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.
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