7 key strategies to navigate a large government contract award
For government contractors, September means a flurry of acquisition activity as the federal government prepares to spend the largest percentage of its budget in any one month. To successfully navigate a large and possibly game-changing contract award, government contractors should follow these seven key strategies.
1. Debrief – Schedule your winner’s debrief. If the government loved certain parts of your RFP response, make sure you follow through.
2. Kickoff – Hold a project kickoff meeting that establishes the key points of contact, including program management, project controls, finance, and contracts. Include your subcontractors in your kickoff meeting. Ensure everyone is on board with the who-does-what part of the statement of work and how time should be tracked and reported. Verify that the contract management team understands the clauses in your contract and the finance team understands the relevant revenue recognition methodologies under the new ASC 606 standards.
3. Subcontracting – Get teaming members under subcontract. Use advanced notices to proceed sparingly. Make sure you understand which flow-down clauses are necessary. Establish subcontract monitoring policies.
4. Financing – Know how the project will be financed and how that may impact your reporting requirements. Do you have new covenants or requirements for audited or reviewed financial statements?
5. Policy – Review accounting and timekeeping policies and procedures to see if they are current, accurate, and complete. If not, update them immediately and schedule a regular periodic timeline review of them. Make sure your employees and your subcontractor employees are trained on timekeeping practices.
6. Business systems – Understand which business systems apply to you as prime and to your subcontractors. Perform a gap analysis of any potential problem areas before an audit commences. Areas of concern are accounting, purchasing, and government property systems.
- Accounting systems – A must-have for any type of flexibly priced contract or subcontract, such as cost plus, time and materials, and labor hour; includes timekeeping systems
- Purchasing systems – Applies not only to primes but to subcontractors as well, for second tier subcontracting
- Property management systems – Applies whenever you have government property (like that government issued laptop); flows down to subcontractors
7. CAS – What, if any, impact did this award have on your cost accounting standards (CAS) applicability? Did it throw you into full or modified CAS coverage? If not, do you know what your trigger contract is?
Successfully managing a big win can make or break a government contractor. Through methodical, strategic planning, government contractors can better position themselves for success. Contact our team for additional tips on how to manage your contract award.
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