SHUT-DOWN – DON’T BE SHUT-OUT

February 7, 2019

By Frank Clay Jr. President, 2020 Solutions & Chairman Emeritus, The Federal Allies Institute

“Government contractors must plan for their future…”

When you are in the government contracting business, there will always be Continuing Resolutions and Shutdowns that delay or eliminate government spending which could impact your contracted business or positioning with a Prime Contractor. It is simply a “business risk” that you live with each year when government budgets are negotiated and a new administration is put in charge. During these times, career contractors have the discretion that can be directed toward your business because decisions can be made under certain circumstances on the basis of what is good and expedient for the government. You want to be favored when these decisions are made many during the shutdowns and especially coming out of the shutdown. Showing that your business is willing and ready to meet the governments requirements at hand when that customer call is made is critical to a recovery strategy for your business.

When faced with a shut-down, it is a tough time to manage daily limited cash-flow. As a result, contracted business owners must seek to do three important tasks:

  1. Control and managed expenses
  2. Seek long-term credit quickly and short-term credit as needed… do this while your credit is in good shape
  3. Renegotiate terms with your business partners and suppliers while your past performance has been acceptable

It is very important to take a snap shot of your business before the “shut down” and after the “shut down.” This documentation is critical for “course correction” planning and to justify the future financing of business to reestablish itself in the future. Banks and suppliers will want to know what happen and how did you manage the downside to keep revenue and profits flowing. This documentation will serve to help evaluate future risks of this nature.

For sure, one of your business partners will be the Contract and Program Officers that you do business with. You have to stay in “constructive communication” with them as they work off of limited government resources with little or no authority to file PO’s or pay invoices. Your ability to offer information and alternative products, program and services while there is no income for your business is a strategic initiative that must be given careful consideration. You should have similar conversations with your Prime Contractor if you are a Sub-Contractor. Bottom line, remain visible and viable to your government customers and business partners.

Clearly, if you have staff, this is a time to pull everyone together and be frank about the situation and the recovery. Show your faith in the business to overcome the challenge. “Flexibility and adaptability” in all the team members is a must have characteristic that is required to survive tough times like a shutdown. Long hours are to be expected and lay-offs should be planned accordingly. From experience, this is a great time to consider using the untapped talents of your staff and to be creative in finding new solutions for the business going forward. It is also reality to let an employee or staff member find other employment or  work part-time with the understanding they still have a job when the business is back to normal.

And it should be noted, there is a time to drop out of the business if the risks are too high to recover from. Taking a close look at your contracts/agreements and your financials is important considering shutting your business down. Consult your legal and accounting team for prudent advice. No doubt, this is a business calculation worth considering to cut your business and personal losses. As they say, when one door shuts, another door opens… you just need to know which one will is best for you. Having no do door to go through is not a solution. Be vigilant in this regard.

Last point, do your best to control your emotions. Tough times in business are tough times. You have to make the tough decisions and make the tough demands of your partners with a sense of confidence and passion. It is during these times that you find out who your partners truly are. Always respect the business decisions that everyone has to make due to directives, regulations, politics or legal considerations. Many times, business decisions are in conflict with one another for business and legal reasons. Do your best not to take things personal but remain hopeful it all will work out somehow.

I was compelled to share these thoughts from 11 successful years in government contracting business. During those years, I never saw a shut down like the one we are experiencing. I am sure everyone at this point is texting frequently, has their pencils out and computers on. In the end… business is about people working it out and making it happen. When you are informed, you are in better position to handle the challenges and still plan for the future. Remember, “the future will never be shut out… something will happen to turn things around.”

 

2020 Solutions…We help you find the business solutions you need to overcome change, challenges and to achieve results!

© 2019 Frank Clay Jr. Reprinted by Permission.

#govermentcontractors #veteranownedbusiness #smallbusiness #frankclayjr #primecontractor #shutdown #entrepreneur #proprietor


Linda E. McMahon Confirmed as SBA Administrator

February 14, 2017

The U.S. Senate on Tuesday, February 14, 2017 voted 81 to 19 to confirm Linda E. McMahon Administrator to lead the U.S. Small Business Administration.

Senate Majority Leader Mitch McConnell (KY) said McMahon seeks to “prioritize growing jobs over growing government bureaucracy”.  “This is welcomed news to small business members of Federal Allies Institute”, said David T. Boddie, Founder and Executive Director of Federal Allies Institute.


Do Your Homework!

February 8, 2017

By Anna Urman, Director Fairfax Virginia PTAP

Tell me if you’ve heard this one before – from contracting officers, OSDBUs, SBLOs, your well-meaning networking acquaintances and teaming partners and Chamber of Commerce #govcon speakers…And you have no idea what they are talking about.

What homework? How much do I have to do? Where do I start? What’s the point? Are you just letting me down easy to wiggle out of a conversation? (Well, I can’t answer that last one – but I can certainly help guide you in the homework-doing department).

What the industry experts mean by ‘homework’ is to be prepared for a conversation with a potential customer – whether it’s a government agency, a large prime, or a similarly small business who you want as a partner.  Prepared to not just to recite to them how great you are, but to speak to your value proposition. What can you do for them?

Well, what can you do for them?

If you are even thinking about responding with something along the lines of “well, I can sell them my…” – STOP.

Federal agencies, and the food chain of contractors that you want to be a part of aren’t just buying products and services, no matter how shiny and cool. They aren’t “giving out” contracts, there are no magic words that would enable a government agency to suddenly bypass decades of processes and volumes of rules just to do you a favor.

So how do you figure out what your customer wants to hear?

  1. Get to know your customer

How do you even know where to start, who would be a good customer for you? You may know from experience, which puts you a step ahead. But if it’s just a hunch – test that hypothesis through solid research before venturing out – you’ll save a lot of frustration and parking dollars.

  • What have they bought before? From whom? Where? How much did they spend? What kind competition do they usually have for your products/services? What NAICS do they use to buy your gadget?  Tools like USASpending and Schedule Sales Query are a good start. If you’re in IT, familiarize yourself with the IT Dashboard.
  • What are they on the market for currently? Opportunities in FBO, Procurement Forecasts.
  • Want more? Look at GAO reports, Inspector General’s office findings. What are your customers posting on Twitter? Are the decision makers speaking at conferences on topics of interest?
  • If you’re meeting with primes, find out in advance what they do. Their websites are a great start.
  1. Present yourself

Elevator Pitch, Business Card, Capabilities Statement, and a website. Know them, have them, invest in them. You want to present yourself as an established business that isn’t risky in any way. You want to appear polished and professional, memorable and knowledgeable.  If you are even thinking about sending an email to a government customer from a yahoo or gmail account, don’t do it. Get a company website with an email @your own domain. There are tools out there that make it really easy to put together a presentable website even for non-IT folks, for not a lot of money. Wix, SquareSpace are so easy, even I can do it.

They’ll be much more likely to invest time and answer questions from someone they see potential in.  They’ll be much more likely to send a complete newbie to their local PTAP office for the basic skills.

  1. Engage and ask the right questions

Forget asking your customer “what do you do.” If you haven’t figured it out, you’re wasting your time and theirs.   Now, if you are meeting a company you haven’t heard of at a networking event, that’s a fine question.  At a planned appointment, when you’ve had a chance to pull up their website at the least, it’s a taboo question.  If you’ve done the reading, you know what they do, you know what they buy, you know who they buy it from and how much they spend annually.   The questions you ask should showcase your knowledge of their environment and challenges, a subtle indication that you know exactly how to fix things – and a desire to understand their ideal state.

There are a number of opportunities to meet your customers – yes, at their office. Also at industry days, conferences, in LinkedIn groups, in local AFCEA, NCMA chapters, industry-specific organization Federal Allies Institute, and even on social media. Where are they going to learn? Where are they going to share information?  Don’t forget that your customers are people too – and can be found at dog parks and PTA meetings and home improvement stores. I’m not advocating stalking, but there’s a lot you can learn in a casual, no pressure, non-sales interaction that can enlighten your business development / teaming / proposal strategy.

This is plenty of homework to get started. If you need help, we’re here to help you work on your pitch, review your capabilities statement, assist with market research.

And Yes, there are instances where companies get work faster than the usual contracting timeline. That is the stuff of legends in our field. Usually, such miracles are the result of a lot of hard groundwork and persistence.


Eversheds merges with Sutherland Asbill & Brennan LLP to form Eversheds Sutherland

February 3, 2017

Federal Allies Institute is pleased to inform its small business members London-headquartered Eversheds and U.S.-based Sutherland Asbill & Brennan have merged, creating a new global law firm known as Eversheds Sutherland.

The combined entity, which now boasts of more than 2,300 lawyers in 61 offices across 29 countries, will be led by joint CEOs as part of a six-strong global management team.

Eversheds Sutherland (International) managing partner and CEO-elect Lee Ranson and Eversheds Sutherland (US) managing partner Mark Wasserman have been appointed as joint CEOs.

According to a media statement, no significant internal structural changes are expected within either firm, and respective practice group heads will work together to co-lead client initiatives.

The move comes months after merger plans were announced in December 2016.  “During the past two years under its new name Eversheds Sutherland has become a top supporter of Federal Allies Institute providing great assistance to our national Federal Allies Summits and Washington Days Conference and we very much look forward to continuing this alliance, said David T. Boddie, Founder & Executive Director, Federal Allies Institute.


Federal Allies Institute Board Members Join Treasury Panel on Small Business

December 16, 2016

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Federal Allies Institute Board Members David T. Boddie, Founder & Executive Director and Gabriel Fulton, Chairman of the Board and CEO Sintel Group Inc. participate at US Treasury Department Panel hosted by Jose Arrieta, Director OSDBU and moderated by Brian Watson of Treasury OSDBU. https://lnkd.in/dgvQY9a

 


Kingdomware Technologies v. US

June 16, 2016

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A Very Important Ruling: Kingdomware Technologies v. US

By David T. Boddie

The Supreme Court ruling is very strong for Veterans 8 to 0.  The Rule of Two preference for Veterans is fine with the Court and the unanimous vote is hard to argue with.  And it’s not going to change anytime soon.  The Rule of Two is a mandatory requirement for the Veterans Administration.

This small business won its case.  It mattered that Kingdomware Technologies won its case. It’s a validation of the entire concept that Veteran-Owned Small Businesses deserve the preference that The U.S. Congress enacted into law.  It wasn’t thrown out, nobody challenged it and said you guys don’t deserve it, nobody said it’s unconstitutional or anything like that.  Its fine with the Supremes.

How many other small businesses would go to the trouble?

After four years in pursuit of the ruling, a lot of help and pro bono, the heroic efforts of Kingdomware Technologies paid off.

Who else is going to challenge to their right of a preference after this court ruling?


Board Change 2014

September 18, 2014

Former Federal Allies Institute member Trillacorpe Construction, Bingham Farms, Michigan is no longer part of the Federal Allies Institute membership its representative departing before completion of a one-year 2014 elected term.


Federal Allies Series on Health Care Reform

November 4, 2013

Federal Allies Series on Health Care Reform

Nuts and Bolts in Response to Members’ Requests

By Ralph E. Winnie, Jr.

To ensure compliance with the Affordable Care Act, it must be determined whether the law treats a company as a large employer or a small employer as there are notable financial benefits available to small businesses that comply with the new ACA rules that every member company of Federal Allies should be informed about. Large employers are defined as employing on average 51 or more full-time workers in a given year which is projected to rise to roughly 101 or more employees in 2016. Small employers are defined on average as 50 or fewer full-time workers which could rise to roughly 100 employees or less in 2016. Starting in 2014, employers with up to 50 employees will have access to the new health insurance marketplace through the Small Business Health Options Program (SHOP).

At this time, small businesses can pay on average roughly 18% more than big business for health insurance because of administrative costs. Therefore, it is argued that SHOP will offer small businesses purchasing power and the ability to pay a lower cost. The eligible small business employer must have an office within the service area of the SHOP and offer SHOP coverage to all full-time employees, in 2016, employers retaining up to 100 employees will also be allowed to participate in SHOP. Given the uncertainty in the effective implementation of the Affordable Care Act, many small businesses have decided to keep their existing plans through 2014 when they chose to change the renewal dates to November or December which effectively delayed implementation of the Affordable Care Act for 2014.

Federal Allies would ask its member companies to do an assessment of the risks and benefits of the impact of the implementation of the ACA on small businesses and make a decision whether or not to change the renewal dates in 2013 to delay any negative impact that the ACA may cause to employee retention and productivity in the upcoming business cycle. According to information discussing small businesses and the Affordable Care Act outlined by the Illinois Health Insurance Marketplace, it is worth noting that while part-time employees count toward determining whether a business has 50 or more full-time employees, the penalty itself is only applied if a full-time employee is not offered affordable, quality coverage and receives financial help on the Marketplace to purchase a plan that meets the minimum standards under the Affordable Care Act

It has been alleged by Sarah Charles Wright and Doug Martin of Business Lexington of Lexington, KY that small employers are not penalized if they do not provide group health insurance for their employees because the ACA provides tax credits as an incentive to “offset a portion of the contributions made by certain small employers for group health insurance premium. To be eligible, a small employer must have less than 25 full-time equivalent workers (FTEs), pay average wages per FTE of less than $50,000 per year and contribute at least 50% to their employees’ total group health-insurance premiums. The lower the average annual wages paid and the fewer the workers, the bigger the tax credits available to the employer.”

It is worth noting to member companies of Federal Allies that eligible small business employers are allowed to carry forward the ACA tax credit for up to 20 years as well as apply the tax credits to the previous years’ tax return and deduct excess premiums as expenses according to Business Lexington’s annual report on the application of the ACA to small business.

Finally, according to the Illinois Health Insurance Marketplace, for tax years 2010 through 2013, the maximum credit is 35% of premium contributions for small business employers and 25% of premium contributions for tax-exempt small employers. For tax years 2014 and beyond, the maximum credit will increase to 50% for small businesses and 35% for small tax exempt organizations. Beginning in 2014, the tax credit will be made available exclusively to employers purchasing coverage through SHOP and may only be claimed for two years.

According to Jim Fuss, District Manager of the Maryland branch office of Insperity, a Houston, TX based firm that improves business performance through administrative relief, reduced liability and by providing systematic ways to improve productivity, “The expansion of health care under the ACA is expected to increase business costs for most businesses by 3.5 to 4% or $400 per employee per year and the insurers excise tax is expected to total $18 billion in 2014.”  Furthermore, while Mr. Fuss acknowledges that there should be employer shared responsibility in health care reform, “the health insurance marketplace is expected to be volatile and costs will increase significantly by 2014.” Thus, the impact of these increased costs must be weighed heavily by member companies of Federal Allies Institute because, beginning in 2015, employers with more than 50 full-time employees must offer the opportunity to enroll in qualified health coverage that meets minimum value and affordability requirements. According to Jim Fuss, “Minimum value equals 60% of essential benefit costs covered by the plan. Affordable is not to exceed 9.5% of households income.” The issue is whether small and large business employers can meet these requirements which Congress has been concerned may have difficulty being quantified.

Beginning in 2014, insurers will be prohibited from charging businesses more for insurance based on employee health factors, and there will be new limits on charges to those businesses with older employees. Therefore, it will be important for member companies of Federal Allies Institute to pay special attention to ACA notice requirements and regardless of whether an entity is a large or small business, the employer must notify the respective employees that they may purchase individual coverage through a state exchange which Jim Fuss correctly points out is “a market place where individuals and small businesses can view, compare and purchase health care insurance.”  According to the requirements of the ACA, small business employers will need to complete a single application for group coverage regardless of the number of qualified health plans offered by competing health insurers on the SHOP exchange. According to Business Lexington, these applications are important to member companies of Federal Allies as they are required to gather all of the information that will be needed to process “open and special enrollment, eligibility and benefits determinations. Premium payments will be made through the SHOP exchange, which will monitor the quality and cost of the coverage that each participating health insurer is providing.”

Federal Allies will continue to monitor the ACA and how it will affect both large and small business employers by reviewing and analyzing the tax credits and alleged financial incentives purported to be offered by Congress. This is designed to encourage small business employers to provide the most up to date info and advice on how to providing the best health-insurance group plans for their respective employees. Healthcare reform is a work in progress and Federal Allies recognizes the importance of keeping track of changes to the ACA as they continue to impact the livelihood of our member companies.


Federal Allies News September 2013

September 8, 2013

New Staff at SBA Veterans Business Development

On August 28 as crowds grew at the Lincoln Memorial to recognize the 50th Anniversary of the March on Washington, U.S. Small Business Administration at the other end of National Mall hosted an Inter Agency Task Force on Veterans Small Business Development public meeting.

Rhett Jeppson, U.S. Small Business Administration Associate Administrator, Office of Veterans Business Development introduced new staff Barb Carson, Deputy Associate Administrator, Craig Heilman, Director of Veterans Programs, and Nick Harrison, Presidential Management Fellow for the office.

The work the new team will set in motion includes many of the initiatives from the Bill Elmore era while Associate Administrator, Office of Veterans Business Development.

Office of Federal Contract Compliance Program Final Rules for VEVRAA and Section 503

The U.S. Department of Labor announced two final rules to improve hiring and employment of veterans and people with disabilities. One rule updates the Vietnam Era Veterans’ Readjustment Assistance Act of 1974; the other updates Section 503 of the Rehabilitation Act of 1973. For more than 40 years these laws have required federal contractors and subcontractors to affirmatively recruit, hire, train and promote qualified veterans and people with disabilities, respectively.  The rules should strengthen the Veteran employment aspects of federal contractors.

The rules will become effective February 23, 2014, which is 180 days after their publication in the Federal Register. More information is available at www.dol.gov/ofccp/VEVRAARule and www.dol.gov/ofccp/503Rule.

The Score Card

Government-Wide Performance for inclusion of Small Businesses in federal contracting continues to make improvements having advanced from 21.65% in FY 2011 to 22.25% in FY 2012, or $ 89,923,198,145 in prime contracts to Small Businesses.  The Small Business Goal for FY 2012 was 23%.

As for Service Disabled Veteran Owned Businesses, the 3% goal was surpassed for the first time reaching 3.03%.  The previous year was 2.65%.  In 2004 it was .38%.

Vietnam Era Veterans and their organizations such as VET-Force are primarily responsible for this and many other accomplishments as they continue to strive for additional goals for Veterans working indefatigably with their counterparts in federal government.

The methodology of the scorecard remains the same. Federal agencies as a whole are advancing the ball.  Reasons include the SBA Administrator’s institution of bimonthly meetings with agency deputies to update each on their spend in relation to the scorecard, SBA Office of General Contracting & Business Development’s attention paid to the agencies, and the addition of similar metrics to government worker personnel evaluations.

New Tools to Identify Small Business Opportunity:

New database research tools enable government procurement workers to identify procurements for small businesses by similar procurement, class or industry.

Federal Mentor Protégé Update

Among the NDAA provisions, the final stages of the draft regulations for an overall government-wide mentor protégé program, which promises to streamline processes, is almost completed.  Successful pieces of agency and DoD mentor protégé programs are being incorporated.  We expect the draft to be cleared at SBA by early October and then sent to Office of Management and Budget and for the federal agencies to review before it is green-lighted for public comment.

Size Review Standards Update

The law now requires that Size Standards be reviewed every 5 years.   Quite a heavy lift.  The work has required the hiring of staff.  The first cut of Size Standards will be put out for comment soon.

Board Elections This Fall

We are pleased to announce that the annual process to expand the Federal Allies Institute Board of Directors is underway.  Terms for new and second term board members will range from two to five years.  The membership election process is to occur this fall, with terms beginning January 1, 2014.  The first five years of Federal Allies is in the history books. FAI’s third and future Board Chairs are to serve one-year terms.  Earlier Board Chair terms were lengthened for stability during the association’s start-up phase with the first Board Chairperson Mary Fae Kamm serving a four-year term, and Second Board Chairperson Frank Clay, Jr., a two-year term.

If you are a member and are interested in becoming a board member nominee, please request a copy of our Board Volunteer Description and submit your resume to BoardElections@FederalAllies.org.  For more information, call 571-217-0823.

New Members

On behalf of the Board of Directors, I would like to welcome new members Accel Solutions LLC, AGi Mission Support Services, archSCAN, Bracken Garson Consulting Group LLC, CA Technologies, CCIM Institute, CSC, The DesignMob, DSCI, HADPRO, Key & Associates, Layer 7 Technologies, Northrop Grumman Corporation, Soft-Con Enterprises, and  Technology Automation & Management Inc.

We thank all members and participants for supporting America’s federal contracting community.  More new members will be published in future editions.

Federal Allies Open 2013… A Success!

With our first two annual golf tournaments completed Federal Allies looks forward to a 3rd annual tournament next September.  Additional golf networking opportunities will be made available in the coming months.  Congratulations to tournament and prize winners that include The ClayGroup, Dominion Construction Management, Distinctive Health Care, Front Rowe Inc., Insperity, and XcelHR.

Thank you to our sponsors Lockheed Martin, Quality Support Inc., ImQuest Biosciences, XcelHR, Earthlink, ZipCar, and American Airlines.  And thank you for a job well done to Patricia Driscoll of XcelHR, Chairperson, Federal Allies Open 2013.

David T. Boddie, Executive Director

For more information visit http://www.FederalAllies.org.