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  1. The Financial Accounting Standards Board (FASB) identified leases as an item of concern on financial statements. Until recently, companies were not required to report most leases on their balance sheet which resulted in “off-balance sheet financing.” The long-term nature of leases and their use as a financing tool meant that companies have long-term commitments (liabilities),… The post The Impact of Lease Changes on Government Contractors appeared first on Left Brain Professionals Inc. leftbrainpro.com
  2. Many government contractors will need to submit an Incurred Cost Proposal. It is up to your business to make sure you do one and you do it right. Here are some common questions businesses have when it comes to preparing a proposal. Do I need to submit an Incurred Cost Proposal? You will need to… The post Everything You Need to Know About Incurred Cost Proposals appeared first on Left Brain Professionals Inc. leftbrainpro.com
  3. “Nah, we make enough money. Thanks, but no thanks.” “We never worry about making our payments.” “Our employees are dedicated to the mission of the business. They’re okay with lower compensation.” If any of these scenarios sound familiar, stop reading now; this article will not be of interest to you. However, if you want to… The post Why You Need A Budget appeared first on Left Brain Professionals. leftbrainpro.com
  4. NCMA Dayton hosted “Small Business & Government Relations” as part of it’s monthly Bagels & Business series. Panelists: Tom Krusemark, Procurement Center Representative, Small Business Administration Dave London, Chief Operating Officer, Tridec Technologies Bill Cox, Procurement Specialist, Procurement Technical Assistance Center Michael Bridges, President, Peerless Technologies Bill Cox’s opening statement to small businesses “You need… The post Small Business & Government Relations appeared first on Left Brain Professionals. leftbrainpro.com
  5. Question In your discussion of intellectual property in government contracts, you talked about government purpose rights and how you negotiated with the government for your client to keep the background technology but allow the government to own the form factor. Where both the contractor and the government contribute funding, the parties are left to negotiate… The post Intellectual Property in Government Contracts appeared first on Left Brain Professionals. leftbrainpro.com
  6. One of the most common topics we address with clients is their billing rate structure. The conversations tend to start in one of two ways. The first relates to a real or perceived competitive pricing issue. The second relates to an accounting system (software) upgrade. In both cases, we train clients how to properly structure… The post Demystifying Billing Rate Structures appeared first on Left Brain Professionals. leftbrainpro.com
  7. Each year brings about new budgets and new National Defense Authorization Acts (NDAA). NDAAs address funding, strategic plans, and rules affecting the defense acquisition process. NDAA 2018 is no exception and here are the highlights regarding cost, price, and accounting. The NDAA includes a number of provisions that reinforce the Congress’ commitment to the acquisition of commercial items under commercial terms. These include requirements for a reassessment of what general procurement statutes should apply to commercial items and the establishment of a so-called “Amazon for Government” online portal for the acquisition of commercial off-the-shelf (COTS) items. Section 846, termed “the Amazon provision,” mandates establishment of a program “to procure commercial products through commercial e-commerce portals … through multiple contracts with multiple commercial e-commerce portal providers, and shall design the program to be implemented in phases with the objective of enabling Government-wide use of such portals.” No later than 90 days after the date of enactment of the NDAA, the Office of Management and Budget (OMB) and General Services Administration (GSA) must submit an implementation plan to Congress. No later than one year after submission of the implementation plan, the OMB and GSA must conduct a market analysis of commercial e-commerce portal providers and recommend “any changes to, or exemptions from, laws necessary for effective implementation” of the program. No later than two years after the date of submission of the implementation plan, the OMB and GSA must issue guidance to implement and govern the use of the program, such as protocols for compliance with product screening requirements, data security and data analytics. The delay in full implementation of the program was incorporated into the provision during conference consideration of the NDAA to address concerns from various segments of the contracting community. The goal of the provision is to: streamline and simplify the DoD’s acquisition of many COTS items enhance competition expedite procurement enable market research ensure reasonable pricing and create cost-savings promote increased transparency and accountability Section 847 proposes to add language to 41 U.S.C. § 103 to clarify that non-developmental products or services developed at a private expense and sold competitively in “substantial quantities” to “multiple foreign governments” also qualify as “commercial items.” If enacted, this language would broaden paragraph #8 of the definition in FAR 2.101 of what constitutes a commercial item, perhaps opening up the United States commercial item market to foreign vendors that regularly sell non-developmental items to foreign governments. Section 848 provides that the DoD’s acquisition of an item through commercial item procedures constitutes a “prior determination” that the item is a commercial item that is binding on future DoD acquisitions unless (i) the head of contracting authority determines that the prior determination was improper or (ii) the senior procurement executive for a military service or the DoD determines that it is no longer appropriate to acquire the item under commercial item procedures. This change may improve consistency within the DoD acquisitions system and streamline the determination process for future acquisitions. Note that NDAA 2016, and corresponding DPAP memo, and PGI (DFARs) guidance put an emphasis on relying on prior written Commercial Item Determinations. NDAA 2018 says that a contract for items acquired using FAR 12 commercial item procedures shall serve as a Commercial Item Determination. We suspect that DoD will use this guidance for FAR 12 acquisitions going forward, but may not consider FAR 12 acquisitions that occured prior to NDAA 2018. In other words, if you’re currently trying to make a commercial item argument based on an acquisition that occurred before December 12, 2017, you may still have a battle to fight. Section 849 requires the Secretary of Defense to comprehensively review the procurement statutes and regulations applicable to commercial item acquisitions not required by statute, but have nevertheless been applied through the DFARS based on a determination that it is in the government’s interest . The Secretary of Defense is required to review each provision and provide an exemption, by December 12, 2018, from the statute or regulation for commercial item acquisitions unless he or she “determines there is a specific reason not to provide the exemption.” This provision provides a strong signal to the DoD that Congress wants a reduction in the number of provisions applicable to commercial item acquisitions. Perhaps the most important aspect of all these changes is the requirement for DoD to promulgate new regulations implementing the changes. The DAR Council must propose new rules, publish them in the Federal Register, solicit public feedback, and institute the final rule. Follow all of the DFARS cases here. Register here for Federal Register notifications. If you have questions about these changes and your federal contract, please contact Robert@LeftBrainPro.com or call (614) 556-4415. The post Commercial Item Updates in NDAA 2018 appeared first on Left Brain Professionals. leftbrainpro.com
  8. Each year brings about new budgets and new National Defense Authorization Acts (NDAA). NDAAs address funding, strategic plans, and rules affecting the defense acquisition process. NDAA 2018 is no exception and here are the highlights regarding cost, price, and accounting. The NDAA 2018 raises the thresholds for a number of procurement regulations reflecting a recognition that more onerous acquisition regulations should be limited to more costly procurements. The NDAA also reflects an emphasis on the use of commercial risk metrics when auditing contractors, and the use of non-government auditors to eliminate the backlog of pending incurred cost audits. Section 803 adds 10 U.S.C. §2313b which requires DoD to: comply with “commercially accepted standards of risk and materiality” in the performance of incurred cost audits begin using private auditors “to perform a sufficient number” of such audits not differentiate between private auditors and DCAA when considering audit results utilize peer reviews by a commercial auditor of DCAA’s unqualified audit findings notify a contractor within 60 days after receipt whether its ICP is “qualified. The goals requiring the use of private auditors are (i) the elimination of DCAA’ss incurred cost audit backlog by October 1, 2020, and (ii) the completion of all incurred cost audits within one year or less from the date of receipt of a qualified incurred cost submission. Don’t be surprised if DCAA redefines what constitutes a “qualified incurred cost submission.” We also expect even more scrutiny in a subjective process. After October 1, 2020 any audit findings not issued within one year shall be considered “complete” and further audit work will be barred-subject to waivers that must be submitted for approval by the Director of DCAA to the Comptroller of DOD. Section 805 increases the simplified acquisition threshold (SAT) to $250,000 from $100,000, and Section 806 increases the micro-purchase threshold to $10,000 from $3,000. Section 811 increases to $2 million from $750,000 the threshold for the submission of cost or pricing data for prime contracts awarded after June 30, 2018. The threshold for modifications to those prime contracts, subcontracts awarded under those prime contracts, and modifications to those subcontracts also increases to $2 million. The new threshold will be subject to periodic adjustment to keep pace with inflation pursuant to 41 USC § 1908. Section 811 also revises language in 10 USC §2306a(d) from affirmatively requiring the contracting officer (CO) to request other than cost or pricing data to the extent necessary to requiring the contractor to provide other than cost or pricing data only “if requested by the contracting officer.” Section 820 modifies the definition of “subcontractor” to clarify that agreements for the purchase of commodity items that are not identified with a particular contract and that support contracts with the federal government and other parties are not “subcontracts” for purposes of government acquisition requirements. This is a welcome clarification that will likely exclude a number of agreements from flow-down and other subcontract requirements and allow for the acquisition of these materials under standard industry terms. We expect this change to reduce the reporting requirements and risk associated with CPSRs. Perhaps the most important aspect of all these changes is the requirement for DoD to promulgate new regulations implementing the changes. The DAR Council must propose new rules, publish them in the Federal Register, solicit public feedback, and institute the final rule. Follow all of the DFARS cases here. Register here for Federal Register notifications. If you have questions about these changes and your federal contract, please contact Robert@LeftBrainPro.com or call (614) 556-4415. The post Accounting Impacts of NDAA 2018 appeared first on Left Brain Professionals. leftbrainpro.com
  9. Each year brings about new budgets and new National Defense Authorization Acts (NDAA). NDAAs address funding, strategic plans, and rules affecting the defense acquisition process. NDAA 2018 is no exception and here are the highlights regarding cost, price, and accounting. The NDAA 2018 raises the thresholds for a number of procurement regulations reflecting a recognition… leftbrainpro.com
  10. Each year brings about new budgets and new National Defense Authorization Acts (NDAA). NDAAs address funding, strategic plans, and rules affecting the defense acquisition process. NDAA 2018 is no exception and here are the highlights regarding cost, price, and accounting. The NDAA 2018 raises the thresholds for a number of procurement regulations reflecting a recognition… leftbrainpro.com
  11. Each year brings about new budgets and new National Defense Authorization Acts (NDAA). NDAAs address funding, strategic plans, and rules affecting the defense acquisition process. NDAA 2018 is no exception and here are the highlights regarding cost, price, and accounting. The NDAA includes a number of provisions that reinforce the Congress’ commitment to the acquisition… leftbrainpro.com
  12. Each year brings about new budgets and new National Defense Authorization Acts (NDAA). NDAAs address funding, strategic plans, and rules affecting the defense acquisition process. NDAA 2018 is no exception and here are the highlights regarding cost, price, and accounting. The NDAA includes a number of provisions that reinforce the Congress’ commitment to the acquisition… leftbrainpro.com
  13. A new year presents new opportunities for working more efficiently and effectively. When dealing with federal contracts, the Incurred Cost Proposal (ICP) presents one of the biggest opportunities. You’re closing 2017 and preparing for taxes anyway. What better time to gather information and documents for the ICP? Not sure what an Incurred Cost Proposal is… leftbrainpro.com
  14. A new year presents new opportunities for working more efficiently and effectively. When dealing with federal contracts, the Incurred Cost Proposal (ICP) presents one of the biggest opportunities. You’re closing 2017 and preparing for taxes anyway. What better time to gather information and documents for the ICP? Not sure what an Incurred Cost Proposal is… leftbrainpro.com
  15. A new year presents new opportunities for working more efficiently and effectively. When dealing with federal contracts, the Incurred Cost Proposal (ICP) presents one of the biggest opportunities. You’re closing 2017 and preparing for taxes anyway. What better time to gather information and documents for the ICP? Not sure what an Incurred Cost Proposal is or whether you’re required to file one? Here’s a brief primer. What is the ICP? The Incurred Cost Proposal (also known as an Incurred Cost Submission) is the annual reconciliation of the costs (direct and indirect) that a contractor expends in fulfilling a federal contract. Under FAR 52.216-7, it applies to cost-reimbursable and flexibly priced contracts. However, fixed price contracts are still documented in the submission. How is the ICP Used? The ICP is used to determine your final indirect rates for billings used in interim billing rates and forward pricing rate agreements. FAR 42.1701 provides for systematic review and monitoring of rates. What is the deadline for submission? The ICP is due six months after the close of a contractor’s fiscal year, which is June 30 for those that follow a calendar year. An auditor should verify the adequacy of your submission immediately, but it might take two or more years for the full audit. Any errors can result in penalties and interest, so accurate submissions are of paramount importance. How to Prepare the ICP My colleague Suzanne Camden and I gave a presentation on How to Prepare the ICP with Success!for the National Contract Management Association World Congress. It outlines the ICP preparation process, including the various schedules that must be completed. Start Preparing Today! June 30 might seem like a long way away, but it will be here before you know it. Don’t procrastinate until May or June! Create a folder right now to gather the necessary documents as you perform your month-end, quarter-end, and year-end tasks. Here are some of the things you can do now to prepare: Download the ICP Adequacy Checklist and use that as your guide. Download the ICE (Incurred Cost Electronically) Model (template) List the required ICP schedules and what you can accomplish or gather right now. As you reconcile your 940 and 941s, you can reconcile Schedule L. As you’re comparing budget to actual for overhead and general and administrative expenses, you can reconcile schedules B, C, and E. If you have a Period of Performance that ended 12/31, you can reconcile that contract immediately. Pro tip: if you do find yourself running behind while preparing the ICP, you can request an extension in writing from the governing office of the Defense Contracting Audit Agency as long as you do so before the deadline. But this should be a last resort. Be proactive. Make this a better year for your ICP. Get started today! If you have questions about the ICP and your federal contract, please feel welcome to reach out to Robert@LeftBrainPro.comor call (614) 556-4415. The post Why January is the Best Time to Begin Preparing the Incurred Cost Proposal appeared first on Left Brain Professionals. leftbrainpro.com
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