As your small business grows, your needs and regulatory requirements change. You have to have approved forward pricing rates and go through audits. These are things that may be best suited to be led by a controller working directly with your organization, rather than an external bookkeeper or accountant.
How to hire a controller
The first thing you need to determine before hiring a controller is which functions you actually want or need out of the position. Bookkeeping, accounts payable, accounts receivable, payroll, audit preparation, government rates submissions, pricing efforts…the list goes on.
You need to also consider the level of experience and the systems they are expected to know and understand. Are you doing a conversion from an older system to something like Deltek Costpoint? If so, you may need someone with that requisite experience, and that experience does come with a price tag attached.
Are they the lone ranger in their section or will they be managing staff, leading a team made up of payroll and AP personnel or even a junior bookkeeper?
How much experience does the controller need to have in your specific industry?
This is a tricky question in our GovCon industry. There are many requirements of us that the typical controller for a commercially-focused company may not know about or understand. Pricing and your direct/indirect rate structures are critical to your success and you want someone very familiar with these aspects.
What are important qualities to look for in a controller?
- CPA designation
- Trustworthiness – After all, these folks will have access to all your organization’s financial accounts and data
- Length of time at previous organizations – This is important because it takes some time for a controller to get acquainted with your organization and ways of doing business. You don’t want to get them up to speed and then have them leave quickly – likely to a competitor – with knowledge of your rates and practices. NDAs are needed but remember the NDA doesn’t erase their memory.
To find controller candidates, look to your network or colleagues, friends, and industry organizations, as well as previous controllers or accounting staff; also consider third-party sites, recruiters, and LinkedIn.
Here at TAPE we’ve just gone through the process of hiring our own new controller. We found the most important thing to do is to really define what you want before going out to look to fill a position. It’s also important to form a comfort level with that candidate. They will know all things financial about your organization. You have to be comfortable with that, and with them.
While many federal agencies have already increased the thresholds for micro-purchase and simplified acquisition via deviations, the FAR has officially been updated as well. Effective August 31, 2020, the FAR has solidified the following thresholds:
- $10K for micro-purchase (previously $3,500)
- $250K for simplified acquisition threshold (previously $150K)
The increase to the simplified acquisition threshold should help small businesses, and here’s how: Purchases above the micro-purchase threshold, but not over the simplified acquisition threshold, shall be set aside for small business if two or more small firms are expected to compete. See FAR 19.502-2.
How can you leverage this rule to your advantage?
Micro-purchases or simplified acquisition threshold are ways in which smaller dollar amount contracts can be accomplished without any competition. These situations are perfect for new, emerging small businesses.
Opportunities exceeding these limits have to go according to the regular FAR guidelines and do a regular acquisition (competition), unless you can do something with a set-aside that gives you a sole source. Government requirements falling within these dollar value limits can even be awarded to large businesses.
There are some rules and regulations that must be considered, for example, you can’t do 10K a hundred times to support a $1,000,000 requirement but you can do 10K and even some renewals, etc.
Fundamentally this applies to something small, e.g., you’re going to send a couple employees in for a week of analysis and they can give you a sole source for $10,000 to do that easily.
For larger but still small increments up to $250K, there is a SAP (simplified acquisition procedure) FAR 19.502-2 explanation. That work that might only be a small amount to most big contracts, but it’s a way to get your foot in the door and get started, and you can do that on a sole source basis under the simplified acquisition rules.
So certainly anyone who’s starting out, this is a way to get business directly for yourself. You have to go look at the rules and understand them, but the point is you can get a $10K purchase order directly, straight up, no competition, and these $250K ones with certain rules and regulations, and under certain conditions.
Section 874 of NDAA 2020, Post-Award Explanations for Unsuccessful Offerors for Certain Contracts, “requires the FAR to be revised within 180 days to require that contracting officers provide a brief explanation of award, upon written request from an unsuccessful offeror, for task order or delivery order awards in an amount greater than the simplified acquisition threshold and less than or equal to $5.5 million issued under an indefinite delivery-indefinite quantity contract. Currently, offerors are only entitled to a debriefing after award of an order exceeding $5.5 million.” – Megan Connor, PilieroMazza
So what does this mean for us? Here’s what makes this important. Last year in the FAR rules, a detailed debrief of your losing proposal had to be made only if total value of the award exceeded $5.5 million.
If it was less than $5.5 million, under those old rules, you weren’t entitled to anything. They literally didn’t have to even give you the time of day. All they’d tell you is that XXX company won, not you. No explanation of what you did wrong or right. Hopefully you have all taken advantage of this rule change on every source selection this past year. If not, I suggest you add the request for a debrief into your standard process when an award notification (win or loss) is made.
The revised rule states anything above the simplified acquisition threshold from $250K to $5.5 million now may provide you a brief explanation of award. You do have to request this and you should ALWAYS ask for it immediately after you receive the notice.
The result is usually just a paragraph or two. It might be something like, “the offeror’s proposal was judged acceptable but not more than acceptable,” or it could say, “we awarded it to the lowest bidder.”
This rule means you will get more explanatory results from your IDIQ task order bids and useful information for that next proposal. I hope you have taken advantage of this.
FAR Council Issues New Interim Rule on Section 889 – Prohibitions on Using Chinese Telecommunications and Video Surveillance EquipmentPosted: December 2, 2020
This is a guest post by Isaias “Cy” Alba, IV of PilieroMazza, PLLC.
Note from John: Seems like the list of action items for us small business folks is forever growing. With CMMC looming and now this requirement in place we must make sure we are ever vigilant to protect ourselves and our most important clients. This one requires the annual SAM reps and certs BUT also requires we conduct these repeated, reasonable inquiries throughout the contract performance. This one may not be so onerous…especially after the initial review of assets and services.
If you have not viewed PilieroMazza’s prior client alert and webinar on the implications of the new prohibition on the use of certain Chinese telecommunications and video surveillance equipment, we highly recommend you do so before reading this article as it will provide helpful background and information which we will not rehash in this article. You can find that content here and here, respectively.
The FAR Council released a new interim rule, effective October 26, 2020, allowing federal contractors who already certified in SAM, pursuant to the new FAR 52.204-26, that they “do not” use the prohibited equipment or services to update that certification only once a year instead of in conjunction with every proposal or bid pursuant to FAR 52.204-24(d)(2). Pursuant to this interim rule, FAR 52.204-26(c)(2) adds the following representation, which will be included in all contractor’s SAM representations and certifications:
After conducting a reasonable inquiry for purposes of this representation, the offeror represents that it [ ] does, [ ] does not use covered telecommunications equipment or services, or any equipment, system, or service that uses covered telecommunications equipment or services.
While the FAR Council has billed this as a change to ease the administrative burden of having to conduct repeated “reasonable inquiries” prior to certifications on each bid or proposal, this rule does NOT change the ongoing reporting requirements during contract performance which are, arguably, the most onerous part of the new Section 889 compliance regime.
Specifically, clients are already asking me about how this impacts the reviewing and reporting requirements of FAR 52.204-25, and whether this is still required if they take advantage of the new FAR 52.204-26 annual reporting. Unfortunately, the answer is “YES,” the constant monitoring and reporting during all federal contracts required under FAR 52.204-25(d) still applies.
This means that even if a contractor has made the new FAR 52.204-26 certification in SAM, they still have to closely monitor the performance of themselves, employees, and subcontractors to ensure that none of the prohibited equipment or services are used or delivered on any federal contracts. If such use or delivery is found, the one-day required disclosure and the ten-day follow-up disclosures still apply in full force.
Thus, while this new interim rule is helpful to ease the burden of having to perform a “reasonable inquiry” prior to every bid or proposal, it does not alleviate the eternal vigilance that all federal contractors must now undertake to comply with the full application of Section 889 of the 2019 NDAA.
This post originally appeared as a PilieroMazza Client Alert at https://www.pilieromazza.com/far-council-issues-new-interim-rule-on-section-889-prohibitions-on-using-chinese-telecommunications-and-video-surveillance-equipment/ and was reprinted with permission.
The cost of submitting a proposal to the government for a small business is huge, especially when you consider all the people who are involved in developing a proposal. There are proposal managers, tech writers, proposal coordinators, subject matter experts, pricing support, contracts managers – all these people play a part in doing proposal support.
So depending on your company, in terms of its size, your resources, your existing employees, your existing contracts, you may or may not have those subject matter experts and proposal professionals on hand – someone who can “shred” a proposal, meaning they take all the requirements the government has put in the solicitation or RFP, and put them in a document that will be the outline for your submission back to the government.
In the case where you do not have all these resources at the ready, and you’re without the staff members with the expertise necessary to submit a proposal, you have a decision to make. Can you hire all these people and make them a permanent part of your staff? And by the way, these people are not cheap; they’re experts at what they do.
Another thing to consider in hiring a proposal manager or technical writer is, do you have enough throughput in proposals to keep those folks busy and justify those costs on an annual basis? They’ll have expectations that they’re going to be around longer than just this one proposal. This is their career; they’re in for the long-term.
So that is one option, to hire full-time employees, which is very expensive but may be the right decision depending on your circumstances. Or do you count on some other company to help you out, who may be willing to provide or lend you those resources, such as a partner company or friend, at least until you grow?
Or, as a third option, do you reach out to a consultant or proposal resource organization? These companies, like our friends at Proposal Helper, have proposal experts on their staff, and essentially rent them to you for a period of time while you work on your proposal.
Those are big questions that you have to ask, and it all depends on the depth of your wallet, and your needs. If it’s a small task order, you might not need all of those resources, but somebody still has to write a compelling document that meets all the requirements of the solicitation that the government has put out. So you have to figure out where those people are coming from.
Do you have the expertise on staff, or can you hire the experts you need? Can you phone a friend? Is there another company that has those resources and are willing to let you use them? Or will you make a friend? Do you reach into your wallet again, on a temporary basis, to hire the services of a proposal resource organization?
These are all good options but you have to figure out which fits your small company.
“The money is out there, but the fish won’t jump in the boat…just because you’re eligible to do business with the federal government, it doesn’t mean they’re going to start throwing money at you.” – Bill Jaffe, Nov 2011
Welcome back! And to our new friends, welcome! I feel honored to take over this blog where my friend, co-worker and partner-in-crime Bill Jaffe spent so much of his time over the past nine years.
It’s an exciting time for me personally to take over something as important as this blog, as a way to help out the small business and government contracting community as a whole. I’ve been a part of that community for one way or another for over 32 years as both an Army officer and as a government contractor.
So I find these contracting issues very important, and I’m dedicated to this blog’s cause of sharing information, resources, and experience. I plan on using the blog as a learning tool for others, and as a learning tool for me as we go through this journey together on the blog.
The goals of the blog will remain the same, which are to:
- Raise awareness of small business issues in federal contracting
- Give back to the federal small business contracting community
- Give a voice to other small and mid-tier businesses and their advocates
- Provide a resource for small business offices to provide to the companies they serve
Please feel free to contact or connect with me on LinkedIn. I welcome your requests for topics I can talk about on this blog, and I also welcome some of our long-standing partners to bring new topics that they’d like to discuss with our small business audience. And there are a lot of people who haven’t provided input in the past and I’d welcome that as well.
You can read more about me on the TAPE site. In the meantime, just know that I’ve worked with both small and large companies in the past, all government contractors, so I bring that mix of the large and small, seeing how both can work together to be successful. And working together is always the best solution, in my opinion.
John B. Moore Senior Vice President, Chief Growth Officer
Alexandria, Va. – With profound sadness, Technical and Project Engineering, LLC (TAPE) announces that Executive Vice President/Chief Growth Officer William “Bill” W. Jaffe passed away on August 31 at age 71. While his death was sudden and unexpected, Bill had been in ill health in the preceding months.
After a 25-year consulting, management, and executive career including stints at Marriott Corporation, Amtrak, CACI, and 8(a) contracting firms, Bill co-founded TAPE in 2003 shortly after marrying Louisa Long Cullem (now Louisa Jaffe).
While Bill wore many hats in helping to build TAPE into a respected government contracting firm, his true passion was business development, particularly putting together teams to pursue contracting opportunities. As many of his colleagues within TAPE and among our partner firms know, Bill rarely saw a contract opportunity that he did not think TAPE and the right team could successfully pursue, win, and execute. Bill had an infectious enthusiasm and work ethic, often perfecting proposals and holding meetings seven days per week and sending emails in the early morning hours. He was legendary for rarely saying “no” to a teammate’s request for support. True to form, Bill spent the weekend before his death supporting a quick-turn Army opportunity and was working into the afternoon of August 31.
With Louisa’s being a service-disabled veteran of the Women’s Army Corps and U.S. Army Reserve, Bill was also passionate about hiring veterans to allow them to continue their service to our country.
Bill had many hobbies and interests including a love of science fiction/fantasy. He enjoyed interacting with a broad community of board game players in the railroad genre. Additionally, Bill loved buying and selling games and books on eBay. He was a very fast reader and could consume an enormous amount of extracurricular reading each week.
As much as Bill loved government contracting, he cherished his roles as husband, father, and “Papa Bill” to his grandchildren. Bill is survived by his wife Louisa, daughter Karen, stepdaughters Jen (Zach) and Sarah (Tim), and step grandchildren Solomon, Max, and Claire. He also is survived by his brother Todd and sisters Maralyn and Lynn. He is predeceased by his son Bill Sydney Jaffe.
The TAPE Family feels the loss of Bill keenly.
Bill’s family created this Life Tributes page at https://www.jeffersonfuneralchapel.com/obituaries/William-Jaffe/#!/TributeWall to make it easy to share your condolences and memories.
TAPE is a CVE-Verified SDVOSB/8(m) Economically Disadvantaged Woman-Owned Small Business with ISO 9001:2015 certification. The company helps keep the nation safe and strong by providing technology services, training and readiness solutions, and management consulting to the Federal Government.
This is a guest post by Haley Claxton of Koprince Law LLC.
Recently, GAO published a report on small business subcontracting plan compliance, concluding that agency oversight of these plans need improvement.
As many of our readers know, some federal contracts require large business prime contractors to utilize small business subcontractors under a small business subcontracting plan, as described in FAR 52.219-9. For context, in 2019, federal agencies “awarded more than 5,000 contracts requiring a small business subcontracting plan, and obligated more than $300 billion to contracts with required small business subcontracting plans.”
If a small business subcontracting plan is in place, contractors are required to report on any subcontracting achievements and make a “good-faith” effort to keep to the plan. In addition, some regulations and procedures require contracting officers to review the subcontracting plan before or after award to make sure certain information is included in the plan. Agencies are also required to provide SBA Procurement Center Representatives (or PCRs) the opportunity to review the proposed contract and associated subcontracting plan.
After a contract is in place, the FAR requires contracting officers to ensure that subcontracting reports are submitted via the eSRS web platform within a certain amount of time. Contracting officers must then review and decide whether to accept these reports. In addition to reviewing the reports, agencies are also required to perform annual evaluations of all contractor performance though CPARS (the Contractor Performance Assessment Reporting System). One aspect of the annual CPARS evaluation, where applicable, is compliance with the contractor’s small business subcontracting plan.
Despite the amount of oversight agencies appear to have over contractor compliance with small business subcontracting plans on paper, some folks at the Department of Defense were concerned about how much actual oversight agencies were providing to ensure contractors complied with their plans. Thus, GAO looked into how four representative agencies (the DLA, the Navy, GSA, and NASA) provide oversight. It found that the DoD was right to be concerned.
First, GAO looked to pre-award procedures for reviewing subcontracting plans. It found that COs from all four representative agencies reviewed and approved subcontracting plans as required in most, but not all, cases. More problematically, however, the “[a]gencies also could not demonstrate they followed procedures related to PCR reviews in about half of the contracts reviewed.” Put differently, most of the time, the SBA wasn’t involved in reviewing subcontracting plans before contract award, as required.
Next, GAO turned to agency overview of contractor compliance with their subcontracting plans post-award. GAO found this overview was pretty “limited.” Even though each representative agency did offer some amount training to contracting officers on subcontracting plans, GAO found that these contracting officers did not ensure contractors met their reporting requirements in most of the reviewed contracts. In addition, even where reports were submitted as required, many were not reviewed in the manner anticipated.
As a result of its investigation, GAO offered ten recommendations for the reviewed agencies and the SBA. These recommendations are outlined here, but in summary, they ask the relevant agencies to make sure they have steps in place to ensure appropriate review of subcontracting plans and contractor compliance with those plans.
Overall, an increased focus on compliance with subcontracting plans is likely to have an effect on many contractors–hopefully ensuring more contracting dollars go to small business subcontractors. For more on small business subcontracting plans, check out our related blog posts here.
This post originally appeared on the SmallGovCon blog at https://smallgovcon.com/statutes-and-regulations/room-for-improvement-gao-reviews-agency-oversight-of-small-business-subcontracting-plans/ and was reprinted with permission.
This is a guest post by David T. Shafer and Emily J. Rouleau of PilieroMazza PLLC.
Despite requests for delay due to COVID-19, California Attorney General Xavier Becerra has affirmed that enforcement of the California Consumer Privacy Act (CCPA) has started, effective July 1, 2020. The CCPA is a huge step forward in data privacy law, granting California consumers robust data privacy rights and increased control over their personal information. Previous PilieroMazza coverage of the CCPA can be viewed here and here.
While the CCPA has been in effect since January 1, 2020, companies that do business with California consumers will now risk penalties for noncompliance. Below is key information for companies seeking to ensure CCPA compliance and to avoid enforcement action.
Approval of Final Regulations
The Office of the California Attorney General submitted the final proposed CCPA regulations package to the California Office of Administrative Law (OAL) on June 1, 2020, for review. OAL has 30 working days, plus an additional 60 calendar days to review the package.
Once approved, the final regulation text will be filed with the Secretary of State and become enforceable by law. OAL is not expected to make significant changes to the regulations, so a full analysis of the rule will likely be necessary for the creation and implementation of a robust CCPA compliance program.
To understand whether or not you are subject to potential enforcement,, first determine if you fall within CCPA’s compliance criteria. Critically, the statutorily defined terms “consumer” and “personal information” are far broader than comparable statutes and regulations found in other jurisdictions, though that itself is currently the subject of debate in many state legislatures.
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.
CCPA grants consumers significant rights to the use of 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.
With the expiration of CCPA’s safe harbor and subsequent July 1, 2020 enforcement, steps that can be immediately taken may include, but are not limited to, the following:
- updating notices and privacy policies;
- reviewing data flows including data mapping and classification;
- segregating data and IT systems between regulated and non-regulated data repositories;
- implementing cookie banners and web beacons in accordance with CCPA-compliant privacy policies;
- implementing individual request processes (including opt-out and deletion); and
- implementing training to meet CCPA’s new requirements.
What to Watch
The California Secretary of State recently announced that the California Privacy Rights Act (CPRA) will be on California’s November 3, 2020, ballot. If approved by voters, the CPRA would significantly update and amend the CCPA, allowing California consumers to block businesses from using a new category of information known as “sensitive personal” information and establishing a new enforcement authority to protect data privacy rights.
PilieroMazza’s attorneys will continue to monitor the CCPA, along with legal developments for data privacy in other states. For assistance with CCPA implementation in your business, please contact the authors of this client alert, Dave Shafer and Emily Rouleau, or a member of the Firm’s Cybersecurity & Data Privacy Group.
This post originally appeared on the PilieroMazza website at https://www.pilieromazza.com/california-consumer-privacy-act-enforcement-effective-july-1/ and was reprinted with permission.
An announcement from the GSA Vendor Support Center.
GSA eBuy will be updated on August 1, 2020 to allow you to self-certify under specific Special Item Numbers (SINs), subgroups of products and services your company offers on contract.
The scope of certain SINs can be very broad. Subgroups were created to highlight specialized products and services that are offered under those SINs. By selecting the subgroup of offerings your company specializes in, your customers can find you more easily in both eBuy and eLibrary when they conduct their searches. As some SINs contain thousands of contractors, this helps the customer to identify the segment of contractors that can perform. Not all SINs have subgroups.
You may have used this functionality under your legacy contract, but you must reestablish these subgroups under the new SIN structure.
Identifying the subgroups of your contract offerings benefits both you and your customers. This function allows your customers to do better market research and email eBuy RFIs/RFQs directly to contractors that can satisfy their requirements.
Please note, the selection of subgroups does not prevent you from seeing opportunities posted for the SIN(s) you have been awarded. Your ability to review all eBuy opportunities on your awarded SIN(s) does not change.
The following SINs will have subgroups starting August 1, 2020:
561210FA, 541690E, 332311P, 532490P, 333241, 336999, 333318F, 335999, 325612, 325998, 325611, 54151HACS, 517312, 54151S, 54151ECOM, 511210, 33411, 339940OS4, 541611, 562112, 541211, 522310, 541330ENG, 562910REM, 541930, 541614, 541620, 561621H, 339113LAB, 334515, 334516, 333997, 332439.
The below steps outline the process to select your SIN subgroups for both eBuy and eLibrary.
How to select SIN Subgroups:
- Step 1: Login to your vendor profile in eBuy
- Step 2: Click on the Modify Subgroups button located on the right hand side of the screen
- Step 3: Select applicable subgroups
A note from Bill: This is really important for those with specialized NAICS and sub-SINS to see the specifics here and make sure to register, since this is an opportunity to register for more and different sub-SINs.