As I wrote earlier on this blog, “Business growth is something that should be celebrated, yet if you’re a small business whose customer is the federal government, your growth can have a noticeable downside.” Namely, being too big to qualify for small business set-asides.
If your business falls into the mid-tier category of being too big to be eligible for set-asides but too small to compete with industry giants, here are the most important changes from the 2017 NDAA (click the links to learn more about each item):
- Gives certain small subcontractors a new tool to request past performance ratings from the government. If the pilot program works as intended, it may ultimately improve those subcontractors’ competitiveness for prime contract bids, for which a documented history of past performance is often critical (learn more).
- Will require the GAO to issue a report about the number and types of contracts the Department of Defense awarded to minority-owned and women-owned businesses during fiscal years 2010 to 2015. The GAO will be required to submit its report within one year of the statute’s enactment (learn more).
- Designed to help ensure that large prime contractors comply with the Small Business Act’s “good faith” requirement to meet their small business subcontracting goals (learn more).
- Establishes a new prototyping pilot program for small businesses and nontraditional defense contractors to develop new and innovative technologies (learn more).
- Will extend the life of the Small Business Innovation Research and Small Business Technology Transfer programs (learn more).
We’ll keep digging into these topics and what they mean for your federal contracting success. Stay tuned!
This is a guest post by Jon Williams, Partner, PilieroMazza PLLC.
The SBA released proposed increases to the small business standards for many industries that use employee-based size standards. According to the pre-publication of the final rule published on January 26, 2016, the SBA will adopt most of the proposed changes with two key exceptions:
The SBA is not increasing the Environmental Remediation Services (“ERS”) exception under NAICS 562910 from 500 employees to 1,250 employees and it is not eliminating the Information Technology Value Added Resellers (“ITVAR”) exception under NAICS 541519 (Other Computer Related Services).
Regarding NAICS code 562910, the SBA explained that following its evaluation of public comments to the proposed substantial size increase, as well as its evaluation of more recent data, the SBA decided to increase the size standard for the ERS exception under NAICS 562910 from 500 employees to 750 employees, which is considerably lower than the initially proposed size standard increase to 1,250 employees.
The SBA estimates that, as a result of the size standard increase, approximately 10-15 additional firms will likely gain small business status which the SBA believes will not significantly impact the small businesses that currently have fewer than 500 employees.
The SBA has also determined it will not eliminate the ITVAR exception to NAICS 541519 and that it will maintain the 150 employee size standard for this code. However, the SBA will modify Footnote 18 of the size standard table to require supply components of small business set-aside ITVAR contracts to comply with manufacturing performance requirements or to comply with the non-manufacturer rule by supplying the products of small business concerns, unless SBA has issued a class or contract specific waiver.
With regard to the Research and Development exceptions under NAICS 541712, the SBA is adopting modified exceptions and the size standards will either remain the same, or be increased from 1,000 employees to 1,250 employees.
According to the pre-published report, the final size standard increases in these industries will be effective on February 26, 2016. To view a complete copy of the pre-published final rule and/or to view a summary of the SBA’s revised adopted size standards, click here.
Note from Bill:
If you have any questions about the size standard increases, Jon welcomes your questions at http://www.pilieromazza.com/contact.
In 2007, TAPE won an Army support contract that catapulted our growth. It came out of work that our founders had done as employees of a large business, and built on that customer relationship when the Army decided to try a small business solution. After much travail and many late, sleepless nights, we found ourselves the proud winner.
During the transition, many of the same folks that we’d known since the 1980s proved to still be working the job, much expanded. This core group of folks has supported this contract for nearly 30 years, many of them first in uniform as officers, and then as contractors for the various primes and subs. Joel Fleck is one of the key people, who’s been Task Leader, Deputy PM, and now PM/VP of the Training/Optempo Sector. This is a little bit of his story.
How do you keep the perspective and enthusiasm fresh?
First off, the work is important; it has the potential to affect soldiers and units everywhere in all three components – active Army, Reserves, and National Guard. So at the end of most days you go home feeling good about what you did. Second, the people both within the project team and within the Army are so dedicated and appreciative. It is hard not to want to give your best all of the time.
Third, you have to read professional publications to stay abreast of what is going on in the Army and what is the senior leadership trying to do. You need to keep your language up to date, and your empathy fully turned on.
You cannot be a curmudgeon. You can not sound like you came from a different century. You can not become complacent. The longer you are providing them support the more careful you need to be that what you say and do is accurate. You cannot get lazy about fact checking. Credibility is your greatest asset but it is easily lost if you get complacent.
What have you found is the best way to adjust to changes?
Be part of it. Keep an open mind. Try to provide advice and assistance in implementing the change. Being part of it always allows you to lay out the potential challenges and mitigating solutions which helps maintain your relevancy and your credibility.
The focus has to be getting things done right for the Army and always making the client look good. Don’t worry about getting credit.
How do you maintain continuity in your work when new leaders come in at the client, with different leadership styles?
Adjust where you can. Continue providing the best support to those people under the new leader. Continue to build credibility and value. Most of the new leaders got to where they are because they are smart. Once they figure you are an asset, and that you can support and advance their goals, things get better.
Supporting the same client for almost 30 years – inside and outside of uniform – requires several different things: patience, flexibility, honesty, un-abrasiveness, high degrees of accuracy, great co-workers, responsiveness (sometimes 24/7), and assistance to not only the client but those around him.
This is a guest post by Joe Appelbaum of Potomac Companies, Inc.
Special news for our small business readers in Virginia:
Compliance alert: VA House of Delegates passes emergency legislation to maintain small business definition of 50 employees or fewer.
The Virginia House of Delegates voted to maintain the state’s definition of small businesses as employers with 50 employees or fewer. The PACE Act in October 2015 changed a provision of the Affordable Care Act which originally was set to change the definition of the small group market as businesses with 100 employees or fewer.
The Act allowed states to determine the size of their small group market. Maryland and DC maintained their definitions of small groups as those employing 50 or fewer employees, and now in January 2016, Virginia is also maintaining their definition.
If the small group definition had been expanded, small groups would have seen rates rise significantly in a short period of time.
Joe Appelbaum is a lifelong entrepreneur and started his first business at the age of 13. He founded Potomac Companies in 1990 with the mission of helping employers manage the future cost of healthcare and has grown the company to become one of the premier full service employee benefit brokerage and consulting firms in the Washington, D.C. region. Visit them at http://www.potomacco.com/.
This is a guest post by Tonya Saunders of Mid-Tier Advocacy, Inc.
On November 25, 2015 President Obama signed the National Defense Authorization Act (NDAA) for the 2016 fiscal year into law. The NDAA contains many new clauses that affect federal contractors and the Department of Defense (DoD). Among other things, the NDAA aims to increase the capability of small businesses that provide services and products to the federal government.
Here are a few highlights:
- Under this new legislation it requires DoD to notify Congress when Primes are not meeting subcontracting goals under the comprehensive small business-subcontracting plan, to make sure they are getting the most of their contracts.
- It also requires a report to provide an analysis of the reasons for cost and schedule over-runs associated with the program, including with respect to the performance of Prime contractors and subcontractors, and evaluate the future of the requirement.
- It helps new entrants to defense contracting by allowing them to use simpler commercial item purchase procedures rather than the more complex traditional government contracting vehicles.
Under the new NDAA there are a few additional changes that contractors should also be aware of:
- This updated legislation prevents agencies and courts from applying the non-manufacturer rule to small service contractors, so that small service contractors can continue providing incidental items as part of the procurement.
- It also protects small contractors by ensuring that the small business procurement advocates at the Small Business Administration have the correct skill and are receiving the necessary training.
- The Small Business Administration is now required to prioritize prime contracting, subcontracting, participation rates, and industrial diversification when grading agencies on how well they contract with small businesses. This is aimed to address the problem created when the SBA awards an “A” grade to federal agencies even though 100,000 small businesses no longer compete for federal contracts and the agencies do not meet their small business goals, with evidence suggesting that numerous industries have little or no small business participation.
- It allows the small business advocates in each agency to assist small businesses to increase set-aside opportunities with contracts not under consideration for small business participation.
- The NDAA 16 also includes a few protections and enforcements for small and medium size businesses, including the creation of a statutorily independent office to hear challenges to size standards of small business.
- It also empowers the office of the contractor to review the process by which SBA decides the industry-specific small business size standard, since currently small businesses must go to federal court with these challenges.
In short, the NDAA is legislation that continues to receive bi-partisan support that always passes Congress and is usually signed into law by the President – enough said!
About the author: For more than two decades, Tonya Saunders has worked on Capitol Hill, lobbied for client interests, and started her own businesses. As founder and director of Mid-Tier Advocacy, Inc., a 501(c)3 nonprofit national coalition of small, emerging, and medium-sized businesses (primarily federal contractors), Tonya was instrumental in passing legislation that helped these engines of our economy grow and create jobs.
This is a guest post by Keith Stadler of KSA, LLC.
Note from Bill: In last week’s guest post by June Jewell, we looked at project manager accountability. We’ll continue that theme with this look from Keith Stadler at the importance of accountability – authority and responsibility – across your company.
Straightforward organizational challenges can have well-defined solutions around which general agreements are easily made. But for serious matters, the challenges, let alone solutions, are rarely straightforward.
Problems like this are complex, difficult, mysterious, and sometimes require gut-wrenching choices, if properly addressed. This is where a clear understanding of the authority and responsibility to secure the right outcomes is essential.
Surprisingly enough, in many organizations, the matter of making clear in whom the responsibility and authority lays for tasks, projects, and processes is ambiguous; unstated and left to the imagination of the workforce, including the person who will ultimately be seen as the “responsible party.”
It’s not difficult to visualize the effects and results of this kind of arrangement. A consensus-based dynamic necessarily takes over:
- Outputs are the “lowest common denominator” outcome on which all can agree.
- Co-corkers minimize the impact of collaboration on their office rather than maximizing broader organizational benefits.
- Innovation, creativity, adaptation, critical thinking, and advocacy are discouraged, even punished.
- Outspoken personalities dominate collaboration.
- Everyone has a veto, knows it, and feels empowered to exercise it.
- Projects and processes can and do stop altogether when a single party refuses to act.
- It can be difficult to determine if a decision or outcome was reached at all.
- There are minimal or no sustainment of outcomes.
- People simply refuse to show up for planning sessions and meetings.
- Consensus accommodations are made to work around the personalities involved instead of doing what is best for the organization.
- The status quo usually prevails.
So much harm comes of this kind of gap in an organization, but it’s so simple to avoid. Here are 12 things that leaders at every level can do:
- Explicitly and clearly identify the person responsible and confer on her or him the authority need to complete the task, project, or govern the process.
- Make it known to all the participants and their bosses.
- Put it in writing.
- Empower the collaboration effort with your own clear intent. Tell the leader, his team, and their bosses, what is the purpose, a little about the method of getting there, and what the final product will be in your mind.
- Tell them what it is not.
- Be available for follow-up discussions and interim guidance as work proceeds.
- Ask how it is going.
- Make it evident to all that the person in charge is answerable for the final outcome by engaging them as the group leader.
- Ask how you can help the project leader, then do it.
- Precisely capture any decisions that are needed along the way and act on them.
- Follow up with the project leader to ensure that progress is being made. If not, find out why and help fix it.
- Publicly praise and thank the team and especially its leader. Tell their bosses too.
These things easy to do and will be appreciated by everyone involved. Over time, employees will embrace the company’s approach to authority and responsibility and it will become second nature.
Keith Stadler is the founder of KSA, LLC, a company dedicated to advancing organizational visions and fundamentally transforming how businesses everywhere are run. He has over 40 years of leadership experience in organizations from the very large and established to small technology start ups, and everything in between. Visit www.ksaintergration.com for more information.
This is a guest post by June R. Jewell, CPA.
While most project consulting firms expect their project managers (PMs) to deliver profitable projects, many have not put the appropriate measures in place to ensure that it happens. Accountability at the PM level is often vague and unstructured, which can lead to several different consequences – but not the ones we want!
Part of this issue has to do with the many responsibilities given to PMs, and a lack of true visibility into what they are really doing every day. This leads to PMs being given many tasks and little guidance as to how to be successful.
The other big challenge is measuring results. The majority of firms that we work with are not tracking individual performance, or worse, failing to implement consequences even if it is being measured. This has the unwanted effect of grouping good and poor performers together, and the less desired result of passive aggressive behavior on both the PM’s part and the firm’s leadership.
The following are practices that I often see in many project consulting firms that undermine their ability to achieve profitability goals. If you recognize any of the following issues in your firm, they could be costing you a great deal of money! Lost dollars can be found by ensuring that every project hits target profits. If you see any of these practices in your firm, they need to be addressed as soon as possible:
- PM performance is evaluated in an annual review – The annual review is a dreaded process in many firms. Even with top performers, many employees don’t feel adequately recognized, and feedback is often provided too late to make a difference to performance results. A more frequent process of project review can improve financial results and engage employees more in the process of improving their own performance.
- All PMs are given a raise and/or bonus regardless of performance – With the war for talent gaining intensity these days, many firms are afraid of “calling out” mediocre performance. This has the double negative outcome of dis-incentivizing both top performers who don’t see the benefit of going the extra mile, as well as not giving consequence to poor performers for failure to hit goals. Bonuses and raises need to be tied to financial results in order to impact behavior.
- All of our offices do things their own way – This is a common problem in firms that have remote offices, and especially when there has been an acquisition. Many offices take on their own culture, and create their own new processes – from proposals and estimating, to project budgeting and billing. This has the negative impact of making it difficult for leaders to compare one office to the other, determine what is working and not working, and share best practices between groups. It is critical to a profitable firm to get everyone following best practices and operating the same way.
- We never fire anyone – The combination of a family-oriented firm culture along with difficulty finding technical staff has created an environment where many firms tolerate poor performance. This leads to keeping PMs and staff that are actually hurting the profitability of the firm rather than contributing to it. The message that is being delivered to staff is that mediocre or poor performance is acceptable and the ultimate consequence – being terminated – is not a possibility. Without this consequence, it will be very difficult to change behavior or increase profitability.
- We do not have metrics to measure our PMs – How you report on performance is a big indicator of how employees will perform. Many firms choose to measure profit centers, business units, offices, etc. rather than focus on individual results. Without metrics and financial targets, it is much more difficult to evaluate PM performance, and hold them accountable for results. Looking at project profit margins is the most effective way to compare PM performance and the first step to holding them accountable.
All of these flawed business practices add up to lost dollars. So what is the cost of ignoring or even rewarding mediocre or poor performance? It may be much larger than you imagine. On top of the measurable costs of project overruns, rework and scope creep, consider the intangible costs of frustrated staff, unhappy clients and failure to retain your best PMs. This can add up to thousands and even millions of dollars per year in some cases.
Focusing on and improving your firm’s performance management practices can have a huge impact on all of the key metrics you use to measure the health and results of your firm. Special attention should be given to creating a regular rhythm of feedback, establishing clear measures for individual performance and implementing meaningful consequences for attaining financial targets.
This post was originally published on the AEC Business Solutions blog at http://aecbusiness.com/holding-project-managers-accountable-for-profitability-blog/ and was adapted and reprinted with permission.
June R. Jewell, CPA, is the president and CEO of AEC Business Solutions and the author of Find the Lost Dollars: 6 Steps to Increase Profits in Architecture, Engineering and Environmental Firms. Her popular blog covers innovative ideas on business leadership, project management processes, business development and improved operational efficiencies. Register for one of her upcoming webinars at http://aecbusiness.com/webinars/.
There is a whole set of processes that are launched upon winning a new federal contract. Let’s look at some of the things to expect. Of course, the first thing is to get the award – the actual notice of award. However, in the federal sector even that’s not just a single event.
The first thing that happens is you’ll start to hear rumors that you’ve won. There may even be some negotiations between you and the customer to discuss terms.
Before a contract can be awarded, there is a three-day notice to the losers, which essentially announces who the apparent winner is. The purpose of giving this notice is to allow the companies that did not win to submit size-standard protests.
Size-standard protests are the government’s way of policing the process (or allowing companies to police each other), to make sure that the winning company is truly eligible as a small business under the specific NAICS code for this particular contract. There are times when, for a variety of reasons, people are found to be non-compliant, even when they’ve already been on the contract.
Unfortunately, sometimes competitors can be over-zealous with their due diligence, and may incite a protest without having all the facts. For example, a company I knew was the subject of a protest because their website listed billions of dollars worth of contracts they had won. Yet some of these were multiple-award IDIQs and the amount of work they actually won under them was quite small.
Another part of the process is the debrief. Here, any of the losing companies – or the winner – can request a debrief where you get an official explanation of how the government evaluated your proposal and where you fit vis-à-vis the winner, though you’re never told what other businesses may have scored on their proposals.
The protest period lasts for 10 business days from the date of award. It’s important to understand that all of these pre-award and post-award days count as part of the transition time specified in the contract. So you need to start transitioning.
Key elements of a transition
It is a certifiably bad idea to not plan out your transition in as much detail as you can, understanding your activity set and knowing the accountable people. This is the first action you will be taking on a new contract with a new customer; you are building a critical relationship for the future.
Make sure you have the people necessary for the contract, and that you have a place to house them, along with any equipment they’ll need. Or if they’ll be working at the government site, you must know the security requirements to access the computers and other government facilities.
If you have subcontractors you need to have the contract in your hand, and a subcontract document in their hands. In order for them to proceed, you may need to give them what’s called an authorization to proceed – the verbal authority that allows someone to take action even though the legal document is not in place yet during the transition.
Meet with your new customers frequently during the transition and beyond, whether informally or formally. Not only are you building a relationship, but this is a way for the customer to give you the information you need to be successful. If all goes well, you will have a contract for as long as it lasts.
The best and brightest of your staff are the ones who will carry a company far into the future, and every time you promote someone, that act resonates through the entire organization.
This is one such of the “million stories in the Big City” – a Junior PM job opened up, and we promoted a billable supervisor to an overhead PM position. The following is a first-hand story about that transition, and what we as senior staff and managers can do to help the folks going through a similar transition.
Meet Ken Geary, retired Marine, and newest PM on the TAPE block.
What was the biggest change going from being a supervisor to being a project manager?
“I would have to say the scope of management. I went from directly supervising a relatively small team of five individuals performing a task that I was intimately familiar with, to managing a much larger group of people through delegation and direct communication.
Also management is no longer my sole responsibility. I work to not only provide exceptional service to our customers but also focus on business development, seeking to grow our current contracts as well as procure new ones.
I see this as a general trend, where business development is less one person’s specific role, and more rolled into all program management roles.”
A year later, what would you tell yourself when you were about to start?
“Keep better notes and to-do lists. When I first started in the program management role, I was assuming I could continue to just remember everything I needed to do, as I did when managing a smaller team and wasn’t being pulled in so many directions.
Now that I’m often switching from one project to another, I’ve found that writing everything down helps me to ensure that I complete all of my tasks. I can quickly see the current status and be reminded of the key points that are relevant when working with different contracts.”
What do you think are the most important traits of a good project manager?
“When I was in the Marine Corps we affectionately changed the slogan from semper fi (short for semper fidelis – Latin for “always faithful”) to semper gumby (“always flexible”) and I believe that holds true here.
As a program manager many things fall into your scope of work and you need to be ready to switch gears instantly, manage multiple things, and perform those tasks – proposal writing, performance reviews, and anything that comes along in day-to-day program management.”
What are the biggest benefits to having a project manager in place?
“One of the major benefits of putting a program manager in place is to provide a single point of contact for any issues. This is something that benefits our employees as well as the government points of contact by delivering to provide accurate information effectively and directly.
I can work with them to solve a problem directly, or find the answers for them without them having to get passed around. I know when I call up to get answers or solutions it can be frustrating to get passed around from one person to another.”
Is there anything else you would tell a new project manager?
“Ensure that you are asking questions daily. There is a lot of information to learn and if you don’t ask when you have questions people will assume that you know and understand the information and tasks that have been delegated to you.
If you’re not sure about acronyms or other shop talk, say so. Don’t be scared to ask questions, you need to make sure you understand everything.”
So there you have it – Ken’s story, a year later. Without blowing up his ego too much, he’s done a superb job. What he didn’t tell you is that several of our contracts were coming to a close and needed bridging, and his relationship skills with the customer saved TAPE a lot of problems that would or could have surfaced.
A couple of months ago I wrote about how small business federal contractors could use the results of the SBA’s 2014 Small Business Scorecard to target federal agencies looking to increase their set-aside numbers.
“I wish it were that easy,” was the response from one of my readers. They went on to describe what is unfortunately a common contracting experience. Their federal government agency customer had decided to insource some of the work the contractor’s company had been providing.
So what can you do when the government threatens to – or does – insource your best people?
Well, here’s what we did at TAPE back in the day, because it happened to us when we won our first big contract. We showed up at the kick-off meeting and the government contracting officer’s representative (COR) said they were going to insource 25% of the contract before we’d even start.
We did what we could – talked to the agency’s small business person, the SBA, and the contracting officer. However, the reality is that there really was no recourse.
What you have to do in this type of situation is plan for success. Anticipate the possibility that your employees are potentially going to become government employees someday.
If you’ve treated your employees well, then these folks are likely to be friends. Figure out how you’re going to take advantage of that friendship, in terms of new contacts, access to “nearest neighbors” (related departments or agencies that could potentially hire you), and increased awareness of your business’s good reputation.
In our case, while our agency customer was talking about 10 or more positions, they wound up insourcing five. What saved those five positions? The agency hadn’t considered the overhead it would cost to move all those positions in house. As well, it had crossed over into another budget year they didn’t get their required budget.
So five employees stayed our employees. And because we had treated them so well, each of the five who became government employees proved to be a valuable resource for us in the future.
So that’s my advice. Instead of fighting government insourcing, work with it. There’s really nothing much more that you can really do. Believe me, your customer will recognize the difference between resistance and supportive activity, and they will remember that the next time a job comes up.