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Selling to the government

The 2023 GUAGE Report: Illuminating GovCon Industry Best Practices

For government contracting companies, keeping pace with industry trends and best practices is crucial. How do other companies in your sector operate? What strategies lead to success? How can you ensure project success, compliance, and business growth? Fortunately, a recently unveiled report can provide the answers. (GovCon Wire September 12, 2023)

For seven consecutive years, Unanet and CohnReznick LLP have collaborated to gather insights from GovCon organizations across the industry. The result is the GAUGE Report, and the 2023 edition is now available for free download. (ibid)

Understanding the GAUGE Report

The GAUGE Report serves as an annual industry roadmap, offering benchmarks, trends, and insights tailored to GovCon companies and executives. This comprehensive guide provides a window into the current market landscape, best practices, and forecasting techniques. (ibid)

Each year, Unanet conducts surveys involving GovCon organizations of various sizes and missions. In the 2023 edition, responses from over 1,100 GovCon executives and management were analyzed to uncover prevailing trends and best practices. The report’s name is derived from an acronym representing key focus areas for government contractors: Government contract compliance, Accounting, Utilization, Growth, and Efficiencies. (ibid)

Leveraging Benchmarking and Best Practices

The GAUGE Report serves as a valuable yardstick for GovCon businesses. It allows companies to establish relevant benchmarks for evaluating their performance and progress. By comparing their practices against peers, organizations gain insights into how they measure up and where improvements may be needed. (ibid)

The report also provides an overarching view of the current GovCon market and business environment. This perspective enables companies to align their strategies with industry trends effectively. (ibid)

The Key Takeaway: Leading Through Forecasting

The central theme of the 2023 GAUGE Report is the pivotal role of accurate forecasting and planning for GovCon firms’ success. It underscores the importance of precise forecasting, resource efficiency, service/product diversity, and contract versatility. (ibid)

For small and medium-sized GovCon companies, strengthening long-term planning by investing in infrastructure, understanding their pipeline, embracing technology, and seeking expert guidance is essential. The report also highlights the significance of indirect rate and return on investment forecasting. It addresses challenges in timekeeping and billing for SMBs compared to larger revenue companies and advocates for the adoption of a formal capture process for federal proposals. (ibid)

Key Insights from the GAUGE Report

Here are some noteworthy findings from each of the GAUGE Report’s topic areas:

Government Contract Compliance

  • 51% of respondents reported stable government oversight, while 46% noted an increase in oversight in the past five years.
  • Indirect rates were identified as a common audit challenge for government contractors.
  • Business systems, particularly accounting systems, played a crucial role in winning solicitations. (ibid)

Accounting

  • The most common days sales outstanding (DSO) range among respondents was 31 to 45 days.
  • Smaller GovCon firms had shorter invoice cycles.
  • Mergers and acquisitions remained active, with 36% of respondents prioritizing M&A in 2023. (ibid)

Utilization

  • 61% of GovCon executives reported mature resource management disciplines.
  • Centralized project management offices (PMOs) gained popularity, reflecting the trend toward standardizing project management practices.
  • Projects were typically delivered on time and on budget. (ibid)

Growth

  • Personal relationships and market intel tools were the preferred avenues for discovering new opportunities.
  • Firms with a formalized capture/gate process had a competitive advantage in pursuing suitable opportunities. (ibid)

Efficiencies

  • 41% of GovCons changed their indirect rate structure in the past 12 months.
  • Fluctuating indirect costs emerged as a challenge for many firms. (ibid)

Using the GAUGE Report Findings

Understanding the latest trends in your industry is valuable, but what’s next? To capitalize on this knowledge and enhance your business:

  1. Download and Review: Access the full 2023 GAUGE Report to gain in-depth insights that can serve as a roadmap to success. The report offers a wealth of data to inform your strategies. (ibid)
  2. Benchmark and Apply: Use the GAUGE Report for benchmarking against industry standards and applying best practices. This knowledge empowers your GovCon business to excel in various areas. (ibid)

Would you like to use insights from the GAUGE Report, to gain a competitive edge and achieve higher performance? Give us a call.

SBA Halts New Applications for 8(a) Program: What You Need to Know

The Small Business Administration (SBA) has put a temporary hold on accepting new applications for the 8(a) small business program. This move comes in the aftermath of a significant court decision that found parts of the program unconstitutional. (Washington Technology August 21, 2003)

The crux of the matter lies in the SBA’s utilization of the “rebuttable presumption” process, which allowed many companies to be certified as small, disadvantaged businesses without substantiating their social disadvantage. However, a recent court case, involving Ultima Services, a non-8(a) company, challenged this process. The court ruled in favor of Ultima Services, asserting that the use of rebuttable presumption violated their Fifth Amendment rights. Consequently, the SBA has been compelled to halt the acceptance of new 8(a) program applications. (ibid)

If your company was certified through the rebuttable presumption process, there are specific actions you must take to continue in the 8(a) program. The newly released guidance requires affected businesses to submit a “Social Disadvantaged Narrative.” This narrative should encompass the identities forming the basis of your social disadvantage, detailed accounts of discriminatory incidents related to education, employment, or business history, including dates, locations, parties involved, conduct details, and motivations behind the bias or discrimination. You should also elucidate how these incidents impacted your business progression. (ibid)

Existing applicants can proceed with their applications, though additional information might be needed. For those already within the 8(a) program, the narrative submission is not obligatory if previously completed. (ibid)

SBA is closely collaborating with the Justice Department to chart the course ahead in response to this court decision. Despite the temporary suspension of new applications, the agency is working on directives for agencies to continue awarding contracts to 8(a) firms. (ibid)

Remember, this situation is evolving. A hearing on August 31st could bring about changes, and SBA’s forthcoming guidance for contract awards to 8(a) firms remains eagerly anticipated. Furthermore, it’s important to note that the court’s ruling doesn’t affect 8(a) firms owned by Alaska Native Corporations or tribally-owned entities. They can continue business as usual. (ibid)

Stay tuned for updates as this story unfolds, and ensure you’re up to speed on the latest developments in the 8(a) program landscape. Should you have questions concerning the newly released guidance requirements, give us a call.

Prohibited telcom equipment may cost you

The General Services Administration’s (GSA) Office of the Inspector General (OIG) published a new report highlighting GSA’s failure to address prohibited telecom items on its Multiple Award Schedule (MAS) contracts. The report states that this puts customers at risk of unauthorized surveillance by foreign adversaries. In 2017 and 2018, Congress passed laws prohibiting the procurement of certain telecom and video surveillance services from specific entities, with FAS responsible for ensuring compliance. However, the OIG report reveals that FAS’s reliance on contractor self-certifications and the Prohibited Products Robomod process is inadequate in preventing the inclusion of prohibited items on MAS contract price lists. (MerriTalk July 11,2023)

The report also identifies FAS’s shortcomings in taking sufficient action against contractors violating Federal Acquisition Regulation (FAR) restrictions, as well as the lack of a process to notify customer agencies about purchases of prohibited telecom items. Furthermore, FAS initially failed to comply with FAR requirements by not including subsidiaries and affiliates of named entities in their efforts to identify prohibited items on MAS contracts. To address these issues, the OIG has made five recommendations to FAS Commissioner Sonny Hashmi, including strengthening controls and implementing more stringent consequences for non-compliant contractors. (ibid)

This report from the GSA’s OIG follows the release of the Federal Communications Commission’s (FCC) “Covered List,” which prohibits the sale of telecom network equipment and services from certain China-based providers due to national security concerns. The FCC’s ban aims to safeguard the nation’s communications networks and enhance the security and resilience of the domestic supply chain. These efforts reflect the commitment of both agencies to protect national security and mitigate risks associated with unauthorized telecommunications equipment and services. (ibid)

Questions about prohibited telcom items? give us a call.