Category: Uncategorized

Government Contracts Can Be Very Lucrative For Small Businesses The United States government issues 500 billion dollars in federal contracts on a yearly basis. They also set aside 23 billion dollars specifically for small businesses. However, many small businesses find the process of winning government contracts daunting and give up before even really trying.  Sam Directory will guide you through the process of writing a successful government contract proposal. We are invested in your success and want to help you succeed in winning a lucrative federal contract. Understanding The Regulations There are many advantages to being a successful government contractor. However, the government has stricter rules and regulations regarding accounting when compared to private sector clients. It is important to keep up with federal regulatory requirements.  Federal government agencies receive their funding from taxpayer dollars and they need to justify their spending in order to prevent waste. We will help you make sense of government accounting so you can develop a methodology that works for you and your business. DCAA Approval The Defense Contract Management Agency (DCMA)  helps define business systems requirements and provides direction on audits and approval criteria. Potential government contractors need to understand this agency as they define the approval criteria for awarding contracts. They also have a strong hand in guiding government audits. Speaking with them will help you with the following: direct and indirect cost segregation cost pools and allocation bases timekeeping labor distribution systems maintaining compliance with invoicing clauses avast and ever-changing complex of other issues Have A Clear Understanding Of The Government’s Accounting Requirements The Financial Accounting Standards Board (FASB) states that contractors must comply with the following in order to work with the government: Federal Acquisition Regulations (FAR) Cost Accounting Standards FAR agency supplements Understanding Audits Your company should be clear on what the DCAA considers the responsibilities of federal contract actors. They include the following: timeliness of payments to subcontractors documentation of contractor oversight of subcontractors documentation of enforcement of flow downs documentation of support for subcontractor billings documentation of subcontractor reviews Keeping Ahead of Technological Innovations Keeping pace with stringent government accounting policies allows a company to truly understand governmental purposes, needs, and larger processes, and then use that knowledge to best manage and methodically grow the company.  Luckily today there are many cutting edge technologies that can take the pressure off by making even the most complex accounting procedures quite simple. These innovations help a contractor comply with government requirements, permitting employment of systems for management and growth while adapting to keep in step with ever-incoming changes in requirements. Also, having a strong accounting system in place will only make your company better in the long run. Understand That Change Is Constant Agencies are only allotted a certain amount of money through government funding. Changes in the administration can bring a total overhaul in what is a priority in comparison to previous years.  Many people think that governments are slow to change. However, as the world becomes more complex, a contractor needs to keep pace with the changing federal marketplace. It is extremely important for agencies to be transparent about their finances. Contractors must be strategic in anticipating and implementing modifications to any policies, procedures, and systems that support compliance, in order to maintain pace with changing requirements for their companies in regards to being a federal contractor. Surprise Audits Government audits can occur without any type of advance notices. Contractors must always be prepared in order to receive a solid evaluation.  A surprise audit that reports non-compliance with federal accounting regulations can have a lot of negative consequences. This could include termination of the contract and payments can be withheld unless improvements are in place. This can be very time consuming and stressful. This can also severely affect opportunities for future business with the government. Make Sure You Have The Right Staff It is vitally important that government contractors have skilled accounting staff to ensure that the company is in compliance with all policy regulations. The company must have adequate policies and procedures in place for the prevention of mistakes, and especially for their timely discovery and correction. This helps cut down on exposure to accounting errors that jeopardize contractors, inaccurate data, incorrect data entry into the system, or errors in the performance of internal accounting processes. Make Sure You Are Organized Having solid financial records and a clear thought out process goes a long way to impress government agencies that you can handle the job. It presents a professional demeanor that is quite impressive. The Key To Winning A Government Contract Is To Pay Attention To Guidelines It is very important that you read closely what the request for proposals or RFPs wants in your bid. Make sure that you are aware of deadlines and who is handling the requests. Usually, small businesses have 6 to 8 weeks to submit a bid but this can vary, depending on the agency.  Make Use Of Government-Provided Free Tools. You can identify contracting opportunities online by utilizing tools such as this forecasting tool that lets you see what opportunities are available. You can study the government contracts that are a couple of years old to see what requirements are needed to win the job. This puts you in an excellent position to have all your research completed when the contract is about to expire and you put in your proposal. The System for Awards Management or SAM Directory The absolute first thing that you must do in order to qualify for government contracting jobs is to register with the federal government supplier database, which is called the System for Award Management or SAM, for short.  This allows you to be certified by the Small Business Administration (SBA). This gives you the Dun & Bradstreet Number (DUNS Number). Your business size will be determined to see if you qualify for the specific set aside government contracts. You will also identify Your North American Industry Classification System. Please see our many… Continue reading Accounting Tips For Federal Contractors

What Is Government Contracting? Government contracting is when specific government agencies contract with private companies for specific goods or services. The agencies usually put out a contract or often a request for proposal (RFP) and various companies can place bids for the project. Once an agency selects a particular business, a contract is signed, and that business is now considered a government contractor. Why Work For The Government? There are many compelling reasons to work for the Federal Government.  We will go into in-depth detail about how a small business can benefit greatly from being a government contractor. Being A Government Contractor Is A Great Way To Make Your Business Stand Out In An Overcrowded Field Business can be very competitive. Working on government projects is a great way to make a mark in an oversaturated market. The government has a great deal of work specifically set aside for small businesses. Also, many small businesses often do not want to deal with the hassle of working with the government, and sometimes there can be surprisingly little competition for a government project. That is why utilizing Sam Directory to handle all the confusing registration requirements is a very smart investment.  The United States Government Is A Very Powerful Client With Deep Pockets The Federal government usually spends around 500 billion dollars a year on goods and services. This makes the U.S. government an extremely attractive client. There are few other organizations with this type of spending power and clout. The government also tends to buy goods and services in bulk. If your business has the infrastructure to handle large orders, then the government can help you grow substantially at an accelerated pace. Government agencies also buy goods and services in large quantities. Large orders can be a double-edged sword for small businesses. However, if managed correctly, they can help you grow substantially and rapidly. Small Businesses Are Given Special Consideration When It Comes To Government Contracts In many markets, small businesses are often outcompeted by larger organizations that often have access to almost unlimited resources. This set aside actually might increase a small business’s chances of winning a lucrative bid. The federal government is required to set aside at least 23 percent of its total spending specifically for small businesses. Several small businesses have made a fortune just on federal government contract awards. The Federal Government Offers Great Opportunities For Many Types Of Businesses The government actually designates a portion of the contracts for women-owned small businesses, small disadvantaged businesses, companies within historically underutilized business zones (HUBZone), and service-disabled, veteran-owned small organizations. This allows for underserved groups to have a real chance to get awarded lucrative government contracts. The Government Is Fantastic For New Businesses The government has a lot of demand but it goes out of its way to make sure all competition is open and fair. It will need to work with almost any business for products and services with competitive pricing. The United States government is known for running with high levels of precision and accuracy. Making sure the government contracts are fulfilled is a great way for a new small business to streamline its process and delivery methods. Working With The Government Is Great For Marketing The government is one of the most powerful consumers in the world. Being a government contractor is a wonderful way for any business to grow its reputation in the digital marketplace as well as other forms of advertising. It is a fantastic way to build a strong reputation in a relatively short amount of time. Government Contracts Offer Security In These Uncertain Times. Covid-19 has halted a lot of different industries. However, the government must continue to move forward for the health and welfare of its people. Government contracting can be a shining light in the pandemic darkness and provide a lifeline to many struggling businesses who are trying to survive this unprecedented situation. You should remember that government agencies are in need of goods and services in a year-round capacity. This makes them one of the few consumers that are actually recession-proof and a great source of steady reliable income. How Do You Get Started Working With The Government? SAM stands for System Award Management. In order to do any business with the federal government, you must register your business in the System for Award Management. The government will not hire any type of business that has not registered in the SAM directory. We have an article on our site, Everything You Need to Know About SAM for Small Businesses, that gives you important information about this process. As a smart entrepreneur, you have already used our site to register in the SAM directory. Congratulations on taking this important first step to become a government contractor. Registering With The SAM Directory Also Has Other Important Advantages You must register with the SAM directory in order to apply for government grants. A grant is a way the government funds your ideas and projects to provide public services and stimulate the economy. Grants support critical recovery initiatives, innovative research, and many other programs listed in the Catalog of Federal Domestic Assistance (CFDA). A grant is different from a loan in that it is money that your business does not have to pay back. So, registering for the SAM directory actually gives you access to free money! Never Underestimate The Power Of Research. The business landscape has changed dramatically in the last decade. One thing that has always remained constant, the United States Federal Government is one the largest and most powerful consumers of goods and services in the whole world. Being a government contractor is a highly desired position for any business. Do your research. Make sure you understand what agencies will benefit most from your business. Make sure that you read our blog on how to put together a well thought out proposal when you bid for government contracts. The government can be a great source of revenue and security… Continue reading Why Government Contracting is a Good for Small Businesses

Why Work For The Government? There are many compelling reasons to work for the Federal Government.  We will go into in-depth detail about how a small business can benefit greatly from being a government contractor. Being A Government Contractor Is A Great Way To Make Your Business Stand Out In An Overcrowded Field Business can be very competitive. Working on government projects is a great way to make a mark in an oversaturated market. The government has a great deal of work specifically set aside for small businesses. Also, many small businesses often do not want to deal with the hassle of working with the government, and sometimes there can be surprisingly little competition for a government project. That is why utilizing Sam Directory to handle all the confusing registration requirements is a very smart investment.  The United States Government Is A Very Powerful Client With Deep Pockets The Federal government usually spends around 500 billion dollars a year on goods and services. This makes the U.S. government an extremely attractive client. There are few other organizations with this type of spending power and clout. The government also tends to buy goods and services in bulk. If your business has the infrastructure to handle large orders, then the government can help you grow substantially at an accelerated pace. Government agencies also buy goods and services in large quantities. Large orders can be a double-edged sword for small businesses. However, if managed correctly, they can help you grow substantially and rapidly. Small Businesses Are Given Special Consideration When It Comes To Government Contracts In many markets, small businesses are often outcompeted by larger organizations that often have access to almost unlimited resources. This set aside actually might increase a small business’s chances of winning a lucrative bid. The federal government is required to set aside at least 23 percent of its total spending specifically for small businesses. Several small businesses have made a fortune just on federal government contract awards. However, before companies bid for contracts, it is important to understand the different types of contracts utilized by the government. Time and Materials Contracts The government rarely awards this type of contract because of the expense. A Time and Material Contract requires paying directly for any and all costs that are associated with the particular project. Labor Hour Contracts are defined as a variation of the time-and-materials contract, differing only in that materials are not supplied by the contractor. See 12.207 (b), 16.601 (c), and 16.601 (d) for application and limitations, for time-and-materials contracts that also apply to labor-hour contracts. See 12.207 (b) for the use of labor-hour contracts for certain commercial services. Labor Hour Contracts do not include the cost of materials. Indefinite Delivery Contracts The government uses this type of contract when it does not know in advance exactly how much of a product or a service will be needed for a project. They will usually list a range and certain companies will be invited to provide their lowest bids on a per-item basis.  This includes Task-Order Contracts which permit government stocks of specific items to be maintained at minimum levels and allow direct shipments to the users of products or services. They also permit great flexibility in both quantities and delivery scheduling and the ability of buyers to order supplies and services only after specific requirements for them materialize. Job-Order contracts, a competitively bid, fixed price, multi-year construction contract based on established or published unit prices via a unit price book (UPB) or a price list with a multiplier (termed coefficient) applied to the unit prices also fall under this category Fixed-Price Contracts These government contracts are used when the scope of work is clear from the beginning and therefore a price is determined by the agency in advance. There are many different types of this particular contract. Firm Fixed-Price (FFP) This contract means that the price is set in stone and the vendor or small business awarded the contract will be taking all the risk. So if the contract is over budget, the small business owner has to pay out of pocket. However, if the project is under budget, then the business will keep the extra profit. This is a great contract for companies that are precise with their pricing and a lot of experience in the field. FFP Level-of-Effort This government contract is defined by the level of effort the service provider will commit to the project, rather than results. It is a common contract used for things like research, which is often hard to define in advance. FFP Materials Reimbursement The small business provider will have a predetermined price for service and labor but is reimbursed for the cost of the materials at the end of the project. This contract is often used for repair services where at the beginning, the cost of materials may be unclear. Fixed-Price with Award Fees A fixed price with award fees contract offers a hard and fast price for objective performance success. This contract will also have additional awards to incentivize more subjective qualities like aesthetic appearance and technical knowledge Fixed-Price with Economic Price Adjustment The prices are often adjusted at the top of the project to account for changes within the cost of labor, materials, or market prices of specific items within the contract. The criteria for these sorts of price changes must be defined within the original contract. Fixed Price Incentive (FPI) This contract states a maximum price but it also awards the service provider for coming in under budget. So coming under budget in this type of contract allows for a larger profit for the small business provider. Cost-Reimbursement Contracts Cost-reimbursement is a category of contracts that are used when it would be too difficult to estimate the cost of the project in advance. They usually define a spending limit but are a much lower risk for the service provider than fixed-price contracts.  Cost Contracts This contract pays only for expenses and there is no… Continue reading The Different Types of Government Contracts

The Sam Directory is here to help you understand how your company can gain access to lucrative government contracts. We want to be your guide to making sure your business does not lose out on excellent opportunities. So, now we want to help you navigate the bidding process. Get The Bid Package After you have ascertained the government contract that you want to bid on, it is important to contact the agency and request a bid package. This package is also often called the solicitation package. After you receive the package, review it carefully. Find out what the purchasing office is wanting to buy and figure out if your company can meet the requirements. The Bid Package should contain the following: the buyer’s contact information including name, address, phone number, and e-mail address are listed on the bid notice. When you request the bid package, make sure to also ask for amendments. What Type Of Contract Is Being Sought? The three major contracts that are being sought are fixed price, cost-reimbursement, and special situation. Fixed-Price Contracts These government contracts are used when the scope of work is clear from the beginning and therefore a price is determined by the agency in advance. There are many different types of this particular contract. Firm Fixed-Price (FFP) This contract means that the price is set in stone and the vendor or small business awarded the contract will be taking all the risk. So if the contract is over budget, the small business owner has to pay out of pocket. However, if the project is under budget, then the business will keep the extra profit. This is a great contract for companies that are precise with their pricing and a lot of experience in the field. Fixed-Price with Award Fees A fixed price with award fees contract offers a hard and fast price for objective performance success. This contract will also have additional awards to incentivize more subjective qualities like aesthetic appearance and technical knowledge Fixed-Price with Economic Price Adjustment The prices are often adjusted at the top of the project to account for changes within the cost of labor, materials, or market prices of specific items within the contract. The criteria for these sorts of price changes must be defined within the original contract. Fixed Price Incentive (FPI) This contract states a maximum price but it also awards the service provider for coming in under budget. So coming under budget in this type of contract allows for a larger profit for the small business provider. Cost-Reimbursement Contracts Cost-reimbursement is a category of contracts that are used when it would be too difficult to estimate the cost of the project in advance. They usually define a spending limit but are a way lower risk for the service provider than fixed-price contracts.  Cost Contracts This contract pays only for expenses and there is no profit for the small business provider. Cost contracts are often used for research projects provided by non-profit organizations. Cost-Plus-Fixed-Fee This contract includes a limit for expenses that will be reimbursed along with a fixed payment for the service provider. Cost-Plus-Incentive Like Fixed-Price-Incentive contracts, this provides a financial incentive for the service provider to come in under budget, while also covering project expenses. Cost-Plus-Award-Fee This contract states that the govt client can pay the expenses of completing the project and also provides financial awards supported criteria outlined beforehand. Special Situation Contracts These include: Labor hour: Direct labor hours expended are reimbursed at a hard and fast hourly rate, usually including all costs and profits. (See FAR 16.602) Definite-quantity: The contract quantity is defined, but the delivery schedule is flexible. Payment is on some sort of fixed-price basis. (See FAR 16.502) Requirements: Actual delivery schedules and quantities are flexible during the contract period. Payment is based on a predetermined fixed-price basis. (See FAR 16.503) Special Bidding Techniques and Bid Office Terminology Time and Materials Contracts This is also a special situation contract. The government rarely awards this type of contract because of the expense. A Time and Material Contract requires paying directly for any and all costs that are associated with the particular project. Labor Hour Contracts are defined as a variation of the time-and-materials contract, differing only in that materials are not supplied by the contractor. See 12.207 (b), 16.601 (c), and 16.601 (d) for application and limitations, for time-and-materials contracts that also apply to labor-hour contracts. See 12.207 (b) for the utilization of labor-hour contracts for certain commercial services. Labor Hour Contracts do not include the cost of materials. New Bidding Techniques Auction — A government buying technique where the bidding continues until no competitor is willing to submit a far better (i.e., lower) bid. The technique is usually mentioned as “reverse auction” because the govt is trying to find a rock bottom price, not the very best price. It is important to do your research and make sure that you can cover your costs in an auction process. Do not get caught up in the excitement of the moment and make calm rational decisions. Bundling — a way where the govt consolidates two or more requirements that were normally bought separately into one contract. The support contracts of the many military bases, which require a spread of labor disciplines to stay at the bottom operating, are being bid in this manner. In bundling, make sure that you carefully read all the provisions. It is important to not ignore the project management aspect of this type of bidding. How Do You Get Started Working With The Government? SAM stands for System Award Management. In order to do any business with the federal government, you must register your business in the System for Award Management. The government will not hire any type of business that has not registered in the SAM directory. We have an article on our site, Everything You Need to Know About SAM for Small Businesses, that gives you important information about this process.As a smart entrepreneur, you… Continue reading The Bidding Process For Government Contracts

After you let SAM Directory help you complete your registration with SAM, you are probably wondering what government agencies are hiring contractors. The good news is that there are hundreds of agencies that have lucrative contracts for your business. Here is a list of a few of the biggest agencies. Department of Energy The Department of Energy defines its mission as “…. to ensure America’s security and prosperity by addressing its energy, environmental and nuclear challenges through transformative science and technology solutions.” The Department of Energy has a network of 36 Facility Management Contracts.  They include the following: Office of Energy Efficiency and Renewable Energy Office of Environmental Management Office of Fossil Energy Office of Nuclear Energy Office of Science National Nuclear Security Administration This provides many opportunities for contractors that have energy management capabilities and supplies. The Department Of Health And Human Services The Department of Health and Human Services states its mission “Is to enhance the health and well-being of all Americans, by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services” This is an agency whose need has only increased due to the current pandemic of Covid-19. This agency is a great contracting source for small businesses that provide healthcare services and products. Go to https://www.hhs.gov/grants/contracts/index.html for more information. This agency also does a lot of partnerships, so it is a great way for a small business to get their foot in the door with many other types of government agencies. Department Of Defense The Department of Defense is one of the largest consumers of government contracts in the world? Many companies think that this agency is only contracting with giant companies that supply tanks and missiles. Remember, the Department of Defense supplies the Army, Navy, Airforce, and many other defense agencies. They are very open to working with small businesses and are fully funded for the rest of this year. In fact, they try to reward at least 20% of their contract to Small businesses. Companies can go to https://business.defense.gov/Small-Business/DoD-Small-Business-Offices/ to find out more information about contracting and subcontracting opportunities. Here are just some of the agencies that need everything from educational materials to custodial services: Army Aberdeen Proving Ground Army Contracting Command Army Corps of Engineers (HQ) Navy Marine Corps Installations and Logistics Marine Corps System Command Military Sealift Command Air Force Air Force District of Washington AFLCMC The Federal Emergency Management Agency (FEMA) FEMA is a government agency that handles disasters such as tornadoes, earthquakes,  and hurricanes. They are always hiring government contractors, particularly since much of their work revolves around being able to mobilize a large workforce in a relatively short period of time. These jobs can range from providing temporary housing to the displaced to providing clean water and food to those in need. Go to this site to find out more about small businesses working with FEMA. FEMA is also part of the Department of Homeland Security. This is another agency that has many contracting opportunities. Just go to https://www.dhs.gov/do-business-dhs to learn more about this agency. The United States Department Of Agriculture (USDA) The USDA is in charge of food, agriculture, rural development, and natural resources just to name a few of its responsibilities. They are made up of 29 agencies and have 4,500 locations across the United States and abroad.  Obviously they have a great need for agriculture-based suppliers and services. However, many businesses do not realize that they also have construction jobs, like road repair, for their forestry department. Here is a list of some of their divisions: Environment Management Division Response and Restoration, Sustainable Practices, BioPreferred Property Management Division Real Property, Personal Property, and Fleet Management Procurement Policy Division Policy and Regulations, Acquisition Workforce, and Special Procurement Programs Procurement Operations Division Manages the procurement operation functions to acquire supplies and services for Departmental Management, Staff Offices and USDA Department-wide procurements. Procurement Systems Division Management of USDA’s Automated Procurement System, Integrated Acquisition System (IAS) Safety & Health Management Division Workers Compensation and Safe Working Conditions Credit Card Services Center Purchase, Fleet and Travel Cards Lease Accountability and Strategy Division Peace Corps The mission of the Peace Corps “Is to promote world peace and friendship by fulfilling three goals: 1) to help the people of interested countries in meeting their need for trained men and women; 2) to help promote a better understanding of Americans on the part of the peoples served, and 3) to help promote a better a better understanding of other peoples on the part of Americans.” This agency needs everything from supplies for rural leaving to emergency first aid equipment. Go to https://www.peacecorps.gov/about/open-government/contracts/ and contact the Office of Acquisition and Contract Management with any questions about contracting with this organization. This Is Only The Tip Of The Iceberg There are actually 10 other departments in the federal government that contain hundreds of agencies. These places have a wide variety of needs that can easily be filled by small businesses. Working with one agency often opens the door to other departments, making the scope of opportunities endless. How To Search We highly recommend that you go to FBO.gov (also known as FedBizOpps.gov). This is a centralized search where you can find many types of government contracting jobs from just about any federal agency. Remember SAM To do any business with the federal government, you must register your business in the System for Award Management directory. The government will not hire any type of business (large or small) that has not registered in SAM directory. Please read one of the helpful blog articles on our site like Everything You Need to Know About SAM for Small Businesses.  These blogs will help give you all the information you need to understand how we can help make the process very easy for you. Sam Directory will happily guide you through this often confusing process.

Why Work For The Government? There are many compelling reasons to work for the Federal Government.  We will go into in-depth detail about how a small business can benefit greatly from being a government contractor. Being A Government Contractor Is A Great Way To Make Your Business Stand Out In An Overcrowded Field Business can be very competitive. Working on government projects is a great way to make a mark in an oversaturated market. The government has a great deal of work specifically set aside for small businesses. Also, many small businesses often do not want to deal with the hassle of working with the government, and sometimes there can be surprisingly little competition for a government project. That is why utilizing Sam Directory to handle all the confusing registration requirements is a very smart investment.  The United States Government Is A Very Powerful Client With Deep Pockets The Federal government usually spends around 500 billion dollars a year on goods and services. This makes the U.S. government an extremely attractive client. There are few other organizations with this type of spending power and clout. The government also tends to buy goods and services in bulk. If your business has the infrastructure to handle large orders, then the government can help you grow substantially at an accelerated pace. Government agencies also buy goods and services in large quantities. Large orders can be a double-edged sword for small businesses. However, if managed correctly, they can help you grow substantially and rapidly. Responsibilities of Contractors When you are awarded a government contract, it is vitally important that you read it carefully before signing the document. This might be intimidating since many contracts are very long. However, there are often standard terms that are commonly reused, depending on the complexity of the purchase. Understanding these terms will help you go through the contract more effectively. Make sure you know what government office or agency is administering the contract. This is usually the same office that awarded the contract to your business. However, there can be exceptions. The Department of Defense has a special office that administers all their contracts. You want to make certain that you direct any questions to the correct department. Contract Administration Issues Federal contracts are different from the average commercial contracts. They have general contract provisions that are totally unique to the government. These contract provisions include statutory or regulatory requirements that only apply to the federal government. They include the following: Termination for default  Termination for convenience Contract changes Payments Specifications Inspection  Testing.  These matters are described in the Federal Acquisition Regulations. Termination For Default Government contracts provide that the government may cancel or terminate your contract if: You fail to make delivery within the time specified in the contract; You fail to make progress so as to endanger performance of the contract; You fail to perform any provisions of the contract. You will get the opportunity to cure the defects in your performance or prove why your contract should not be terminated. Your business will also be entitled to payment for items purchased and accepted by the government. The government also has the right to purchase any items that you failed to deliver from other vendors and pass the costs on to you. Your contract will not be terminated for default if you can prove that your failure to deliver is excusable. This means that the issue is beyond your control and not caused by any negligence or fault on your part. If your contract is terminated for default and you can prove that the government’s action was improper, the termination will be treated as one for the “convenience of the government”. Termination For Convenience The federal government can actually terminate a contract for its own convenience even though there is no fault on the part of the contractor. This protects the government’s interest by allowing the government to cancel contracts that have become obsolete or unnecessary. For termination for convenience, the government is required to give written notice of the termination but is not obligated to give you advance notice. This notice will usually direct the contractor to stop all work on the project and place no further orders. You will also have to notify and terminate any subcontractors that were hired for the job. You will also receive instructions on how to preserve and protect what is now government-owned property. After all, this is completed you can prepare a termination settlement claim to present to the government for losses. Failure to stop work can result in great risk and expense. The government will make a settlement to you after the termination of convenience. This settlement should compensate you fully and fairly for the terminated part of the contract. They will also include a modest allowance for profit. Make Sure You Have Your CAGE Code (Commercial and Government Entity) This code is five characters and unique to your business. It’s basically your ID code, and government agencies will identify your business using this code. It is a bit like a social security number for your business. If your business includes more than one facility, then you will need multiple CAGE codes. Each location must have its own unique code, and each location must be registered separately with SAM. Make Sure You Have The Right Staff It is vitally important that government contractors have skilled accounting staff to ensure that the company is in compliance with all policy regulations. The company must have adequate policies and procedures in place for the prevention of mistakes, and especially for their timely discovery and correction. This helps cut down on exposure to accounting errors that jeopardize contractors, inaccurate data, incorrect data entry into the system, or errors in the performance of internal accounting processes. How Do You Get Started Working With The Government? SAM stands for System Award Management. In order to do any business with the federal government, you must register your business in the System for Award… Continue reading Federal Contract Termination-Part 1

The beginning of the decade is a great time for small business owners to get their hands on lucrative government contracts. The Small Business Administration has changed the rules on how to measure what qualifies as a small business. The 2018 Small Business Runway Extension Act will increase the period of measuring annual revenue from three to five years when the business is being evaluated for government contracts. This means a lot more businesses will qualify for small business set-asides. In fact, nearly a quarter of all government contracts have gone to small businesses in the last five years. So What Are The Top Areas For Government Contracting? Here at Sam Directory, we have comprised a list of the hottest areas for contracting with the government in 2020. We want to be one of your main resources for information about this profitable area of business. Cloud Computing More and more companies are doing away with having local servers and personal devices to handle modern software applications. Now more than ever, companies are relying on cloud computing to maintain multiple copies of the data to mitigate instances of security threats, data loss, and data breach. The government is no exception. They understand that cloud computing will lower costs significantly and help them manage their data more efficiently. Small businesses that understand how to utilize cloud computing should be in a very good position to cash in on this new wave of data management architecture. Cyber Security As the world becomes increasingly higher-tech, security breaches are more likely to be in data management than on the battlefields. It is very important for the government to stay several steps ahead of those who wish to exploit undiscovered vulnerabilities in our systems. This is why cybersecurity will be a very lucrative area for government contractors. This is particularly true in 2020, which will be an election year. Cybersecurity will be used to protect voter databases and voting machines. Cybersecurity is also going to be a big part of government protection when it comes to cyberattacks on supply chains. Contractors that can help manage these constant threats to government security will be in high demand. The Department Of Health And Human Services The Department of Health and Human Services states its mission “Is to enhance the health and well-being of all Americans, by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services” This is an agency whose need has only increased due to the current pandemic of Covid-19. This agency is a great contracting source for small businesses that provide healthcare services and products. Go to https://www.hhs.gov/grants/contracts/index.html for more information. This agency also does a lot of partnerships, so it is a great way for a small business to get their foot in the door with many other types of government agencies. Streamlining and Modernizing Information Technology Did you know that the Internal Revenue Service, the Veteran’s Affairs Department, Defense Department, and the Transportation Department are operating on computer systems that are over 50 years old? Some are still using 1970 IBM mainframe computers that store information on floppy disks! This has caused the government to pass the Modernizing Government Technology Act, also known as the MGT. The MGT has authorized that 100 hundred million dollars be allocated to modernizing the federal government Information Technology systems in 2018. Then another 150 million dollars were added to the MGT in 2019. The Consolidated Appropriations Act also then added billions of dollars to upgrade the government’s I.T. systems and update infrastructure. So small businesses that can help the government reduce redundancies, save money, and streamline government technology have a great chance of obtaining very profitable government contracts in 2020 and beyond. 2020 Is A Big Election Year The beginning of this decade will decide a presidential election, one-third of the seats in the senate, and 435 seats in the House of Representatives. This does not even take into account all the local and state-level elections that will be going on across the country. This will be a giant boon for small businesses that can provide the equipment and supplies necessary to make sure all these elections run smoothly. Homeland security alone will be spending 425 million dollars to help protect voting security and privacy. Air And Missile Defense Innovation The United States Army has big plans for developing its air and missile defense system to be one of the best in the world. Lieutenant General James H. Dickinson, commanding general of the U.S. Army Space and Missile Defense Command/Army Forces Strategic Command, said, “Our vision is that the AMD force of 2028 will provide the combatant commanders with a flexible, agile, and integrated AMD force capable of executing multi-domain operations.” The army is particularly interested in modernizing its radar technologies. This is a fantastic opportunity for innovative small businesses to step up to the plate and help the army build some new prototypes. The army is very open to working closely with new businesses in order to develop key technologies that will streamline operations in the future. Blockchain Blockchain allows for the distribution of data on multiple platforms at the same time. It grows as a new set of recordings, referred to as blocks, are added to it. All the blocks contain timestamp information linking it to previous blocks, thus creating a chain. This allows for no data block to be altered without the alteration of all the blocks that came before it. The government is interested in blockchain data management because it is decentralized and allows for more security for transactions. This usually also means that operating costs can be lower. The United States government became interested in blockchain technology in 2016 and it should be a very lucrative avenue for many small businesses.  Innovation OTS is a five-year program that will continue in 2020. It aims to provide opportunities for nontraditional government contractors to work with the Department of Homeland… Continue reading Government Contracting Trends for 2020

Advantages The United States Government Is A Very Powerful Client With Deep Pockets The Federal government usually spends around 500 billion dollars a year on goods and services. This makes the U.S. government an extremely attractive client. There are few other organizations with this type of spending power and clout. The government also tends to buy goods and services in bulk. If your business has the infrastructure to handle large orders, then the government can help you grow substantially at an accelerated pace. Government agencies also buy goods and services in large quantities. Large orders can be a double-edged sword for small businesses. However, if managed correctly, they can help you grow substantially and rapidly. Small Businesses Are Given Special Consideration When It Comes To Government Contracts In many markets, small businesses are often outcompeted by larger organizations that often have access to almost unlimited resources. This set aside actually might increase a small business’s chances of winning a lucrative bid. The federal government is required to set aside at least 23 percent of its total spending specifically for small businesses. Several small businesses have made a fortune just on federal government contract awards. Important Laws Section 8(d) of the Small Business Act and, in most cases, FAR 19.7 incorporate several laws regarding small business subcontracting. These laws require prime contractors to provide subcontracting opportunities to small businesses. This includes: HUBZone small business  Small disadvantaged business  Women-owned small business  Veteran-owned small business (VOSB) Service-disabled VOSB So the government requires that on contract over $500,000 or a million when constructing a facility that is public, that large prime contractors must turn in plans for subcontracting percentage goals for small business, HUBZone small business, small disadvantaged business, women-owned small business, VOSB, and service-disabled VOSB. These plans must describe in detail the methods used to make sure that small businesses have a fair chance to compete for government contracts. This is required to be submitted for review prior to the award of any government contract that meets this threshold. If a prime contractor fails to comply with this regulation then they might be subject to liquidated damages or termination for default. This rule does not apply to contracts that are under the prescribed dollar amount, contracts that are going to be completed fully outside the United States of America, contracts that have no subcontractor opportunities, and small businesses. Government Contracts Offer Security In These Uncertain Times. Covid-19 has halted a lot of different industries. However, the government must continue to move forward for the health and welfare of its people. Government contracting can be a shining light in the pandemic darkness and provide a lifeline to many struggling businesses who are trying to survive this unprecedented situation. You should remember that government agencies are in need of goods and services in a year-round capacity. This makes them one of the few consumers that are actually recession-proof and a great source of steady reliable income. Are There Any Other Advantages For A New Business To Registering For The SAM Directory Besides Government Contracting Opportunities? A business has to be registered with SAM before they can begin to apply for valuable federal grants. What Is A Federal Grant? A grant may be a way the government funds your ideas and projects to provide public services and stimulate the economy. Grants support critical recovery initiatives, innovative research, and lots of other programs within the Catalog of Federal Domestic Assistance (CFDA). The following are the steps to apply for a grant: Step 1: Obtain a DUNS Number Step 2: Register with SAM Step 3: Register with Grants.gov Disadvantages High-Level Security and Background Checks It is important for government contractors to be able to pass several security clearances. A background check on your company and employees is often a condition of employment. This will include the following: Employment Education Criminal Records Credit History Motor Vehicles and License Records You should make sure that all your personnel and employees are able to pass this intensive screening. If there are any issues, make sure the government is made aware of it ahead of time, so that an explanation can be given. For example, if you are participating in programs that rehabilitate criminals by giving them jobs. Transparency is often the best way to deal with situations that might cause an issue in obtaining lucrative government contracts. Certification and Education Usually, the agency sets specific educational and certification guidelines when they post a request for proposals or RFP. These requirements can vary depending on the type of work that is needed. However, there are some steps that any business can do to become more attractive for government contracting work. Understanding Audits Your company should be clear on what the DCAA considers the responsibilities of federal contract actors. They include the following: timeliness of payments to subcontractors documentation of contractor oversight of subcontractors documentation of enforcement of flow downs documentation of support for subcontractor billings documentation of subcontractor reviews Federal government agencies receive their funding from taxpayer dollars and they need to justify their spending in order to prevent waste. We will help you make sense of government accounting so you can develop a methodology that works for you and your business. How Do You Get Started? Make Sure You Have Your CAGE Code (Commercial and Government Entity) This code is five characters and unique to your business. It’s basically your ID code, and government agencies will identify your business using this code. It is a bit like a social security number for your business. If your business includes more than one facility, then you will need multiple CAGE codes. Each location must have its own unique code, and each location must be registered separately with SAM. SAM Directory Can Help Remember, registering for the SAM directory gives a business automatic entry into the extremely lucrative marketplace of the federal government. It is also a crucial step for applying for rewarding government grants that can help your business reach its full… Continue reading The Advantages and Disadvantages Of Being A Government Contractor

One of your first important decisions when starting a business is deciding what type of business entity best suits your needs. The business entity you choose can have serious consequences regarding liability and taxation. This article will help you better understand your options. What is a business entity? A business entity is a corporation created by one or more natural persons to hold on a trade or business. The following are types of business entities: Sole proprietorship: Unincorporated business with one owner or jointly owned jointly owned by a marriage General partnership: Unincorporated business with two or more owners Limited partnership: Registered business composed of active, general partners and passive, limited partners Limited liability company: Registered business with limited liability for all members Professional limited liability company: LLC structure for professionals, like doctors and accountants C-corporation: Incorporated business composed of shareholders, directors, and officers S-corporation: An Incorporated business that is taxed as a pass-through entity Professional corporation: Corporate structure for professionals, such as doctors and accountants B-corporation: For-profit corporation that is certified for meeting social and environmental standards Nonprofit: Corporations: Formed primarily to benefit the public interest rather than earn a profit. What is personal liability? Personal liability means that your personal assets are exposed if one of your co-owners or employees commits an unlawful action that injures someone, such as writing a defamatory article or post. If there is a judgment against your company, it can be satisfied by reaching into your bank account, home, or automobile simply because of your status as an owner of the business. Sole Proprietorship If your business is going to be fairly small a sole proprietorship might be the right business entity for your needs. You, as the owner, will be in control of all business decisions and profits. You will also only be taxed one time on all business profits. The greatest disadvantage of a sole proprietorship is that there is an unlimited liability. This means that you will be held personally responsible for all the business debts and losses. This is great for the type of person who truly enjoys independence and wants to make their own rules without answering to others. You are your business and are okay with there being no formal division. Partnership A partnership is similar to a sole proprietorship except that there is more than one individual that owns the business. The liability of the partners for the debts of the business is unlimited. Each partner is ‘jointly and severally’ responsible for the partnership’s debts; that’s , each partner is responsible for their share of the partnership debts also as being liable for all the debts of the business. This means that you can be held responsible for your partner’s neglectful actions. If you are someone who enjoys working with a team and does not want to shoulder all the responsibility for the business yourself, a partnership might work for you. If you have the right blend of personalities you can complement each other quite well and be stronger than any of the partners could ever be on their own. Limited Partnership A limited partnership contains two distinct types of partners: General Partners Limited Partners The general partners run the day to day activities of the business. The general partners are also personally liable for a business’s debts and liabilities. The limited partners do not have much to do with the way a business is run. They have limited liability concerning a business’s debts and they usually pay fewer taxes regarding the profit. The limited partners can be looked upon as silent investors. If you want to retain primary authority in your business but definitely could use some other sources of cash than a limited partnership would be a great compromise. C-Corporation A C-corporation (c-corp) is when the business is considered separate from its owners and operators.  A c-corp consists of shareholders (the owners), a board of directors, and officers who have control over the corporation. One person can fulfill all these functions. The great advantage of a c-corp is that the owner/owners are not personally liable for the debts and liabilities of the company. The disadvantage is that there is double taxation on profits. First, the corporation is taxed as a separate entity and then you are again taxed on the profits in your own personal taxes. This is a great model for those who really want to start a business that is quite large in scope and size. However, you will be answerable to your shareholders for good and bad outcomes of your business decisions. S-Corporation If your corporation has fewer than 100 shareholders who are all individuals, not corporations; have only one class of stock, and be owned by U.S. citizens or resident aliens you could turn your business into an S-Corporation (s-corp). An s corp is not subject to double taxation as a c corp is. That means that an s corp’s revenue is not taxed at the corporate level. It is only taxed when paying out as salaries or dividends to shareholders. An s-corp is often a better choice than a c-corp for most small businesses.  It should also be noted that corporations have a lot of regulations regarding paperwork and documentation. This is not an entity for you if you want to be footloose and fancy-free. Limited Liability Company (LLC) Limited Liability Companies are extremely popular among many business owners because they often combine the best both worlds when it comes to liability and taxation. These hybrids clear their owners of personal liability for the business’s debts or liabilities. They also allow you to actually choose whether you want your LLC to be taxed as a partnership or as a corporation. At the end of the day, you are the one who should decide what business entity best suits your needs. Make sure you consider important factors like taxation and liability. You should also go to your secretary of state’s website to find out what it takes to formally… Continue reading Choosing the Right Business Entity for Your Business

A Powerful Client The United States government is one of the most powerful consumers of goods and services in the world. This is a 500 hundred billion dollar industry that is required to set aside at least 23 percent of these contracts specifically for small businesses. Subcontracting Is An Excellent Way To Get Started Perhaps you are a little intimidated by the prospect of working with the government. You would like an ideal scenario where you can ease into the lucrative business of government contracting and be able to pick things up at your own pace. Subcontracting is a fantastic way for you to ease into government contracting at your own pace but still take part in the multi-billion dollar marketplace.  What Is A subcontractor? A government subcontractor is defined by Federal Acquisition Regulation (FAR) 3.502-1 as: Any person, other than the prime contractor, who offers to furnish or furnishes any supplies, materials, equipment or services of any kind under a prime contract or a subcontract entered into in connection with such prime contract and includes any person who offers to furnish or furnishes general supplies to the prime contract or a higher tier subcontractor. A prime contractor contracts directly with the client, which in this case is the federal government.  The subcontractor would enter into an agreement with the prime contractor (prime) to provide goods and /or services to the prime for them to be able to fulfill the requirements of the original government contract. This is an excellent opportunity for the subcontractor to gain valuable experience with government contracting and build their reputation with various government agencies. Useful Definitions Prime contractor — The business wins to bid for a contract with the government. Higher-tier subcontractor — a subcontractor that also contracts other subcontractors to perform services or provide supplies in order to complete work for the contracts they have entered into with prime contractors. Consultants — It is easy to confuse consultants with subcontractors. Consultant services are defined by Federal Acquisition Regulation (FAR) as “rendered by persons who are members of a particular profession or possess a special skill and who are not officers or employees of the contractor. Examples include those services acquired by a contractor or subcontractor in order to enhance their legal, economic, financial, or technical positions. Professional and consultant services are generally acquired to obtain information, advice, opinions, alternatives, conclusions, recommendations, training, or direct assistance, such as studies, analyses, evaluations, liaison with Government officials, or other forms of representation.” How Does A Small Business Become A Subcontractor? One of the first things that one needs to do is to be registered with  SAM. SAM stands for System Award Management. To do any business with the federal government, you must register your business in the System for Award Management directory. The government will not hire any type of business (large or small) that has not registered in SAM directory. Please read one of the helpful blog articles on our site like Everything You Need to Know About SAM for Small Businesses.  These blogs will help give you all the information you need to understand how we can help make the process very easy for you. Sam Directory will happily guide you through this often confusing process. Do Your research Search on the internet to see if the agency that your business is interested in has a subcontracting opportunity directory. Some agencies, such as the Department of Defense, has a directory that is specifically intended for small business. Outreach Events There is nothing better than good old fashioned networking to make the connections needed in order to get subcontracting opportunities. There are many outreach events across the country in which contractors solicit contracting work. Here is a listing of events: International Contracting Week – Las Vegas 2020 Attendees will be exposed to a wide range of legal and compliance issues that impact their businesses and ultimately affect their organizations’ bottom lines. Courses offered during International Contracting Week are relevant to personnel in a wide range of functions, including contracts, procurement, compliance, legal and risk management. This weeklong conference is: Federal Subcontracting for Primes and Subs200 Attendees will understand the rights and obligations relating to subcontracting performance and management that result from government contract terms and conditions and the FAR and will develop the skills necessary to use and maintain these rights during subcontract performance and management, beginning with the development of technical, quality and delivery requirements through a clear and mutually agreeable statement of work. Earned Value Management & EVM System Fundamentals The EVM and EVMS Fundamentals Workshop is designed for professionals and organizations who are new to earned value management (EVM) concepts and requirements. It will also be useful for those who are considering bidding on contracts that will have an EVM reporting and system requirement. Attendees will gain a better understanding of the requirements as well as the level of resources and effort required to implement a system.  Does Your Business Qualify For Set-Asides? If at least 51% of your business is owned by a minority, woman, or veteran then your business might be eligible for set-asides reserved for underrepresented groups. Does your business meet the following criteria: A business must meet small business size standards. At least 51 percent of a business must be owned by U.S. citizens. The business officers must show good character. The business must demonstrate the potential for success. There are separate eligibility requirements for businesses owned by American Indians, Native Alaskans, Native Hawaiians, Woman, Veteran or Certified Development Companies.  At least 51 percent of a business must be owned, controlled, and managed by one or more person(s) who meet the SBA requirements for being socially disadvantaged and economically disadvantaged. Make Sure You Have The Proper Documentation It is important to make sure that all of your licenses and liability insurance paperwork is in order. Prime contractors favor subs that are organized and run on precision. Also, prepare a Capability Statement. This is the marketing one-pager you need… Continue reading What Is A Government Subcontractor?