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Selling to the government

Federal contractors minimum wage reset

Federal contractors enjoyed a minimum wage raise on January 1, 2021. This was the first increase since President Obama was in office. Even so, on April 27, 2021, President Biden signed EO 14026, raising the hourly minimum wage to $15 ($10.50 for tipped workers.) The United States Department of Labor published Field Assistance Bulletin (FAB) No. 2022-1 clarifying the requirements of EO 14026. (JD Supra January 17, 2022)

The four categories of contracts covered are:

  • Procurement contracts for construction covered by the Davis-Bacon Act (DBA).
  • Service Contracts covered by the Service Contract Act (SCA).
  • Concessions contracts.
  • Contracts entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public. (ibid)

The FAB includes all 50 states, Washington DC, Puerto Rico, and the Virgin Islands. It also includes the Outer Continental Shelf Lands as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Wake Island, and Johnston Island. (ibid)

EO 14026 covers workers whose wages are governed by the FLSA, SCA, or DBA and are employed on or in connection with a covered contract. (ibid)

In addition to the increase in minimum wages, the FAB supplies information on worker notice requirements, subcontractor requirements, recordkeeping requirements, and anti-retaliation provisions and remedies. The FAB also requires contracting agencies to incorporate all applicable EO contract clauses into covered prime contracts and flow down to subcontractors’ contracts. (ibid)

Questions about the Field Assistance Bulletin (FAB) and its requirements? Give us a call.

Are you a MAS contractor or want to be one?

GSA is working to make it easier for prospective and current Multiple Award Schedule contractors to work with them. They have recently launched a new and improved Vendor Support Center (VSC).

According to eBuy’s Senior Program Analyst Rich Carlson, “our goals for this website overhaul were three-fold. One, we wanted to modernize the bedrock technology and make security enhancements, which aligns with VSC with other websites we’ve updated like GSA Advantage!. Second, we prioritized improving the user experience. And third, we needed to make business process improvements so the website is easier to maintain.” (GSA Blog January 12, 2022)

For the VSC update, GSA went straight to industry. An RFI was released in November with site navigation, help desk availability, and plain language as the main areas of focus. Based on the information obtained from feedback the VSC is searchable content takes less time and is much easier to find. The dynamic search function allows users to see all content when a word or phrase is entered into the search box. (ibid)

Another benefit of the VSC update is the ease of finding help desk information. The home page contains three types of locators for users individual Procurement Contracting Officer (PCO), Administrative Contracting Officer (ACO), and Industrial Operations Analyst (IOA). (ibid)

VSC site navigation is organized by: “I Want a Contract,” “Managing my Contract,” and “Contract Sales.” In addition, the new page “MAS Project Center,” stores resources for all MAS special projects. (ibid)

GSA is continually looking for ways to improve the customer experience and make it easier to do business with them. The new VSC is located at vsc.gsa.gov/vsc/. (ibid)

Questions about the new VSC or how to get started on your journey to a contract with GSA? Give us a call.

Back to Basics

If you are a long-time government contract holder or just beginning your government contracting journey, it is helpful to know the various forms of government contracts. According to GovCon Wire, these are the following 5 categories of government contracting.

Fixed-Price Contracts

The pricing of a fixed-price contract never changes. All risk is borne by the contract. The vendor works with what is provided by the government

Indefinite Delivery & Indefinite Quantity Contracts

Sometimes an agency isn’t exactly certain of its requirements. An agency may not know the exact amount of material or length of time required by a vendor to offer a service. Because of this, these are adaptable government contracts. They may also be called Task Order Contracts or Delivery Order Contracts.

Time & Materials Contracts

The contracting agency establishes a per-hour labor rate, evaluates materials costs, and puts in place a price ceiling. Vendors who find they can deliver services within a budget will find this an appealing option. Often contracts for emergency services are short-term. The contractor will deliver only labor and are called labor-hour contracts.

Cost Reimbursement Contracts

This form of contract tends to place greater risk on the government agency. This form of contract tends to lean towards research and development as opposed to actual goods or services. There are various cost-reimbursement contract subcategories, including cost/cost-sharing, cost-plus-fixed-fee, cost-plus award fee, and cost-plus incentive fee.

Incentive Contracts

This form of contract is actually based on a cost-reimbursement contract or a fixed-price contract, with added incentives. A government agency may award an incentive cract to a business who can complete a project swiftly. If the vendor completes the project ahead of schedule, the vendor may be eligible for an incentive (bonus). (GovCon Wire October 2021)

Do you have questions or need assistance with a government contract? Give us a call.

Tech is hot!

While tech procurements have been on the rise over the past several years, COVID most definitely fueled the flame. According to data from an analysis by Jeff Cook, managing director at Shea & Co., third-quarter 2021 tech deals hit nearly $2.2 billion. With much of that activity from strategic acquisitions. Government Technology, January/February 2022

The new year will likely see both large and smaller acquisitions continue with all being potentially significant. Cook expects, “the acquirers who’ve been active will continue to be active.” (ibid)

Apart from acquisitions, other factors have also fueled the growth. Although there is an abundance of bureaucracy in the government, the government is a stable source of sales and returns. While other areas of the economy may slow, the Government, both local and federal, will continue to operate. This coupled with the need to constantly update their tech requirements make the government a top contender for igniting tech growth. (ibid)

Another factor is the move toward cloud computing and software as a service. Google Announced in November of 2021, the launch of a cloud-based “sandbox” named RAD Lab. It is an instrument public agencies might use to test and develop their specific tools. As an added perk, Google provides support in a secure environment. (ibid)

Surveys of both cities and counties by The Center for Digital Government’s, in 2021, show greater movement to the cloud. Approximately one-third of cities report that about 30 percent of their systems and applications reside in the cloud. County migration is about 26 percent. Therefore, while movement is toward the cloud, there is an opportunity there that has yet to be tapped. (ibid)

Google is not the only game in town. Amazon is looking to take a piece of this market, as well. This shows how big tech is looking to add to their revenue from the gov tech space. (ibid)

According to Stewart Lynn, a partner at Serent Capital who leads gov tech practice, “many private-sector folks are finding new roles within government and have understood that the current systems in place are very antiquated and in need of an upgrade. As citizens have become more active online, you’re seeing governments being responsive to their citizens’ needs. Citizens today want the ability to go online and buy their permits, process their payments, understand what’s going with budget spending. And governments are responding to that demand by investing in digital solutions.” (ibid)

As with all new growth, comes a few hurdles and grey areas. According to Rita Reynolds, chief information officer for the National Association of Counties, “government technology vendors must be willing to update their terms of service and contracts to accept their responsibility and ensure that baseline essential security practices are in place to secure what they are hosting and providing to counties.” (ibid)

For counties, states, and the federal government, there’s a need for some flexibility within the procurement arena. An updated acquisition process and partnering with the private sector will go a long way to make this a win-win for both the government and vendors.

Trying to break into the government contracting arena? Give us a call.

How to find the perfect partner – in government contracting

The government contracting arena is not only tough to navigate but also highly competitive. Many businesses turn to business partnerships to better align their products and services to meet the requirements of the government. While there are many forms of business partnerships, the most common are subcontracting, joint ventures, and contractor team arrangements.

Subcontracting is the most popular form of partnership in government contracting. Generally, a prime contractor (possibly with an established government presence) looks for a small business entity to assist with a government contract. This type of partnership works particularly well for a small business trying to “break” into government contracting. Govconwire December 20, 2021

Another form of partnership is a joint venture. This is when a small business especially those under the Small Business Administration’s mentor-protege program form a partnership to execute specific tasks within a government contract. Small businesses will integrate their specific skills to perform under contract guidelines. (ibid)

The third type of partnership is the contractor team arrangement (CTS). This is when two or more businesses, all with GSA Schedule contracts, come together to work on very specific government contracts. (ibid)

There are several ways to meet prospective partners. There are government contracting events, sponsored by businesses and on occasion, the government. Government websites, also publish various subcontracting opportunities, such as eLibrary, SubNet, the SBA Directory of Federal Government Prime Contractors with a Subcontracting Plan, and the Department of Defense’s Subcontracting Opportunity Directory. (ibid)

Being prepared when pitching a potential business partner is the most effective way to learn whether or not the partnership will work for both parties. Knowledge of your potential partner is key, company background, products and services offered, benefits to both parties, and a product demonstration all help to determine if the businesses are the right fit to work together. (ibid)

It can be hard to know if two companies are right for each other. One way to determine a good fit is to work on a project together before heading into the government arena. Look at their performance under pressure. Did they handle expectations well? Did the pressure cause hiccups in performance? Did communication take place or were there bottlenecks? These are just a few questions to be answered when determining whether a business relationship will be positive as well as productive. (ibid)

Finally, is there a commitment from both parties? Like any lasting, strong relationship, there must be dedication on both sides to make the partnership work.

Struggling to get your first government contract? Looking for a business to partner with? Give us a call.

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