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Archive for month: May, 2015

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Market Research—Searching Federal Contract Databases Still Yields Valuable Data

May 7, 2015/in /by

JP Richard, SJ&A

Working on a recent project for a client, I am reminded of how important it is to use Federal contract databases to understand your market. They can provide valuable information about where your clients are spending their dollars, who your competitors are dealing with, when contracts are due to expire, and even which purchasing offices of an agency is doing the buying. It may take a few passes through the data to become familiar with all of the items and formats in the databases, but the effort is well worth it.

There are two free sources that we recommend:  (1) The USASpending.gov site is available simply by accessing the web site, and (2) the Federal Procurement Data System (FPDS.gov) requires only registration and a user ID to log in. It is advisable to look at both databases because I found that the USASpending.gov site contains better data on DoD spending than the FPDS site.  It appears that DoD does not post everything to FPDS.

The best way to use the data is to start with easy searches provided by the site, then download more detailed data into an Excel spreadsheet to do further analysis on it. It is good to use both USA and FPDS sets of data to validate one against the other.  If there is a big discrepancy, there must be some data errors somewhere that you should identify. I found, for example, that USASpending data records obligation data when a contract is first awarded as well as contract actions as they occur—leading to the double reporting of dollars. This can be identified in the detailed data and can thus be accounted for in your analysis.

Another good validation tool is to compare what the databases say about your own organization’s revenues with the actual revenues you experience with a given client. If there is a big discrepancy, you can assume that the error in reporting is consistent with other contractors, and you should factor the database data up or down accordingly in your analysis.

If you would like to discuss ways in which we can support your market research needs, contact JP by e-mail at jp@sidjaffe.com or call him at 703-568-6417.

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The Complications of Benefits and Pay Issues for Government Contractors

May 7, 2015/in /by

Alan Luba, Human Resources Consultants LLC

During my more than 30 years as an HR Executive with government contractors, I’ve seen a lot of simple and complicated benefits and pay issues.  I’m still amazed at some of the complicated ones, and, especially the simple ones that are made complicated by employers working with bad assumptions and/or too little valid information.  A few examples are discussed below.

Benefits Eligibility.  Many employers, Government contactors in particular, are not aware that if they want their health and welfare employee benefits plans to maintain their “qualified” status – that is, funded through pre-tax premium deductions – they must include all eligible employees – or, all full-time employees. Full-time employees are defined as anyone working at least 30 hours per week, as of Jan 1 2015, for most companies.  I still see employers who try to lower their fringe rate by arbitrarily – and incorrectly – excluding some highly compensated, exempt people from these plans.  The liabilities here include:

  • Loss of “qualified” status and subsequent loss of the pre-tax premium benefits for employees, which, does not enhance employee relations
  • Complaints by employees which may lead to investigations by DCAA, the Department of Labor, or the IRS
  • Damage to the employer’s competitiveness in the labor market
  • Non-compliance with the Affordable Care Act starting next year.

While this focus on lowering the fringe rate, and therefore the bid rate, may look good on paper, the potential liabilities can cost more than this practice is worth.  HR can contribute here by closely monitoring benefits utilization and by working pro-actively with good benefits brokers and providers to plan for the long term.

Exempt – Non-Exempt.  Many employers, again, especially within the government contracting community, misclassify employees in terms of their eligibility for overtime pay.  Let’s be clear, no employer can arbitrarily make these decisions.  The Federal Fair Labor Standards Act (FLSA) and the subsequent supporting regulations established by the Department of Labor, the IRS, and by Federal courts, are the governing factors.  The boss can’t decree that everyone in the company is Exempt from receiving overtime pay, in order to save money or to have a better competitive bid rate. Miss-classification may result in a time consuming IRS audit of your last three years of payroll records, fines, penalties, back pay, and more.

So, make sure that your HR Department has reviewed all of your labor categories and recommends the appropriate classifications.  This is how to save money in the long run!

To discuss benefits and pay issues, contact Alan at alan@hrconsultantsllc.com or phone him at 703-937-7837.

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Qualification for Capture

May 7, 2015/in /by

Steve Bruce, SJ&A

Let’s face it, capture management and proposal development are expensive—and getting more so. Government budgets are getting tighter; competition is fiercer. Something has to give or your win rates are headed south. All of our clients are working hard to make capture more efficient and proposal development more effective. At SJ&A we can certainly help you with capture coaching and implementation, as well as proposal support and training. However, one of our clients—a mid-sized government contractor—is facing these challenges a bit differently. They are focusing on their pre-qualification and qualification stages of their pipeline harder. Why? Here is what they discovered.

A revealing metric directly tied to their win rate is that their win rate for larger opportunities ($75M+) goes up demonstrably when their capture exceeds 9 months; one year is even better. They recognized that they were severely limited in resources and budget to accomplish all of the capture initiatives that they had identified. The solution? Decrease the number of opportunities in capture, but increase their quality. To use a fishing analogy, go upstream to where the bigger fish are and be selective in the fish you go after. When doing opportunity analysis, a firm has to measure the probability of success against the cost of capture and proposal resources.

Initial and full qualification for a bid can be a predicative formula for a company in making strong capture decisions. SJ&A supports this client with our Qualification for Capture (Q4C) process and tool. We work with customers to provide an initial set of scored ranking factors—tailored for their environment and goals—to qualify opportunities as they progress during step or gate reviews.

As a client, we can walk you through the Q4C process, leaving you with a tool to use independently on all opportunities in your pipeline. Eliminate your “gut reaction” response to capture/no-capture decisions, and move through the bid process predictably. If you would like to discuss the Q4C approach, contact Steve Bruce at steve@sidjaffe.com or call Steve at (703) 989-2799.

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