Whether its sequestration or the continuing rhetoric from both sides of the aisle surrounding government spending cuts, it’s clear that we have entered a new era in government contracting focused largely on cost savings and efficiency in government contracting. Your company’s ability to continue to grow will be measured largely by your ability to provide products and services at a lower cost than your competitors. Government procurement awards continue to be measured against the best value for the government customer, but when you look at the field of competitors, you see competing companies with the same past performance and very similar technical capabilities, which results, more often than not, that best value is defined as lowest cost.
What can you do to remain competitive in this environment, and even continue to grow your business base?
Incurred Cost Submissions
The continuing backlog of incurred cost audits, and failure of DCAA to make any meaningful traction in closing the over $500 billion and growing backlog of incurred cost audits means that you will be continually supporting open year submissions dating back over 5 years. There is somewhat of a silver lining to this in the recent Raytheon decision (ASBCA Nos. 57576, 57679 (Dec. 17, 2012)), which we discussed in our February newsletter. Read More
Internal Audit and Compliance Functions
The average cost of a compliance or internal audit staff member can easily exceed $150K-$200K in a given year when you factor in the cost of salary, benefits, equipment and facilities costs necessary for them to do their job. Unfortunately, this cost is a necessary evil of doing business with the government, because the alternative is likely facing a litany of questioned costs and cost withholds as a result of the new DFARs Business Systems Rules. Read More
Indirect Rate Strategy Assessments
For years contractors have relied on the same basic models for the allocation of indirect cost, but in this time of constricting budgets it is critical to evaluate your indirect rate structure to ensure it is providing your company with the highest competitive advantage. Our staff members are experienced with industry norms and can provide your company with a competitive assessment of where your wrap rate stacks up against others in the industry. Read More
Claims & Terminations
As we continue to proceed through this period of uncertainty we are seeing numerous requests for changes, de-scoping and terminations for convenience as a result of the continuing budgetary pressures. It is critical during this time that your organization has in place an efficient method of addressing contract changes and terminations. Read More
Targeting New Opportunities
In our role as strategic advisors to over 400 clients throughout the United States we have had the opportunity to work with some of the best business development professionals in the industry. A key result of this exposure is the realization that while most government agency budgets are shrinking, some are actually growing. Read More
Exit Strategies & Growth Initiatives
Declining Federal budgets and the uncertainty regarding backlog and future profitability will continue to impact valuation multiples in the Government Contracting sector. As our customers focus on alternative long term strategies for growth we will assist them with planning, due diligence, and preparation for either buy or sale side and ESOP alternatives. Read More