced union production crew available same day (for production companies who may have last minute production opportunities)
- Industrial supplies delivered to your location in two hours (for locations within 10 miles of you who may need quick ordering and delivery)
- Same-day crisis communications developed, written and deployed (for communications executives who may need another perspective on how to handle a crisis and communicate to the public)
- Writing a pain-based email requires: knowing your customer, proposing a unique cure and offering a call-to-action. Need help? xxx-xxx-xxxx. (for federal contractors looking to connect with government buyers)
A personalized, pain-based series of email subject lines followed up with solutions in the first 140 characters of your message could get your clients to call you faster. If you follow up with additional supportive emails and voicemails the client will eventually learn all the problems you solve, even if they don’t answer the phone, and they’ll
call you when they finally can’t stand the pain any longer and they need your expertise.
Establishing your company as the expert problem-solver before they even return your call sets your sales team and subject matter experts up for success – and an easier sales cycle. Just like someone seeing a doctor and then being sent to a specialist, your client (the patient in pain) is ready for a cure and ready to tell you everything.
Always remember: Customers, yes including federal customers, buy from companies they know, trust and love.
Eileen Kent is known as the Federal Sales Sherpa. She helps companies with her “Three-Step Program” and her elite “Sherpa for a Year” coaching program. For more information contact Eileen today.
Gosh, it seems like yesterday that the Mid-Tier Advocacy group held their Business Focused Breakfast around the legislative update with some regulatory issues thrown in (but it’s already almost time for the next one).
Our speaker on July 30th was Pam Mazza of Piliero Mazza – true experts in this legal and regulatory thicket we all have to plow through as GovCons…
We talked about the new Small Business Runway Extension Act, passed in December 2018. It turns out that the legislation had some flaws in it, so instead of new regulations flying for the 5-year average replacing the old 3-year average, they’re working on some adjustments.
It was somewhat over my head, to be sure, but it hinges on whether SBA was actually authorized, and Administrator vs. Administration. OK, I’m not kidding. However, it did pass bi-partisanly, so these changes should get made fairly quickly. Of course some places are implementing it, and I can hear the protests rumbling. My advice is to ask the question, do not assume.
Second was the SBA’s preliminary rule on inflationary adjustments to the size standards. By the way, a 10% rise from 27.5 million is going to 30 million, not to 30.25 million, because I guess bureaucrats like round numbers. These adjustments will take effect in August, but then you’ll have to be sure SAM Reps and Certs catches up, so things might take a while for these changes to actually change your size status. FYI, this is NOT the “re-evaluation” of Sector 54 and 236 still to come, someday…
There’s a bipartisan bill circulating to extend 8a sole sourcing to SDVOSB, HubZone, and WOSB/EDWOSB, and to raise the thresholds – these have not been adjusted in decades. The thicket of rule-of-2 rules and regulations for non-8a sole sourcing has got to be made easier, so we’ll see if this gains traction.
DoD issued a class deviation letter, allowing similarly situated entities on all DoD contracts.
DoD also issued a letter limiting LPTA contract evaluation types, but beware of “fake best value” where they have fewer factors and call it best value when price is really the issue.
Finally, SBA is looking at working some early termination graduation for 8a’s – more will be revealed.
And that’s the news report… These breakfasts are often a good place to hear and discuss the real issues, so if you can, attend them in your area wherever that may be. The next Mid-Tier Advocacy Business Focused Breakfast is on Tuesday, August 27th at the Tower Club in Vienna, VA, featuring SBA Associate Administrator Mr. Robb Wong. Learn more and get your tickets now.
This is a guest post by Staci L. Redmon, President and CEO of Strategy and Management Services, Inc. (SAMS).
Sometimes it’s said that Amazon is the only truly modern organization. Because it was founded on the Internet and never had the traditional limitations of a brick-and-mortar business, it could afford to develop and fully embrace technological innovation when it came.
Most of us aren’t Amazon. There are limitations on how much contractors can adapt to technology or use it effectively – and that’s okay. But as federal IT spend increases, businesses in the public sector are called upon to take stock of their organizational structure, highlighting areas where innovation and better planning can make a difference.
Here are five of the most common struggles we have identified in our clients:
1. Too much data, not enough insight
Today, organizations are swamped in data from multiple sources, including IoT, CRM, web analytics, social media and more. 73% polled say they struggle to use it effectively.
Why it hurts
In the first place, contractors are paying for everything they collect, and they’re paying even more to store it. Second – even if they forego collection altogether – they miss out on the many insights that data can provide.
How to fix it
Using data effectively requires two steps:Efficient collection and storage, such as cloud, hybrid cloud
- Efficient collection and storage, such as cloud, hybrid cloud or data lakes
- An analytics strategy to extract useful information
An analytics strategy to extract useful information
The best data strategy will vary from business to business, requiring human expertise for optimization and refinement.
2. Deprecated systems
We know that technology changes at the speed of light. When organizations get used to a certain workflow, they often stop moving forward and systems become outdated. As a result, some U.S agencies are still depending on Windows 3.1 and floppy disks.
Why it hurts
80% of IT professionals say that outdated tech holds them back. Customers and clients will move forward even when a business does not, thereby slowing down operations, creating customer experience (CX) issues, and lowering productivity in the workplace.
How to fix it
Systems must be updated on a periodic basis to prevent disruption, ensure continuity of operations, and lower expense. Having an enterprise IT strategy and C-level tech officers ahead of time will significantly reduce blind spots.
3. Technical debt
When contractors fail to adopt new technologies, they accumulate “technical debt,” an abstract measure of the expenses they will inevitably have to pay as a result.
Why it hurts
While a business lags behind, it exponentially loses ground in terms of potential profit; it also loses market share to competitors who modernize in the same time frame. Technical debt is thus more costly than an initial investment in new technology.
How to fix it
Organizations must stay ahead of technical trends to avoid debt and minimize future expenses. However, that does not mean they should invest in every new trend – research, strategy and careful observation should inform all business transformation efforts.
4. Underutilized assets
Contractors are often unaware how much they can accomplish with a single solution; both software and hardware are underutilized, and features go ignored.
Why it hurts
Underutilization leads to redundant costs, as businesses invest in multiple solutions which they could consolidate into one. Given power, training and licensing fees, the costs add up quickly.
How to fix it
Ideally, organizations will choose optimized solutions during the Enterprise Architectural Planning (EAP) phase which won’t call for redundant investments. Afterwards, they should consult with their vendors carefully to assess the extensible functionality of every asset they acquire.
5. Lack of expertise
According to a recent Gartner press release, talent shortage is emerging as the top risk for organizations in several categories – among them, cloud computing, data protection and cybersec.
Why it hurts
The majority of technological pain points result from a lack of technical executives or experts, leaving organizations vulnerable to their own mistakes, questionable investment decisions and attacks from the outside.
This issue is especially serious for government contractors who are often responsible for managing confidential data: regulations and auditing add an extra layer of risk for any careless decisions.
How to fix it
An organization should make sure that experts are involved in all the decisions it makes by:
- Hiring and retaining elite talent in every major area of their infrastructure
- Positioning one or more C-Level executives (CIO, CTO, CISO, etc.) to oversee continual development
- When all else fails, consulting with external experts for guidance and an outsider’s perspective
For peace of mind in an organization’s continual stability, nothing can rival regular assessments from those who know what they’re doing.
Planning for Longevity
In 2019, technology is the lifeblood of a business: it shapes client interactions, management, teamwork and productivity across the board. But while it may come with upfront costs, it pays in longevity and success for the long term.
As technology changes, a business must be prepared to change with it, and that means – among other things – enterprise-level planning, good investment strategy, and a dynamic organizational structure. Staying modern is hard, but not impossible for a contractor who always aims at improvement.
Staci L. Redmon is President and CEO of Strategy and Management Services, Inc. (SAMS), an award-winning and leading provider of innovative operations, management and technology solutions in a variety of public and private sector industries and markets. SAMS is based in Springfield, VA.
The Office of Management and Budget (OMB) has proposed six ways to help streamline the acquisition process and improve the acquisition environment, intended to be included in the FY 2020 National Defense Authorization Act (NDAA).
The second proposal is to do away with the Defense Cost Accounting Standard Board (CASB). The issue here is that there is a Defense CASB, and there’s a federal one as well. The result is, unfortunately, is that the two different sets of cost accounting standards created can often be, well, different. So what this OMB initiative is going to try and do is eliminate the Defense CASB and consolidate everything into this one place under the federal board.
Of course, not everyone is going to be happy about this. There will be differences between the standards, and things from the Defense CASB that somebody’s been taking advantage of and doesn’t want to give up, or conversely, anything changed from the Federal CASB will have proponents and systems that cater to that function. We’ll have to figure out what those things are. Reconciling these two will be a nightmare, but it’s always better to have one rather than two things carrying out the same function.
And don’t forget that there are computer systems that handle acquisition and contract issues and cost accounting, and those will need to be adjusted.
What this demonstrates is that nothing in contracting and acquisition is ever as simple as “just do this.” So much of our regulated activity gets caught up in the very regulations being implemented; it’s never simple to change.
But, we’ll keep working on it…
Mid-Tier Advocacy, Inc. presents the next Business Focused Breakfast on July 30, 2019 from 7:00-9:00 a.m. at the Tower Club – Tysons Corner, 8000 Towers Crescent Drive, Suite 1700, Vienna, Va.
Topic: “Beyond the Size Standards” – SBA to Increase Size Standards with Inflationary Adjustment
Featured Guest Speaker: Ms. Pamela Mazza, Managing Partner, PilieroMazza PLLC.
This is a guest post by Jonathan T. Williams and David T. Shafer of PilieroMazza PLLC.
The California Consumer Privacy Act (“CCPA”) will go into effect on January 1, 2020. Similar to the European Union’s General Data Protection Regulation (“GDPR”), CCPA creates significant compliance challenges for government contractors and commercial businesses doing business in California, with several states following suit. Under CCPA, fines from the Attorney General for businesses that do not comply could be as high as $7,500 per violation, with CCPA also granting consumers the right to bring private action, exposing companies to actual and statutory damages.
Preparing for CCPA
To prepare for CCPA’s January 1, 2020 effective date, first determine if you fall within CCPA’s compliance criteria. Critically, the statutorily defined terms “consumer” and “personal information” are far broader than most statutes and regulations. The enlargement of these terms causes CCPA’s jurisdiction to be larger than it appears on the face of the statute. Below are certain high-level questions that can help a business determine if it meets certain threshold standards:
- Do you, or any of your subsidiaries or affiliates, engage in business in California?
- Do you do business with contacts or employees who reside in California?
- Does your business have over $25 million in annual gross revenues?
- Does your business buy, sell, or receive personal information?
If you fit certain initial criteria, we recommend identifying the type of personal information your business collects. As briefly mentioned above, CCPA broadly defines personal information as any information that directly or indirectly identifies, describes, or can be reasonably linked to a particular consumer.
Similar to GDPR, CCPA grants consumers significant rights to the use or their personal information, including general notice rights. It is here that companies can take proactive steps to prepare for CCPA’s implementation. More specifically, CCPA grants consumers the right to know what personal information a business collects, sells, or discloses about them. Additionally, several sections of CCPA require businesses to make affirmative disclosures to consumers by way of privacy policies and other notices.
In addition to the various privacy policies that are required under CCPA, other reasonable steps include conducting regular training programs for employees, crafting tailored intellectual property rights contracts, and instituting third-party commercial contracts to ensure that CCPA’s requirements are adhered to.
Looking to the future
CCPA was originally drafted as a ballot initiative before being transitioned into a statute in a relatively short timeframe. Because of this, CCPA has already been through a series of amendments, with many more amendments still before the California legislature.
More and more states are slated to follow California’s lead, including Hawaii, Maryland, Massachusetts, Mississippi, Nevada, North Dakota, New Mexico, New York, Rhode Island, and Washington. If these states decide to enact similar legislation, it will have a far-reaching effect on government contractors and commercial businesses that conduct business in those regions. In light of GDPR, CCPA, and these recent developments, the possibility of federal legislation being enacted is high. Businesses should prepare now to preempt the potential impact.
Attorneys in PilieroMazza’s Cybersecurity & Data Privacy Group are well-versed in this area of the law, and will continue to monitor CCPA developments, as well as the litany of other states that are in various stages of implementing additional privacy statutes and regulations. For more information concerning CCPA, click here to contact them directly.
This blog post originally appeared on the PilieroMazza blog at https://www.pilieromazza.com/impact-of-california-consumer-privacy-act-on-government-contractors-and-commercial-businesses and was reprinted with permission.
The fundamental problem with acquisitions is that they take too long, by whatever standards people may be applying. The Office of Management and Budget (OMB), who oversees the performance of federal agencies, has proposed six ways to help streamline the acquisition process and improve the acquisition environment – changes they intend to be part of the FY 2020 National Defense Authorization Act (NDAA).
In a series of posts, we’ll look at each of these six proposals. First up, is to establish acquisition test programs.
You may remember our discussion about other attempts to streamline acquisitions through other transactional authorities and consortia. What the OMB is saying here is let’s set up some innovation in procurement and acquisition and allow individual agencies to test stuff out and cultivate the kind of innovation you might see in Silicone Valley and other high-tech areas.
Someone will still need to approve you to try out your idea, but then you can do so even if it’s not entirely in compliance with the FAR. The idea is to test stuff out, see whether it works, and then that would result in recommendations for future actual changes.
This all fits into the concept of agile development that so many are people are into right now. One example is the Air Force Kessel Run program (for all you Star Wars fans). It’s essentially a place where they’re doing software development in small bits – what they call agile scrums – and they can literally run from requirements to testing, fielding, etc. in months rather than years.
Establishing acquisition test programs is a really good idea. It will fit within what the 809 panel was doing, and it will also fit the government’s move toward innovation.
This is a guest post by Megan C. Connor of PilieroMazza, PLLC.
On June 24, 2019, the Small Business Administration (SBA) published its long-awaited proposed rule changing the period of measurement for a receipts-based size calculation from three years to five years. This change was prompted by the Small Business Runway Extension Act (the Runway Act), which became law on December 17, 2018.
SBA was slow to implement this change because SBA believes that the Runway Act amended a section of the Small Business Act that does not apply to SBA. “Nevertheless,” SBA says, “to promote consistency government-wide on small business size standards, SBA proposes to change its own size standards to provide for a 5-year averaging period for calculating annual average receipts for all receipts-based size standards.” Smaller and larger small businesses industry wide could be impacted in terms of gaining access to government contracts. PilieroMazza will be submitting comments to the proposed rules on behalf of our small business clients before the August 23, 2019, deadline.
The proposed rule changes the references to three fiscal years to five fiscal years in 13 C.F.R. §§ 121.104 and 121.903. The proposed rule does not, however, address how contractors should calculate their size in the period between December 17, 2018, and when SBA’s rule becomes final. Presumably, SBA’s position is that contractors must use a three-year calculation until SBA issues its final rule. But this position, of course, does not address the fact that the five-year calculation became federal law in December.
SBA also does not address a transition period, for firms that are small under a three-year calculation but other-than-small under a five-year calculation. The latest version of the House of Representatives’ National Defense Authorization Act for Fiscal Year 2020 (the NDAA) is requiring SBA to implement a transition plan that would allow firms to use a three-year calculation, if such calculation renders the firm a small business, for the period beginning on December 17, 2018, and ending on the date that is six months after the date on which SBA issues final rules implementing the Runway Act. (The House is also making clear in the NDAA that, from Congress’ perspective, the Runway Act became effective on December 17, 2018.)
The deadline for submitting comments is August 23, 2019. SBA specifically seeks feedback on whether SBA should calculate annual average receipts over five years for all industries subject to receipts-based size standards or on whether it should use a five-year annual receipts average for businesses in services industries only and continue using a three-year annual average for other businesses. SBA also invites input on how the use of annual average receipts over five years instead of three years would impact both smaller small businesses and more advanced, larger small businesses in terms of getting access to federal opportunities for small businesses.
Members of PilieroMazza’s Government Contracts and Small Business Programs & Advisory Services Groups will be preparing comments to this rulemaking. If you have feedback you want them to include in their comments, visit this page for further instructions: https://www.pilieromazza.com/blog-sba-issues-proposed-rule-changing-receipts-calculation-to-5-years-implementing-small-business-runway-extension-act. This post was reprinted with permission.