Five Clear Signs Quickbooks Isn’t Working for You Anymore
by Lucas HaydenAccounting, ERP Software Best Practices, GovCon
Aug 11, 2021
Most government contractor start-ups begin with QuickBooks® because it’s very inexpensive and it’s easy to get started. It operates on a cash basis, very much like the way you run your own household. It does automate a few of the most common accounting tasks, but the scalability just isn’t there. As QuickBooks users grow, the effort associated with accounting and finance work grows directly with the company. It shouldn’t. You should begin to see economies of scale, but you don’t. And, QuickBooks has few internal controls at all, much less the ones GovCons really need. When you start to outgrow QuickBooks, there will be some obvious signs. If any of these seem familiar, it’s time to level up to a project-based ERP. FIRST SIGN – Simple Questions take Two Days and a Spreadsheet to Answer Whether you’re a project manager, a Division VP, or the CEO, the question asked most often seems to be “Where are we?” Most of the data to answer that question can be found in QuickBooks, but it will take a day or two to extract it, filter it, and put it in context – almost certainly in a spreadsheet – to turn it into information. And whoever on the finance team draws the short straw for that project won’t be doing their regular job while that’s going on. “Where are we?” is strictly rear-view mirror stuff and project actuals-to-date should give you that. If that’s hard, “where are we headed” and “where are we likely to end up” are probably near impossible. The answer to those questions involves combining actuals with the PM’s plan for the rest of the project. It shouldn’t take a special project to answer those questions about a single contract. And if you ask the same questions about a portfolio, such as all the contracts for a customer or all the T&M contracts, your ERP should put that at your fingertips as well. SECOND SIGN – Performance Metrics are a Special, Month End Project Do you live and die by your employee utilization? Can you track Days Sales Outstanding? What about the wrap rate you use for bidding versus your actual wrap rate? Are those available on demand, or only after the monthly close is complete? With QuickBooks, gathering the data and calculating performance metrics is a probably pretty significant project in its own right. It shouldn’t be. Metrics should be calculated continuously and displayed in reports or on a dashboard on demand. Performance metrics should be an outgrowth of transaction processing, not a separate process. THIRD SIGN – Critical Functions Occur Outside of QuickBooks® Do you have to manually calculate your revenue by project? QuickBooks’ only approach to revenue recognition is to make it equal to whatever you bill when you bill it. Is your Finance team having to adjust QuickBooks revenue using manual journal entries to get the amounts in the right period or correct the amounts when billing and revenue aren’t the same? What about Indirect Rates? QuickBooks doesn’t maintain cost pools or calculate indirect rates. Does your Finance team have to transcribe data from the trial balance into a spreadsheet at month end to do those calculations outside the system? Since QuickBooks doesn’t apply indirect rates to direct costs by project for project reporting, your Finance team probably has to do that in – you guessed it – spreadsheets. There’s nothing wrong with a spreadsheet. It’s a convenient and easy-to-use tool. But they’re difficult to document and easy to “break.” And trying to figure out someone else’s? It’s easier sometimes just to build a new one. That’s a big part of the problem. Finance teams in companies that use QuickBooks spend a lot of their time reinventing their tools over and over and over. When the spreadsheet work is done and the answer is clear, often it has to be entered back into QuickBooks – as a manual journal entry. Even the best network of spreadsheets, wrapped around QuickBooks, won’t be efficient. It may be effective, might even be mostly accurate, but it won’t be efficient. That’s why there are no economies of scale. FOURTH SIGN – Your Compliance Activities are all Manual Your ERP should include a timekeeping system that enforces all the government timekeeping rules without you having to do anything more than approve completed timesheets, post labor, and process payroll. Everything else from daily entry reminders to prohibiting future entry should be completely automated. Your expense report system should be the same way. Whether it’s enforcing lodging and per diem limits, posting excess costs to separate unallowable accounts or enforcing attachment of receipt images, it should all be automated. When you have employees subject to a Wage Determination under the Service Contract Act (SCA), the Wage Determination itself should be stored in the system, the wage floors automatically enforced based on the contract being charged and the locality where the work is done. And, the system should calculate any benefit shortfall and report it so that it can be paid as Cash-In Lieu. And none of that should require a spreadsheet, much less manual transcription of data from QuickBooks or an external timekeeping system. Compliance does not require automation. A company with an experienced, qualified, GovCon accounting and finance team could be compliant with any system. It’s been said if you are willing to work hard enough, you could be compliant with a shoebox and a pile of Post It notes. No one wants to work that hard. No company wants to pay what that would cost. And no matter how experienced or how qualified the staff, human error will eventually creep in and cause a problem. The only question is how much of a problem it will be and how much it will cost. FIFTH SIGN – You Don’t Really Have Any Internal Controls The lack of internal controls is QuickBooks’ primary fault. Internal controls come in two flavors: preventative and detective. A preventative control keeps you from doing something you shouldn’t – like changing the date on a check from last week to last year. Or changing a labor charge (timesheet entry) from project A to Project B after it was already billed – and then billing it again on the new project. QuickBooks is perfectly happy to let you do either one. A detective control is just what it sounds like. It detects that something has happened – proper or improper – and makes a record of who did it and when. One form of detective control is called an audit trail. QuickBooks just doesn’t have them. When things change that shouldn’t, you might eventually find out what happened, but good luck determining who did it or when. ALL SIGNS Point to Unanet Unanet GovCon was purpose-built for project-based businesses and has all the very special functionality required by government contractors. It’s completely GAAP compliant and is designed to operate on a full accrual, not cash, basis (a requirement for government contractors). Unanet GovCon offers managers at all levels real-time status reporting to answer that pesky “where am I” question on demand – as of right now, not the last time timesheets were posted. And it can roll up projects or contracts into portfolio reports in a matter of seconds, not days. With simple planning processes for labor and materials or travel, Unanet GovCon can also answer that “where am I going?” question on the very same reports. Unanet GovCon calculates metrics in real time as well and can display them on dashboards or in reports without pausing operations for a special project. And all those critical functions like indirect rate calculation and application, revenue calculation using any number of GAAP compliant methods, and invoice calculation, editing, approval, and posting all happen in the system, not outside. Unanet GovCon’s compliance functionality is built in, not added on. It doesn’t rely on manual inputs or calculations or transcription into spreadsheets for things like SCA compliance. Fully GovCon-compliant timekeeping and expense reporting systems, complete with enforcement mechanisms for all the government rules and regulations, are built into the system. And employee timesheet entries are visible as soon as they are entered and saved – no waiting for the end of the timesheet period for updates. Unanet GovCon’s internal controls are numerous and robust, from detective controls like audit trails to preventative controls that preclude changes to posted entries or unauthorized changes to timesheets or expense reports. Does QuickBooks have the automation, scalability and stability you need to manage your project-based business? If not, it’s time to level up to a project-based ERP. Eliminate spreadsheet chaos, reduce human errors, increase efficiencies, and achieve economies of scale with Unanet. Learn more about how Unanet levels up your project-based accounting here.
Unanet CRM Joins Unanet Connect Giving GovCon, Architecture, Engineering and Construction Firms Best-in-Class Integrations
by Kim KosterAEC, GovCon, Press Releases, Unanet News
Jul 28, 2021
Dulles, VA, July 28, 2021 – Unanet CRM, the award-winning option in the Unanet suite of solutions, has joined Unanet Connect, a one-of-a-kind open integration marketplace where government contractor (GovCon), architecture, engineering and construction customers can access many of the key building blocks for a digital ecosystem that connects seamlessly to their CRM software. “Unanet Connect delivers a completely upgraded approach to bridge the gap between key systems without losing any functionality or insight,” said Assad Jarrahian, Chief Product Officer, for Unanet. “Unanet CRM is committed to supporting all our customers strategic growth plans with investments, innovation and a relentless focus on delivering what customers tell us they want and need.” Ease of integration is one area where Unanet CRM stands out and Unanet has expanded the categories of new connectors that are now available in the Unanet Connect marketplace, including: Unanet AE, and many other project-based ERPs, to collaborate across architecture and engineering firms’ accounting systems and other key business functions such as marketing, sales and project management. Digital asset management tool, including industry leader OpenAsset, to help companies store, organize and find marketing images more easily Email marketing tools, including Hubspot, so businesses can reach their target audience every time HR systems – From the most common HRIS systems such as BambooHR and more, firms can glean the most relevant and up-to-date information on personnel. “Unanet Connect is a game-changer for our firm. It has already started to make a huge difference with our growth goals,” said Ashley Hartman, Marketing & Business Development Manager, Above Group, Inc. “Our previously un-synched systems led to outdated or conflicting data, which required three times the work to edit. Removing those siloes is an enormous relief for us and it’s certain to produce measurable benefits, including the time we’ll save because we no longer have to maintain three project lists between accounting, executive and business development.” Unanet’s ERP allows companies to control complexity and compliance with one streamlined platform. It has consistently been touted by industry analyst groups and business leaders as the best project-based ERP. Most recently, Unanet was named the Gold-level winner in the American Business Awards for ERP solutions. To learn more about Unanet ERP and other solutions, please visit www.unanet.com. About Unanet Unanet is a leading provider of project-based ERP and CRM solutions purpose-built for Government Contractors, architecture, engineering, construction, and professional services. More than 3,200 project-driven organizations depend on Unanet to turn their information into actionable insights, drive better decision-making, and accelerate business growth. All backed by a people-centered team invested in the success of your projects, people, and financials. For more information, visit www.unanet.com. Media Contacts: Claire Mylott Feed Media for Unanet firstname.lastname@example.org 303-257-2928
What is ERP and How Can It Improve Your Business?
by Kim KosterAEC, ERP Software Best Practices, GovCon
Jul 02, 2021
In today’s environment, most project-based organizations use some sort of technology to help run their business, and ERP systems are becoming an increasingly popular choice for their ability to streamline processes and align businesses for growth. But first: what is ERP? In this blog, we will help answer this question and review some of the key features and benefits of a project-based ERP system. What is ERP? ERP stands for Enterprise Resource Planning. An ERP system includes financials, pipeline, time, expense, resource management, purchasing, project management, reporting, dashboarding, and more. Something to note when understanding the definition of ERP systems: “system” is not interchangeable with “software.” An ERP system goes beyond just software and includes the people and processes of an organization. The ERP will touch every part of the organization and keep all the gears turning together. Project-Based ERP vs Generic ERP Businesses that execute projects as opposed to mass production of products require an ERP system that is tailored specifically to them, instead of trying to squeeze value out of a “one size fits all” solution. A single product like toothpaste, for example, is sold to hundreds or thousands of people, but projects tend to be more unique and customized. For projects, the “product” being sold is service, and each customer will have different nuances and requirements. Generic ERPs are costly and can be very difficult to maintain. They usually manage the general ledger account and the department/organization, while projects are tracked separately. In generic solutions, the project is an afterthought when it should be the center of the universe. ERPs that are project-based, on the other hand, are designed to manage every part of the project lifecycle, from pipeline management to planning to accounting. They provide real-time information and a single source of truth for executives to make informed, strategic decisions. Here are a few other reasons to use an ERP system purpose-built for projects: Transactions are associated with a project, department/organization, and a general ledger account and can be viewed or reported through a lens using any of those dimensions Time is collected directly to the project tasks that the individual works on and is visible in real time in all projects, plans and forecasts Costing architecture is tailorable for each project and task through a Work Breakdown Structure (WBS) that can be as simple or complex as required and can be unique for every project Visibility is available in real time into the financials of each project (profit, cost, billing and even forecasts) Resource management tools that provide project managers with information on what skills are available when and even where Complete financial reporting that keeps the project at the forefront Project based key performance indicators help drive the organizational and project goals and keep them aligned System controls send notifications when project restraint thresholds are met, configured, project by project, to the needs of the business To summarize: Project-based businesses need project-based ERP. It’s as simple as that. The Benefits of an ERP System Single Source of Truth with Real-Time Data Project-based organizations who haven’t yet adopted an ERP system might be using disparate solutions, spreadsheets, or some other homegrown combination of the two to manage their business. Each of these provides its own distinct information—its own version of the truth. These separate solutions do not integrate with each other and provide stakeholders with a clear picture of the entire business. Project managers and executives spend a lot of time simply trying to find the latest version of the data or trying to “sync” the separate datasets. The project-based ERP system is the center of the organization’s activity. The finances, purchasing, resource management, project management, and more are all together in a single solution. The data and information flowing through the system is real-time, so anyone can see exactly where a project stands at any given moment and have all the information they need to make informed, strategic decisions. Automated and Streamlined Processes ERP solutions automate several once-manual processes and operations. With an ERP system, project managers can set up automated reminders for time, expense, and invoicing, as well as establish reports that run automatically. This improves operational efficiency and allows managers and executives to get out of the business of completing tedious, repetitive administrative tasks that add little value and turn their attention back to running the business. Connected and Empowered Teams People are the most important resource in project-based businesses. They are the ones who ultimately execute the projects and grow the business. Projects are social and require constant communication and collaboration between employees to keep them running smoothly—or to quickly course-correct and avoid disaster when needed. An ERP system gets all employees engaged with one solution and reviewing and working with the same real-time data. Employees will be able to instantly access the information they need to check project status and make decisions. Businesses armed with a project-based ERP are poised to unleash productivity and innovation with the power of collaboration. Compliance Confidence Government compliance is always top of mind for government contractors, but especially now as the cost of compliance has doubled over the past three years1. DCAA, CAS, CMMC, and other guidelines require GovCons to keep detailed records for time, cost accounting, and more. Without automated support for these requirements, GovCons face increased cost and increased compliance risk if there just isn’t time to do it all. With an ERP system that is purpose-built for government contractors, teams can manage risk and ensure compliance with built-in compliance and controls. With the right system, DCAA compliance and audit confidence are foundational, not simply a goal to achieve. Integration With Other Business Tools Running a project-based business has a lot of moving parts, and often means tracking data, information, trends and metrics across multiple applications. Keeping them all up-to-date is time consuming and error-prone. The best modern ERP systems integrate with other best-in-class applications, allowing the business to automate workflows and keep information in sync. By flowing data to every part of the organization, ERP systems bring processes and teams together in a way that unlocks more collaboration, better insights, and the ability to move projects forward. How to Find the Right ERP System As discussed above, project-based organizations require ERP software that manages the entire project lifecycle and have robust functionality for pipeline, customer relationship management, resource management, budgeting and forecasting, revenue recognition, time and expense, billing, real-time reporting, and more. It must provide a complete picture of the health of the organization and empower stakeholders to make strategic decisions. The software should be backed by a provider that is dedicated to the organization’s success, providing strong customer support and training. 1: 2020 GAUGE REPORT Industry Roadmap of Benchmarks and Trends for Government Contractors. Unanet and CohnReznick. September 2020 Learn more about what to look for in an ERP and financials system in our eBook.
Why We Chose Unanet: Sierra7
by Kim KosterGovCon, News and Announcements
Jun 07, 2021
Part of our ongoing blog series detailing the reasoning behind a firm’s selection of Unanet’s ERP solution over other options. The firm: Sierra7 (sierra7.com) is a healthcare services and IT consulting firm that works with a variety of major federal and state government agencies including the Department of Veteran’s Affairs, Department of Defense and federal civilian agencies. Under its new agreement with Unanet, Sierra7 will implement Unanet’s purpose-built ERP platform to help it operate more efficiently and to give the consulting firm greater insights into project management. Prior to Unanet, Sierra7 managed their business management processes in other systems. Part of their challenges had arisen when they merged two companies and were then managing them both between Sage and QuickBooks. Closing the books for their 50+ projects every month was difficult, typically taking weeks and putting project managers behind with little ability to plan ahead. They knew they needed a better long-term solution to consolidate disparate information and streamline business processes: an ERP solution. When searching for the right ERP, Sierra7 had their need for real-time information and best-in-class customer support top of mind. Early on, Unanet stood out with its advanced functionality and flexibility during both the sales and implementation processes. “We were impressed with Unanet right off the bat. Their sales team brought in subject matter experts to have the right conversations with us at the right time. Unanet’s implementation process is incredibly flexible, and the team was dedicated to listening to and understanding our unique needs,” said Frank Rendon, chief financial officer, Sierra7. “When we were assessing ERP solutions, support was a key part of our grading criteria, and Unanet’s superior support offerings exceeded those expectations. Unanet’s next-level functionality, product roadmap, training options through Unanet University and support are all why chose the Unanet solution.” Sierra7 recently went live with Unanet. The Unanet team worked with them to create a custom implementation plan that will accelerate the roll-out of certain features to meet their unique needs while still keeping their planned go-live date. With Unanet, the Sierra7 team expects to gain time savings and real-time information that will allow them to drive their business forward. They will be able to provide PMs with more robust project and financial tracking, enabling their stakeholders to confidently make strategic decisions.
Unanet’s New CRM For GovCon Technology Enables Complete Project Lifecycle Management From Pursuit Through Execution
by Kim KosterCRM, GovCon, Press Releases, Unanet News
Jun 01, 2021
From early market intelligence through project management, government contractors gain a seamless solution for winning more business and delivering best results. Dulles, VA, June 1, 2021 – Unanet, the leading SaaS project-based Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) provider, today released CRM for GovCon, a complete CRM solution from market intelligence through proposal delivery. Coupled with Unanet’s award-winning project-based ERP solution, GovCons now have a comprehensive, integrated solution to help them manage opportunities, customers and projects from initial pursuit through final invoicing. Unanet’s ERP solution already delivers best-in-class project management, insights and business analytics. Now, with CRM for GovCon, customers gain additional capabilities to help them win more business by finding key opportunities, creating winning proposals, and streamlining proposal management and delivery. With Unanet’s CRM and ERP, GovCons are empowered with industry-leading tools for business success. “Now GovCons can break out of siloed systems and have holistic project and client management functionality,” said Craig Halliday, CEO of Unanet. “When they can see the full view of their entire customer lifecycle, they are able to make smarter business decisions, operate more efficiently, and deliver better results overall.” Unlike traditional CRM tools, Unanet delivers early market intelligence data powered by GovTribe, which allows GovCons to strategically plan their pursuits by searching opportunities and identifying current solicitations, down to the specifics of dates, requirements, and estimated award value. Once project pursuits are researched through GovTribe, GovCons are able to track and work the opportunities and deliver award-winning proposals that reflect deep insight and past performance. After a project is awarded, GovCons can then manage it with Unanet ERP, while still linking back to the CRM data for detailed and fluid project management. “This partnership will provide a best-in-class, fully integrated market research capability for Unanet CRM customers,” said Nate Nash, CEO of GovTribe. “We see great value in the combined offering and look forward to better serving the government contracting community.” Unanet CRM for GovCon is the result of innovation stemming from the recent acquisition of the award-winning CRM software company, Cosential. By leveraging the sophisticated CRM technology, Unanet enriched its purpose-built system to meet customer needs and seamlessly integrate cutting-edge CRM solutions with Unanet ERP. “Unanet is continuously innovating so GovCons have better solutions than the bolt-on technologies offered by the de facto industry leaders,” continued Halliday. “This commitment to innovation and our customer-first service that consistently exceeds expectations have made us the clear choice for GovCons.” Unanet will be offering CRM for GovCon project webinars, tutorials and details online, and at its upcoming Champions user conference so GovCon customers can evaluate the solution in-depth. About Unanet Unanet is a leading provider of project-based ERP and CRM solutions purpose-built for Government Contractors, AEC, and Professional Services. More than 3,200 project-driven organizations depend on Unanet to turn their information into actionable insights, drive better decision-making, and accelerate business growth. All backed by a people-centered team invested in the success of your projects, people, and financials. For more information, visit www.unanet.com. About GovTribe GovTribe provides industry-leading market intelligence and capture tools for federal government contractors. We believe the tools and data required to compete in the federal market should be accessible, modern, and designed for real people. For more information, visit govtribe.com.
What You Need to Know About the Contractor Purchasing System Review
by Kim KosterGovCon, Government Compliance
May 26, 2021
What is a CPSR? A contractor purchasing system review (CPSR) is performed by the Defense Contract Management Agency (DCMA) to evaluate the efficiency and effectiveness with which a contractor spends government funds and complies with government policy when subcontracting. In short, a CPSR is a review of a contractor purchasing system. Before we learn a little more about the review itself, let’s back up and level-set on what exactly a purchasing system is. What is an Approved Purchasing System? “System” is not interchangeable with “software” or “technology”—it’s not something you purchase off the shelf and install. A contractor’s purchasing system is an amalgamation of people, processes, and tools that must work together to achieve the goal of spending taxpayer dollars wisely. So, an approved purchasing system is one that has passed a CPSR, meaning it is designed to ensure that purchases are made at fair and reasonable prices and in compliance with the applicable contract terms, regulations, and public laws. When and Why is a CPSR Performed? As stated above, the goal of a CPSR is to ensure that a contractor purchasing system is operated in such a manner as to assure that the contractor spends government funds in accordance with the FAR. The review gives the Administrative Contracting Officer (ACO) a basis for granting, withholding, or withdrawing approval of the contractor’s purchasing system. Contractors cannot initiate a CPSR on their own. Rather, once a contractor’s sales to the government—excluding competitively awarded firm-fixed-price and fixed-price with economic price adjustment contracts and sales of commercial items pursuant to FAR Part 12—are expected to exceed $50 million in the next 12 months, the ACO is required by regulation to conduct a risk assessment. The ACO will review the contractor’s past performance and the volume, dollar value, and complexity of their purchasing to determine if the risk of ineffective or inefficient purchasing justifies the costs and effort required to perform a CPSR. Though the ACO is solely responsible for initiating a CPSR, it is possible other government organizations can determine the risk justifies the effort and ask the ACO to schedule a CPSR. For DOD contractors, a CPSR, as contemplated by FAR Subpart 44.3 and DFARS Subpart 244.3, will be conducted by the Defense Contract Management Agency (DCMA) in accordance with its CPSR Guidebook. Civilian agencies might request that DCMA conduct a CPSR on their behalf or contract with an independent audit form for the review. A few civilian agencies even have in-house teams that can conduct a CPSR. All CPSRs, except a follow-up review, are predicated on a risk assessment. Take the time to understand what the reviewers will be looking for in your purchasing system. Even if the CPSR is to be conducted by an organization other than DCMA, it is worthwhile to carefully review the DCMA CPSR Policies and Procedure Checklist. There are 24 DFARS criteria to be addressed and at least 65 items on the DCMA checklist. The DCMA materials are quite comprehensive and a good resource even if another organization will conduct your review. CPSR References: DFARS 252.244-7001, Contractor Purchasing System Administration DCMA CPSR Policies and Procedures Checklist DCMA CPSR Guidebook Advantages of Having an Approved Purchasing System Maintaining an approved purchasing system (i.e. one that has passed a CPSR) benefits the contractor for many reasons, including: It may fulfill a contractual requirement. All Department of Defense cost reimbursable or time and material (T&M) contracts will contain a clause (252.244.7001) that requires the contractor to maintain a compliant purchasing system. If the contractor is subject to the Cost Accounting Standards, the clause allows the government to withhold up to 5% of payments under the contract if the contractor fails to maintain an adequate purchasing system. These regulations apply even if the contractor’s system has not been formally reviewed. Some solicitations require the bidders to have an approved purchasing system. Others, such as the recent General Services Administration (GSA) Governmentwide Acquisition Contract (GWAC) solicitations, offer bonus evaluation points for contractors that have an approved purchasing system. Providing advance notification and obtaining the contracting officer’s consent to subcontract is generally not required when the contractor has an approved purchasing system. Not only does this eliminate some bureaucratic paperwork, it also significantly reduces a contractor’s risk. If the contractor was required to provide advance notification and obtain consent for a subcontract and did not––or cannot prove that they did––auditors will often question all costs associated with that subcontract. Risk Assessment Form Now that you know why a CPSR is performed, let’s talk about the risk assessment. The ACO will conduct the risk assessment utilizing the CPSR risk assessment form. Some of the information that will be requested is company information, last CPSR date and recommendations, sales data, contract type mix, sales to the government as a percent of total sales, number of POs/subcontracts by dollar values for the most recent year, type of business, and if you have been suspended from doing business in the past three years. The ACO will use your completed risk assessment form to determine if a CPSR is warranted and should be scheduled. If you have reached or are about to reach the $50 million threshold, it is time for you to make sure your purchasing system is operating in a manner that can pass a CPSR. Policies and Procedures are a Big Part of the CPSR Having and adhering to policies and procedures is the largest part of this review. So, making sure your documentation is in order, up-to-date, followed, and monitored is critical. TIP: Establish a self-audit program and document the results. Reviewers will see this as a very favorable activity. Below are some basic, overarching guidelines for your CPSR policies and procedures: Establish clear lines of authority and responsibility Ensure that all purchases are based on authorized requisitions and include documented support for vendor selected, price paid, and files, which are subject to government review Implement internal audits or reviews, training, and policies for the purchasing department to ensure the integrity of the system Include a system description detailing policies, procedures, and purchasing practices that comply with the requirements of the FAR and DFARS Install a sound organizational and administrative structure to ensure effective and efficient procurement of requirements at the best value from responsible and reliable sources Establish a role-based training program for all who participate in the purchasing process CPSR Requirements and DFARS 252.244.7001(a) DOD’s Business Systems Rule sets forth 24 system criteria that must be present in all contractor purchasing systems for a purchasing system to be “acceptable.” The criteria are outlined in DFAR 252.244-7001(a). In this blog, we will review these requirements. Below, the DFARS criteria are grouped into summary activities with the applicable criterion. Procurement Planning/Market Research (2 Criteria) Apply a consistent make-or-buy policy that is in the best interest of the government Ensure proper type of contract selection and prohibit issuance of cost plus a percentage of cost subcontracts Conflict of Interest/Misconduct (1 Criterion) Enforce adequate policies on conflict of interest, gifts, and gratuities, including the requirements of the Anti-Kickback Act Competition (2 Criteria) Use competitive sourcing to the maximum extent practicable, and ensure debarred or suspended contractors are properly excluded from contract award Require management level justification and adequate cost or price analysis, as applicable, for any sole or single source award Negotiated Procurement (1 Criterion) Document negotiations in accordance with the FAR requirements for negotiation Memoranda Cost of Pricing Data and Price Reasonableness (5 Criteria) Evaluate price, quality, delivery, and technical, and financial capabilities of competing vendors to ensure fair and reasonable prices Perform cost or price analysis and technical evaluation for each proposal or quote to ensure fair and reasonable subcontract prices Document negotiations in accordance with FAR 15.406-3 Take discounts, including cash discounts, trade discounts, quantity discounts, rebates, freight allowances, and company-wide volume discounts Establish and maintain procedures to ensure performance of adequate price or cost analysis on purchasing actions Source Selection (3 Criteria) Use competitive sourcing to the maximum extent practicable, and ensure debarred or suspended contractors are properly excluded from contract award Evaluate price, quality, delivery, technical capabilities, and financial capabilities of competing vendors to ensure fair and reasonable prices Establish and maintain selection processes to ensure the most responsive and responsible sources and to promote competitive sourcing so that purchases are reasonably priced and from sources that meet quality requirements Contract Formation and Content (3 Criteria) Ensure purchase orders and subcontracts contain all flow-down clauses, including terms and conditions, and any other clauses needed to carry out the requirements of the prime contract Notify the government of the award of all subcontracts that contain flow-down clauses that allow for government audit of subcontracts, and ensure the performance of audits of those subcontracts Ensure purchase orders and subcontracts contain mandatory and applicable flow-down clauses, as required by the FAR and DFARS Foreign Purchasing and Performance (3 Criteria) Ensure compliance with all relevant domestic preference requirements Ensure compliance with export control regulations Ensure agreements are not executed with prohibited parties Procurement Administration (4 Criteria) Maintain subcontract surveillance to ensure timely delivery and procedures to notify the government of potential subcontract problems that may impact delivery, quantity, or price Document and justify reasons for subcontract changes that affect cost or price Ensure that proper types of subcontracts are selected, and that there are controls over subcontracting, including oversight and surveillance of subcontracted effort Establish and maintain procedures to timely notify the contracting officer, in writing, of excessive pass-through concerns Tips for a Successful CPSR The process kicks off with the risk assessment and a series of detailed data questionnaires. Make sure your data is correct and that YOU understand what the information means so you can easily answer the reviewer’s questions. Answer clearly and timely so that the reviewer can understand the answer. Contractors that don’t have CPSR experience in-house may find it beneficial to engage a consultant to help prepare for the CPSR. Review the below tips for a successful CPSR: Prepare a strategic plan for compliance Prepare yourself with policies, procedures, and tools Self-audit plan executed and documented Understand the purpose of the purchasing review Study the guidebook and all references that DCMA provides Have at least one member of the executive team and ALL other participants at the entrance meeting Choose a point of contact to be a liaison with the CPSR team Keep a copy of all questions and answer documented At the exit meeting, make sure that you have all the stakeholders and understand issues brought up by the team The CPSR report will state recommendations that the CO/ACO will use to make the final determination of approving or disapproving the purchasing system. Common Issues Some common review issues can be easily corrected by taking the time upfront to put together a comprehensive plan. Planning the system is very important, so don’t rush through it. Make sure you are thorough. After the system is planned and documented, it must be executed and maintained to avoid issues. Below are a few common issues, but this list is by no means exhaustive: Policies and procedures don’t address the requirements The actual practice doesn’t match the policies and procedures Lack of competition – too many sole-source with inadequate justifications Inadequate FAR/DFAR flow-downs Inadequate price analysis Inadequate documentation Having a Successful CPSR Requires an Integrated ERP Tool Unanet purchasing software delivers powerful functionality to manage and simplify your buying process, designed to address the specific needs of professional services firms. With Unanet’s one system, purchasing integrates directly with timekeeping, expense, financials, and billing, saving time and money, and increasing accuracy. Our web-based system makes the process easy and visible from purchase requisition (PR), to issuance of the purchase orders (PO), through to customer invoice. Through Unanet’s workflow and approval process, all purchasing transactions can be tracked efficiently and integrated into the project forecasts. You can trust the accuracy of the data you are providing to the CPSR team as well as provide reports with all the needed traceability. To learn more, download the Aronson and Unanet white paper, The Contractor Purchasing System Review (CPSR) – What You Should Know.
DCAA Compliance: What You Need to Know
by Rich WilkinsonGovCon, Government Compliance
Apr 30, 2021
Who or what is DCAA? It’s an acronym, of course, for the Defense Contract Audit Agency. Their mission is to provide audit and financial advisory services to DOD and other federal entities responsible for acquisition and contract administration (straight from their website). The subtext of that mission is to ensure DOD gets the best value for every dollar spent on defense contracting. The agency was formed in January 1965 under the direction of the Under Secretary of Defense (Comptroller) in response to a study directed by Secretary of Defense Robert S. McNamara. William B. Petty, former Deputy Comptroller of the U.S. Air Force, was appointed director of the brand new agency. Previously, the various branches of the military had been responsible for their own contract audits, but there was little consistency in either administration or auditing. Joint audits began with the Navy and Army Air Corps in 1939 and a unified acquisition regulation, known as the Armed Services Procurement Regulation (ASPR) was established in 1947, but a single contract audit manual was not issued until 1952. Once DCAA was authorized, they took over maintenance of the manual and today the Defense Contract Audit Manual (DCAM) is considered the definitive source of detailed processes and procedures for all government contract audits whether the contracts in question are awarded by DOD or by a civilian agency. If DCAA is an Audit Agency, What is “DCAA Compliance?” It’s really shorthand for compliance with all the cost accounting regulations of the federal government. Because DCAA is the largest, by far, of all the participants in government contract auditing, the phrase “DCAA Compliance” has become synonymous with federal contract cost accounting compliance. It’s probably not very accurate, but it’s handy. When it comes to cost accounting compliance, there are really two sets of rules. The first, and the one that applies to pretty much everyone, is the Cost Principles found in Part 31 of the Federal Acquisition Regulation (FAR). Those principles guide the treatment of costs from labor and payroll costs to bid and proposal expense – in great detail. Part 31 also contains extensive rules about what kinds of costs are “allowable” and can be passed on to the government either as direct charges to a contract or in the contractors’ indirect rates, and which are “unallowable” and may not be passed on to the government at all. The second set of rules is known as the Cost Accounting Standards. Whereas the cost principles of the FAR are concerned primarily with allowability, the CAS is concerned almost exclusively with allocability – how the costs must be measured and allocated. “DCAA Compliance” has one other connotation. In a DCAA audit report, they express opinions on the allowability of costs (FAR), the allocability of costs (CAS) and on the reasonableness of costs or “quantum” in accountant-speak. A company is said to be “DCAA Compliant” when: Their policies say the right things about the cost accounting treatment of their costs, Their procedures describe the correct steps to do the right things with those costs, and Their actual cost accounting practices match their policies and procedures. The “who” and the “what” of DCAA auditing DCAA, as their name implies, audits government contracts. They also audit contractors, but only in connection with one or more contracts that are themselves subject to audit. DCAA would not audit a contractor that supplied goods exclusively on competitively awarded firm fixed price contracts. If those same contracts were cost reimbursable, the contractor would almost certainly be subject to audit as an organization. The contracts and contractors they audit are primarily those awarded by the DOD. But DCAA does perform a significant portion of the audits of government contracts awarded by civilian agencies such as NASA, DOE, EPA, DHS and the VA. DCAA is reimbursed by those agencies when they audit on their behalf. The other agencies have historically contracted for audit services to be performed by commercial audit firms such as CPA firms. All the audits performed by DCAA, whether on behalf of DOD or a civilian agency, are governed by a written audit program. That program specifies every step of the audit process in excruciating detail from the notification of the contractor and the conduct of the entrance conference to the formulation of the report, its findings, and its distribution. DCAA’s audit programs are also utilized by civilian agencies as part of their own statements of work when they contract for audits by commercial firms. All of the audit programs are made available to the public at DCAA’s web site here. All of their internal guidance to the agency’s auditors is also public and may be found here. A visit to the Directory of Audit Programs should be the very first action by a contractor on receipt of a notification that DCAA will be auditing some aspect of its operations or one of its government contracts. If the type of audit described in the notification is unfamiliar, the contractor should ask which specific audit program will be performed prior to scheduling an entrance conference or auditor visit. The program will detail not only the steps of the audit, but the data and reports they may request during the audit. Forewarned is forearmed and knowing exactly what DCAA is likely to ask for before they ask can be worth its weight in gold. DCAA does not audit the Department of Defense. DOD has its own audit agency for internal audit as do all the uniformed services and most other DOD agencies (such as Defense Intelligence Agency). Neither of these does DCAA compliance with labor laws such as the Service Contract Act (SCA) – the Department of Labor does that even in connection with a Defense contract. The primary audits performed by DCAA DCAA is required to provide a report of its activity for the previous Government Fiscal Year (GFY) to Congress by March 31st each year. In the 2019 report, published March 31st, 2020, DCAA described the audits they perform as four basic types: Forward Pricing: Forward pricing audits are generally completed before contract award where DCAA evaluates a contractor’s estimate of its proposed cost to provide goods or services to the government. Forward pricing includes demand work—proposal audits, forward pricing rates, and estimating system audits. Incurred Cost: Incurred cost audits determine the accuracy of a contractor’s annual allowable cost representations. Based on the findings of such an audit, DCAA expresses an opinion as to whether the costs are allowable, reasonable, and allocable to the contracts performed that year, based on government accounting and acquisition provisions. Special Audits: Special audits are largely conducted after contract award. Most of the reports in this category are issued in response to requests from contracting officers. Special audits are associated primarily with costs arising out of claims and terminations. Other Audits: Other audits can be requested by a contracting officer or initiated by DCAA. These audits focus on adequacy of the contractor’s Cost Accounting Standards (CAS) Disclosure Statement, compliance with cost accounting standards, review of contractor business systems, or compliance with the Truth in Negotiations Act (TINA). If an audit is in my future, DCAA or otherwise, what should I look for in a cost accounting system? DCAA compliance requires that your accounting and related business processes which collectively include policies, manual procedures and tools be compliant. Software alone is not audited for DCAA compliance or certified, nor approved as DCAA compliant. However, Unanet software has been reviewed by DCAA auditors at more than 2400 customer sites and, along with the customer policies and procedures, approved as supporting DCAA requirements. DCAA compliance should be a result and a state, not a project of its own. Unanet is a well-designed system with features to enforce the GovCon rules and automate the GovCon specific processes (like calculation and application of indirect rates and project-based billing and reporting) can accomplish just that. Unanet is purpose-built in-house by GovCon professionals, and is the only native integrated Cloud ERP solution built from the ground up to serve this unique market. DCAA compliance and audit confidence are foundational, not simply a goal to achieve—Unanet features support DCAA requirements at each stage. See what Unanet can do for your organization. “Posting revenue by type of contract saves time so that financial periods can be closed quickly and efficiently. We know that everything is closed on time and correctly. Unanet shone during our DCAA audit.” —Bob Deegan, Senior Vice President and CFO, Array Information Technology Want to learn more? Our 2021 GovCon Success Guide explains why building a robust, strategic business and technology foundation is the key to unlocking your firm’s full potential and will give you practical steps to improve your competitive posture in 2021 and beyond.
CAS Compliance: What You Need to Know
by Rich WilkinsonGovCon, Government Compliance
Apr 30, 2021
What is CAS? CAS is an acronym that stands for Cost Accounting Standards. CAS is one of two primary sets of “rules” about how government contractors are required to do their cost accounting. The other is the Federal Acquisition Regulation (FAR) Cost Principles, contained in Part 31 of the FAR. The Cost Accounting Standards consist of a set of 19 separate standards, commonly referred to by number, and numbered from CAS 401 to CAS 420. There is a missing standard (419) that was proposed, but never issued. Each of the 19 standards addresses the cost accounting treatment of a separate type of cost or practice. The standards are: CAS 401 – Consistency in Estimating, Accumulating, and Reporting Costs CAS 402 – Consistency in Allocating Costs Incurred for the Same Purpose CAS 403 – Allocation of Home Office Expenses to Segments CAS 404 – Capitalization of Tangible Assets CAS 405 – Accounting for Unallowable Costs CAS 406 – Cost Accounting Period CAS 407 – Use of Standard Costs for Direct Material and Direct Labor CAS 408 – Accounting for Compensated Personal Absence CAS 409 – Depreciation of Tangible Capital Assets CAS 410 – Allocation of Business Unit G&A Expenses to Final Cost Objectives CAS 411 – Accounting for Acquisition Costs of Material CAS 412 – Composition and Measurement of Pension Cost CAS 413 – Adjustment and Allocation of Pension Cost CAS 414 – Cost of Money as an Element of the Cost of Facilities Capital CAS 415 – Accounting for the Cost of Deferred Compensation CAS 416 – Accounting for Insurance Costs. CAS 417 – Cost of Money as an Element of the Cost of Capital Assets Under Construction CAS 418 – Allocation of Direct and Indirect Costs CAS 419 – [Reserved] CAS 420 – Accounting for IR&D Costs and B&P Costs The purpose of the Cost Accounting Standards is to promote consistency and uniformity in the outcomes of federal contractors’ cost accounting systems, especially in the following areas: How costs should be allocated or assigned How certain kinds of costs should be measured Requirements for covered contractors to comply with the standards Requirements for covered contractors to adjust contract prices when there is a change to a cost accounting practice Requirements for covered contractors to formally disclose their practices to the government in a prescribed form and format (forms available at: https://www.whitehouse.gov/wp-content/uploads/2017/11/CASB_DS-1.pdf) How is CAS different from FAR? The Federal Acquisition Regulations (FAR) and Cost Accounting Standards (CAS) are very different. First, FAR is concerned primarily with the “allowability” of costs in a GovCon’s books. It specifies whether or not you can pass those costs on to the government in your contract costs, either directly or as indirect costs. The FAR is managed and maintained by an organization within the General Services Administration (GSA), the FAR Council. The Council itself is administered by the Office of the Secretary of Defense (OSD) and that office publishes a list of all pending or proposed changes to the FAR. CAS is all about the “allocability” of costs. The standards govern how a GovCon firm may assign costs to a project, or “final cost objective” in accountant-speak, especially concerning allocations from cost pools or service centers. The standards are promulgated and amended, from time to time, by a Board authorized by statute (41 U.S.C. 1501 et seq.) and consisting of five members; the Administrator for Federal Procurement Policy, who chairs the Board, and four members with experience in Government contract cost accounting, two from the Federal government (DOD and GSA), one from industry, and one from the accounting profession. The DOD representative is currently the Director of DCAA. The full text of the standards is codified in law at 48 CFR § 52.230-2 – Cost Accounting Standards. An excellent reference to the standards may be found at the Legal Information Institute of Cornell University. FAR and CAS also differ rather significantly in their approach. FAR is directive. It specifies exactly which costs may be passed on to the government and which costs may not. CAS is outcome-based. It sets standards for the required results of a contractor’s assignment and allocation practices, but it does not specify how the practices must be performed. The practices are up to the contractor and may be anything desired so long as the results meet the standards. There is one more rather significant practical difference. There are more than 40 changes to the FAR pending which could reasonably be expected to be issued in the next year or so and four of those will have some impact on cost accounting practices. The CAS Board, on the other hand, has not issued a new standard nor made any significant change to existing standards since 1978. What does it mean to be CAS Compliant? A contractor is said to be “CAS Compliant” if the results of its cost allocation practices meet all of the standards. Like compliance with the FAR cost principles, CAS compliance is not dependent on tools or software. It is measured strictly by looking at the results achieved by a contractor’s policies, procedures and actual accounting practices. A cost accounting system purpose-built for government contractors like Unanet’s GovCon ERP, with built-in functionality for calculation and allocation of indirect rates, segregation of direct and indirect costs and segregation of allowable and unallowable costs, will make CAS compliance not only much easier, but much more consistent. Trying to be compliant without a purpose-built software tool with automated processes and practice enforcement rules would be burdensome at best. Trying to do it with no tools at all would be simply crushing. Who audits CAS compliance? Like compliance with the FAR cost principles, compliance with the CAS is audited by DCAA for DOD contractors and a number of other agencies which use DCAA for their auditing (such as NASA and DOE). Other civilian agencies will sometimes use a CPA firm to audit CAS compliance when required. CAS audits are usually triggered by the initial submission of a contractor’s CAS Disclosure Statement when they first become covered. When a contractor becomes CAS covered is another topic all its own. If CAS is in my future, what should I look for in a cost accounting system? You need automation for processes like indirect rate calculations, application of indirect costs to direct costs, and internal controls. You also need a chart of accounts with enough flexibility to properly segregate direct and indirect costs and to segregate allowable and unallowable costs. In short, you need a project based ERP that is purpose-built for the needs of government contractors and their unique cost accounting processes. Purpose-built in-house by GovCon professionals, Unanet is the only native integrated Cloud ERP solution built from the ground up to serve this unique market. CAS compliance and audit confidence are foundational, not simply a goal to achieve—Unanet features support DCAA requirements at each stage. See what Unanet can do for your organization. “Posting revenue by type of contract saves time so that financial periods can be closed quickly and efficiently. We know that everything is closed on time and correctly. Unanet shone during our DCAA audit.” —Bob Deegan, Senior Vice President and CFO, Array Information Technology Want to learn more? Our 2021 GovCon Success Guide explains why building a robust, strategic business and technology foundation is the key to unlocking your firm’s full potential and will give you practical steps to improve your competitive posture in 2021 and beyond.
Sev1Tech Selected Unanet for Project-Based ERP Reporting and Invoicing
by Kim KosterGovCon, Press Releases, Unanet News
Apr 28, 2021
DULLES, Va., April 28, 2021 – Unanet, the leading SaaS project-based Enterprise Resource Planning (ERP) provider, confirmed that Sev1Tech has selected and implemented its project-based ERP solution for its technology business. The Unanet solution replaced competing products due to its superior reporting, ease of implementation, and industry-leading functionalities customized to Sev1Tech’s business needs. Sev1Tech provides IT modernization, cloud, cybersecurity, engineering, training and program support services to U.S. government agencies and major commercial organizations. After a merger, Sev1Tech needed to streamline duplicative accounting, finance, reporting and invoicing solutions, among other functions. Both Sev1Tech and the company it acquired used project-based ERP solutions. Still, it quickly became apparent that Unanet was the superior solution. Sev1Tech chose Unanet as the standardized product throughout the combined company. The implementation was conducted smoothly and rapidly due to Unanet’s outstanding customer service and account management teams that took the time to understand Serv1Tech’s unique circumstances and work with the company directly. After implementing Unanet across the board, Sev1Tech was able to increase proficiencies by adopting new functionality and pursue strategic goals year over year because of the depth and innovation of the solution. Additional improvements included a painless financial audit of the company’s GSA Schedule pricing and sales. A new ability for more than 100 subcontractors and staffers to enter their timekeeping efficiently and streamline invoicing for billers meant that subcontractors are paid much more quickly and regularly. “We had different ERP providers to select from after our merger, but it quickly became clear that Unanet was the best choice,” said Jamie Flynn, Vice President, Finance & Accounting at Sev1Tech. “Unanet’s ability to solve our complex business challenges and its extensive knowledge of the government contractor world have been crucial in our company’s growth and success. We recommend Unanet to any GovCon.” Sev1Tech also relies on the automated analyst function within Unanet, which verifies data 24×7, and the purchasing module, which the accounts payable team uses for the latest information about purchase orders and payments. “Sev1Tech is a rapid-growth company that has demonstrated its value to customers in the government sector,” said Kim Koster, Vice President of Product Marketing for Unanet. “Armed with the right technology, Sev1Tech delivers critical IT solutions for U.S. agencies.” Unanet is rapidly growing in the project-based ERP industry as more and more GovCons reject the status quo and seek modern solutions that work for their dynamic businesses. Consistently, Unanet is ranked the leader by industry analysts, experts and customers such as in G2’s Spring 2021 Reports, which named Unanet among the fastest implementation, highest user adoption, most implementable, easiest setup, best customer support, best relationship, easiest to use, and best usability. “We’re grateful to the terrific team at Sev1Tech for their ongoing partnership,” continued Koster. “We look forward to growing with them and continuing to help them succeed on their ERP journey long-term.” # # # About Unanet Unanet is a leading provider of project-based ERP and CRM solutions purpose-built for Government Contractors, AEC, and Professional Services. More than 3,100 project-driven organizations depend on Unanet to turn their information into actionable insights, drive better decision-making, and accelerate business growth. All backed by a people-centered team invested in the success of your projects, people, and financials. Learn more at www.unanet.com. About Sev1Tech Sev1Tech provides I.T. modernization, cloud, cyber security, engineering, training and program support services to U.S. government agencies and major commercial organizations. Headquartered in the Washington D.C. metro area, Sev1Tech is a preferred and trusted contractor supporting critical missions across the defense, intelligence, homeland security, space and health markets. Media Contacts: Claire Mylott Feed Media for Unanet email@example.com 303-257-2928 Katie Toth Sev1Tech firstname.lastname@example.org 703-662-9243
Latest ERP Updates for GovCons Deliver New Mobile Capabilities, Fixed Asset Tracking and SCA Support
by Kim KosterGovCon, News and Announcements, Product Releases
Apr 05, 2021
GovCons have told us they are on the go and working from remote locations more and more, so they need enhanced mobile capabilities that enable them to track information, submit timesheets and expenses from anywhere. They’ve also told us that enhancements to the finance and accounting modules will give them an even more refined and elegant way to conduct some of their day-to-day business. It’s with these customer requests in mind that we delivered the latest features and functionalities to Unanet’s project-based ERP. For GovCons, Unanet’s new release delivers three primary enhancements: Mobile Time & Expense capabilities, Fixed Assets tracking, and Service Contract support. A new Mobile application allows busy GovCon professionals to input time and expense on their own devices anywhere, anytime, making expense input easy. Supervisors will also be able to approve their employees’ timecards and expense reports from their own mobile devices. Unanet’s mobile applications are high-rated and user-friendly, giving customers best-in-class capabilities. Future improvements include data capture directly from scanned receipts, enabling users to create an expense item in under 30 seconds. A new native Fixed Asset tracking and depreciation solution that calculates and records depreciation expenses to the general ledger, tracks asset in-service dates and locations and records disposals to complete the asset lifecycle. Unanet’s reports and its unique dashboard make the tool more intuitive and user-friendly than any other on the market. The Service Contract Act (SCA) requires GovCons have the ability to comply with the wage determination in their contracts. Offering advanced SCA support, Unanet will now automatically calculate the correct costs for export to their payroll system, including pay in lieu of benefits. Additionally, complete wage determinations history for each contract is available to support Department of Labor audits. This is the second major release from Unanet for its GovCon platforms this year, further underscoring our commitment to innovating and enhancing our software to ensure GovCon customers have the latest technology to meet their ever-changing needs. Unanet is committed to being a trusted counselor and knowledgeable expert to help GovCons navigate increasing change and complexity in their industries, through insightful, simplified project and financials management, contract management, invoicing, timekeeping, security compliance and more.
Leveraging Good Data for Growth
by Kim KosterBusiness Development & Growth, GovCon
Apr 05, 2021
In general, GovCon firms either grow or shrink – no one stands still. Looking for an exit in a few years? Growth is essential. Looking for a capital infusion? Growth is essential. Shopping for a better deal on a line of credit? – Growth is essential. Buyers, investors, and lenders are all becoming more sophisticated and they are always risk averse. They want to see that you can leverage the data from your systems to produce information and use that information to fuel growth. They also want to see that you have tools and processes that are capable and scalable. And that includes keeping the cost of those processes as low as practical so you can win the contracts you pursue and use all the information at your disposal to pick the right targets to pursue. Bottom line: Growth is essential, and good data will get you there. Growth Driver #1: Good Decisions Whether it’s a decision on where to make the next training or BD investment, which of three or four or five opportunities to pursue, or even whether to continue chasing a procurement when conditions have changed, fact-based decision making is the only path to success. Your ERP system should be able to give you data on cost of past performance for the same or similar efforts. It should be able to tell you which customers are profitable (and which are not). In fact, it should be able to give you a broad range of Key Performance Indicators (KPIs) on everything from your current projects’ profitability to the trend of your indirect rates. These KPIs should be some of the factors you consider when deciding where to go next. Your win rate on previous proposal efforts should also be available – by customer, by line of business, or even by your internal business units. If not, why not? What you should know: Approximately 60% of firms use data analytics to boost process efficiency 57% of businesses leverage analytics to drive strategy Just over 50% of successful businesses use analytics to monitor and improve financial performance (Source: Business Analytics. Harvard Business School. 2019.) Data analytics can help GovCons target opportunities more accurately Analytics can also surface hidden costs and keep the indirect rates in the “win territory” How you can succeed: Make sure your systems can calculate your KPIs continuously and in real time so that information is available on demand when you need it and not “two weeks after the close” or “once a quarter.” Look for a tool that gives your users an experience with reports and dashboards that they can manage themselves Standardize your KPIs across teams and departments so everyone is looking at the same information Train your teams on reading and interpreting the KPIs to make the information actionable Whether it’s cost control, indirect rate trends, portfolio management or pipeline tracking, make sure the metrics you track actually matter. A few KPIs that deliver clear insights will be better than dozens that users have to dig through. Growth Driver #2: Better Proposals Proposal writing is always a challenge, always important, and increasingly difficult to manage. The RFP response is the difference between getting an award or not and many GovCon firms lack the processes required to consistently write a winning proposal. It’s not just the technical volume. Showcasing your subject matter expertise and experience is just the start. In today’s environment, you also have to price to win and that means knowing how your rates will be impacted by a win, what staff resources will be available to perform the work, and how a win might affect other ongoing work. Guessing at any of these factors, even if it is an informed guess, may not be a winning approach. Worse, even if your proposal is selected for award, a wrong guess could make your hard-won contract a losing proposition. It all comes back to what you know and whether you can leverage that information to help you win. What you should know: 77% of firms say individual awards make up a significant portion of their revenue Nearly 70% of companies win less than half the contracts they bid on 66% of GovCons still use Excel to estimate their costs, even though they realize a need for better technology Over 20% of contractors had a negative growth rate in 2020 Source: Unanet GAUGE Report 2020. How you can succeed: Understand the scope of the project and use that understanding to build a work breakdown structure (WBS) for it Estimate the resources required to perform the work and make sure the timing of resource availability works. If all the people with the right skill sets aren’t available when and where you need them, develop a contingency plan for their acquisition Pay special attention to your estimates of personnel costs for staff not currently available. You can use To Be Determined (TBD) placeholders in your proposal (assuming it’s not for key personnel) but be sure the cost rate for those resources is realistic. There should be a lot of cost information available from your ERP system on similar past projects. Use it to benchmark your cost volume. It may tell you that the work can be done for less than you think. It may tell you that your proposal is consistent with prior projects, but make sure conditions haven’t changed. If that kind of information isn’t available, ask yourself why not. Growth Driver #3: Proposal Responsiveness Proposals often aren’t “one and done.” No one would dispute that the initial proposal submission should be absolutely the best you can do. Sometimes there’s no second chance, especially if the evaluation is Low Price Technically Acceptable (LPTA). But just as often, there will be amendments to the solicitation requiring a revised proposal. Sometimes it’s just a matter of clarifications or a change in the terms and conditions. Sometimes there is a substantive change in the government’s requirements. It’s not as common as it once was, but a round of Best and Final Offers (BAFOs) still occurs and the larger the procurement, the more likely that may be. It seems sometimes that a BAFO is nothing more than a mechanism to drive the price down – especially if there are multiple rounds of BAFOs on the same procurement. (Yes, that does happen.) The point is, refining the estimate, confirming availability of resources, or looking for alternative resources that might be more cost effective are all activities that should continue even after the proposal is in the hand of the Contracting Officer. You wouldn’t do that on a 90-day delivery order, especially if it’s a follow-on. But on a major procurement for a new customer or a must-win recompete? Definitely. And when it’s time to reprice, restaff or update the technical volume, the one thing you can count on is that the time allowed will be about half what it should be. Be prepared. And part of that is using tools that streamline that process. Manually updating proposals for changes, whether it’s a minor time shift or a major change in technical approach, can be time-consuming and error prone. What you should know: LPTA made up 28% of proposals for the respondents versus Best Value Over 50% of firms say their BD teams are under-resourced Companies with the highest win rates recognize the need for BD reporting tools Mid-Sized Businesses are using GWACs, MACs and similar vehicles for more than 32.5% of their annual revenue Source: Unanet GAUGE Report 2020. How you can succeed: Research matters: Know the customer before the solicitation is on the street – at least enough to know if your capabilities and qualifications are a fit for what they need. If it looks like your services are a stretch, don’t spin your wheels and waste resources chasing a low probability win. Standardize the criteria for your Probability of Win (Pwin) assessments and make those part of your “go/no go” decisions at every step. And, yes, reassess at every step. Don’t hesitate to cut your losses if conditions change. Research matters: Don’t rely on the solicitation to tell you everything you should know about the customers’ requirements. Every SOW has an unwritten subtext. The more you know about the customers’ real, day-to-day problems, the better equipped you will be to read between the lines of that solicitation. Research matters: Talk to the customers even after the proposal is in – just be careful not to violate the communication protocols of the procurement. When a solicitation amendment comes out that changes everything, well prepared offerors already know why it’s happening and how to react. Make sure your tools are up to the job. Managing three, four, or even five simultaneous active proposals is possible even with a manual process. What about 10 or 20? Whether it’s for estimating and pricing or technical volume management, put the infrastructure in place before the process becomes a problem. Want to learn more about GovCon strategies for success? Download the 2021 GovCon Success Guide for tips and best practices that will drive your firm to increased profitability.
The Bottom Line on Benchmarking: GovCon Wire
by Kim KosterGovCon, Unanet News
Mar 19, 2021
Kim Koster, Vice President of GovCon Strategy at Unanet, co-author of the 2020 GAUGE Report and GovCon Expert, has published a new article in GovCon Wire as a member of Executive Mosaic’s GovCon Expert program. “Successful businesses may be built on grit, guile and gut instinct, but they’re sustained over the long run by the hard strategic insight that comes from relevant, reliable business data. And for government contracting firms, there are few better sources for that insight than benchmarking using the GAUGE Report. For its ability to provide perspective on a firm’s relative financial health and competitive standing, and to identify areas to target for improvements that go directly to the bottom line, benchmarking has long been a best practice for government contractors. It enables them to assess where they stand versus their peers in terms of financial and project performance, expenditures, policies, strategies, and more.” Read her full article about the importance of benchmarking on GovCon Wire. To participate in the GAUGE 2021 survey, click here.
Why We Chose Unanet: Melwood, Inc.
by Kim KosterBusiness Development & Growth, GovCon, News and Announcements
Feb 24, 2021
Part of an ongoing blog series highlighting the decision to select Unanet’s ERP solution over other options. The firm: A D.C.-area nonprofit that supports children, youth and adults with differing abilities to work and play where and how they choose. Melwood, Inc. provides employment, job training, life skill improvement, supportive and recreational services to more than 2,000 people with differing abilities each year. To continue its mission and impact of helping train, employ and empower people with differing abilities, Melwood needed a solution to efficiently manage their projects and other operations. When searching for the right software, Melwood looked for an all-in-one solution that would allow them to streamline their processes, and provide a people-centered support team that truly understood their unique needs and operations. According to Greg Arteen, Melwood’s Vice President of the Information Systems Group, “With so many of our team members working on the front lines in the fight against COVID-19, it was important to us that we streamline our processes without disrupting the normal course of business in order to help our employees stay focused on what matters – keeping our federal workforce safe by providing them clean and sanitized workspaces so they continue doing the work of the nation.” Melwood will leverage Unanet’s ERP for a variety of important compliance functions including DCAA Compliance and SCA/CBA labor costing, and will also leverage Unanet’s contract management, finance and inventory functions, among others. Melwood will also use Unanet Connect, the industry’s first and only open ERP integration platform, to incorporate Melwood’s existing timekeeping software with Unanet. Melwood employees frequently rely on punch clocks for timekeeping, rather than complex web or mobile applications, and by integrating Unanet with Melwood’s existing timekeeping functions, Melwood can easily maintain its existing procedures while more efficiently managing the outcomes.
D.C.-based Nonprofit Melwood Selects Unanet for ERP Solutions
by Kim KosterBusiness Development & Growth, GovCon, Unanet News
Feb 24, 2021
February 24, 2021– Unanet, the leading SaaS project-based Enterprise Resource Planning (ERP) provider, was chosen by Melwood, Inc., a D.C.-area nonprofit and one of the largest employers of people of differing abilities in the country, as its project-based ERP provider. Unanet will enable Melwood to efficiently manage projects and other operations so it can continue its mission of helping train, employ and empower people with differing abilities. As a nonprofit that receives federal funding, Melwood will leverage Unanet’s ERP for a variety of important compliance functions including DCAA Compliance and SCA/CBA labor costing. Additionally, the organization will leverage Unanet’s contract management, finance and inventory functions, among others. Additionally, a critical component of Melwood’s decision to work with Unanet was the software’s ability to integrate with the nonprofit’s timekeeping software through Unanet Connect, the industry’s first and only open ERP integration platform. Melwood employees frequently rely on punch clocks for timekeeping, rather than complex web or mobile applications, and by integrating Unanet with Melwood’s existing timekeeping functions, Melwood can easily maintain its existing procedures while more efficiently managing the outcomes. Another reason Melwood chose Unanet is for its attentive and professional service team, which took the time to truly understand Melwood’s needs and tailor a solution that worked for their unique and specific operations. According to Greg Arteen, Melwood’s Vice President of the Information Systems Group, “With so many of our team members working on the front lines in the fight against COVID-19, it was important to us that we streamline our processes without disrupting the normal course of business in order to help our employees stay focused on what matters – keeping our federal workforce safe by providing them clean and sanitized workspaces so they continue doing the work of the nation.” “Melwood’s mission is extraordinary and it’s gratifying that Unanet’s ERP solution was chosen to help further their important work,” said Craig Halliday, CEO, Unanet. “We are the alternative to the status quo in ERP technology, and to impersonal service. For us, it’s rewarding beyond measure to have such an esteemed and important organization select Unanet as its ERP partner.” About Unanet Unanet is a leading provider of ERP and CRM solutions purpose-built for Government Contractors, AEC, and Professional Services. More than 3,100 project-driven organizations depend on Unanet to turn their information into actionable insights, drive better decision-making, and accelerate business growth. All backed by a people-centered team invested in the success of your projects, people, and financials. For more information, visit www.unanet.com.
Craig Halliday Shares Tips for Post-Merger Integration Success with Chief Executive
by Carrie MahonA/E, Cosential, GovCon, Unanet News
Feb 10, 2021
Unanet acquired Cosential in October 2020 in the midst of the COVID-19 pandemic, and previously acquired Clearview Software in October 2019. Craig shared his insights and experience about managing a post-merger integration during COVID-19 in Chief Executive: “To say the Covid-19 pandemic has been disruptive to our integration efforts would be an understatement. But even in the throes of a pandemic, meshing the people, processes, infrastructure, products, customer base and most importantly, the culture, of an acquired company can be done — and done well, if a little differently than in “normal” times.” Read the full article on Chief Executive.
GovCons gain Contract Management, Project Central Dashboard, and Unanet Mobile in newest ERP release
by Kim KosterGovCon, Product Releases
Jan 04, 2021
Today we unveiled new game-changing features and functions for our ERP platform purpose-built for GovCons. The new capabilities clearly establish Unanet at the forefront of ERP functionality and ease-of-use, giving customers more visibility, analytics, and real-time project management tools than ever before. Customers gain best-in-class technology while also benefitting from the dedicated service and support Unanet delivers. For GovCons, Unanet’s new release offers three primary enhancements: Contract Management, Project Central Dashboard, and Unanet Mobile. The enhanced Contract Management capabilities enable users to record, track and reconcile a contract’s value and funding by modification, aggregate contracts by customer and project type, and more. Users can associate a contract with as many projects as needed to account for CLINs, SLINs and Task or delivery orders. Changes are automatically reflected in an automatic audit trail, and reports reflect the latest contract details, information and modifications. The new Project Central Dashboard is an interactive dashboard in Analytics Studio that provides real-time, integrated project and financial insights. More than 45 different project-based metrics related to revenue, revenue backlog, revenue variance, profitability and many more are presented in graphs and tabular formats, providing detailed, personalized project views for project managers. Unanet Mobile is a new native application that allows users to input time and comments, set push notifications, request leave, and do it all directly from the mobile device of their choice. The simplicity, along with secure authentication, encourages consistent time input by employees on the go. Powered by Stripe, Unanet Pay is newly available for GovCons and will provide a significant increase in invoicing and payment flexibility resulting in increased efficiencies and improved cash flow. Inventory Management has features that allow project managers and accountants to view and report on inventory associated with their projects. While inventory is managed through best-in-class inventory solutions, the integration creates inventory transactions associated to the project and journal entry transactions documenting the inventory flow from acquisition to use. In recent months, GovCons have been hit with a variety of rule changes, new regulations and industry uncertainty, and 2021 promises to offer a similar roller-coaster ride. All the new features help GovCons have one, consistent and single source of truth for all their business information, and help them gather valuable real-time insight. This helps them accelerate projects, meet deadlines and be profitable. Unanet is committed to being a trusted counselor and knowledgeable expert to help GovCons navigate increasing change and complexity in their industries, through insightful, simplified project and financials management, contract management, invoicing, timekeeping, security compliance and more.
Unanet Releases New ERP Capabilities to Help GovCons Manage Subcontractors and Increase Analytics Insights
by Kim KosterGovCon, Unanet News
Oct 06, 2020
Dulles, VA, Oct. 06, 2020 – Unanet, the leading SaaS project-based Enterprise Resource Planning (ERP) provider, today released new features of its industry-leading technology that will help U.S. government contractors (GovCons) understand their businesses more thoroughly through increased analytics and help them simplify subcontractor management. The new features further deliver on Unanet’s promise to invest in and expand its award-winning ERP solutions so all customers continue to have best-in-breed technology to help them run their businesses more efficiently, transparently and cost-effectively. Today Unanet unveiled these major new capabilities: Analytics+ – Adding to the Q3 release of enhanced analytics capabilities, all cloud customers will gain new visual-based reporting that helps them solve business challenges and increase business intelligence throughout Q4. Analytics+ integrates seamlessly into Unanet’s ERP for real-time data insight, and ease-of-use with existing interfaces. Analytics+ provides Express View Reports, Out-of-the-Box Reporting, and 1034 Pixel Perfect Template. Unanet customers can also take advantage of Studio Analytics for Advanced Pixel Perfect Templates, Custom Reports and Dashboards, and more. Subcontractor Portal – Unanet’s cloud-based financial customers now have a best-in-class tool to simplify the on-boarding process for subcontractors, minimize time and expense exchanges, and streamline processes and communication with subcontractors. These tools enable customers to shorten time-to-cash, reduce manual processes, decrease accruals, and improve many other financial and business functions. Hours-based Accruals – Organizations that have hourly employees will now have leave accrued by hours work done all within Unanet, reducing errors, saving manual work, and improving speed and accuracy. “GovCons are under increasing pressure to operate efficiently, and with the latest in compliance, cybersecurity and technology,” said Kim Koster, vice president of GovCon Strategy for Unanet. “We’re constantly enhancing our purpose-built ERP so GovCons can stay one step ahead of the ever-evolving requirements and keep their businesses running smoothly, effectively and with the peace-of-mind the attentive Unanet team delivers.” In 2020, Unanet has delivered four major product releases, giving customers a regular cadence of enhancements and upgrades, without long waiting periods. As customers communicate to Unanet their latest needs and requirements, and as the regulations are drawn up, Unanet immediately works to build best-in-class tools so customers can be assured their ERP is always effective and productive. Unlike some ERP providers, Unanet builds each feature specifically to work with and enhance the existing ERP platform, so customers have a seamless, integrated function. About UnanetUnanet is a leading provider of ERP solutions purpose-built for Government Contractors, A/E, and Professional Services. More than 2,000 project-driven organizations depend on Unanet to turn their information into actionable insights, drive better decision-making, and nurture business growth. For more information, visit unanet.com. Follow Unanet at @UnanetTech on Twitter and Unanet-Technologies on LinkedIn.
Why We Chose Unanet: OptoKnowledge
by Kim KosterERP Software Best Practices, GovCon
Sep 17, 2020
First in an ongoing blog series detailing the reasoning behind a firm’s selection of Unanet’s ERP solution over other options. The firm: OptoKnowledge Systems, Inc. (optoknowledge.com), a Torrance, CA, company that develops imaging systems (hyperspectral imaging, night vision, situational awareness, and spectroscopy) for defense, security and environmental/energy applications. The company is primarily an R&D contractor for the Department of Defense, NASA and the Department of Energy. As accustomed as OptoKnowledge is to operating at technology’s leading edge as a developer of advanced imaging systems and sensors for night vision, drones, and other visibility-related applications, it needed an enterprise resource planning (ERP) system that could provide it with better visibility into its own business. Soon after purchasing the 30-year-old company in February 2020, OptoKnowledge’s new ownership realized the company could benefit from a new ERP system that could better support its strategic priorities — preferably one that’s fully integrated, proven in the government contractor space, and well-supported from a service standpoint. The effort to find a replacement for its inefficient and outmoded ERP system got off to a rocky start. The initial plan to transition from an obsolete version of that system to a newer version was abandoned, chiefly due to issues with data migration. Seeking another option, company officials reached out to their contacts in the GovCon space for recommendations. While the reports they got about one big-name ERP system were consistently less than glowing (mostly complaints about subpar support), the reviews their peers provided on another ERP software option were highly positive. Those positive reviews pertained to Unanet. Additional due diligence cemented Unanet as the right choice for OptoKnowledge, primarily for its strong data drill-down capabilities and its service and support, which got uniformly high marks from the current users with whom company officials spoke. A contract was signed soon thereafter, and OptoKnowledge is poised to implement Unanet’s purpose-built ERP software in November 2020. “We are so excited about the financial reporting,” says Ilana Gat, Chief Financial Officer at OptoKnowledge. “It’s impossible to ask staff to keep spreadsheets up to date, but with Unanet, our program managers will get real-time insights into their programs on a daily basis.” Using Unanet, she expects program managers will be able to see key information about their programs and projects in real time. She’s also looking forward to gaining a new level of granular insight into profit and loss by project/program, as well as the ability to drill into the data around individual transactions. The only drawback: waiting until these and other capabilities built into Unanet go live company-wide.
How a Project CRM Helps You Better Understand the Customer Journey
by Kim KosterA/E, GovCon
Sep 17, 2020
How’s your opportunity pipeline looking? What about the satisfaction levels of your current customers? Attracting new customers begins with understanding the needs of customers and improving their experience. The best way to do that is to establish a discipline for tracking and documenting customer touches and to have a method to analyze the data. This is where a project CRM comes in. What is CRM? Customer relationship management is a discipline for managing how you interact with both current and potential customers. These days, there are so many ways to get in front of or hear from customers: in-person meetings, blogs, social media, phone calls, webinars, emails, and so on. Project CRM software wrestles all of this information into one organized place and helps you better understand not only the roles and titles of who is buying your service or product, but the customer journey as well. Some of the benefits of a project CRM include: You gain instant access to prospects and customers in one central place. You can track the customer journey through the entire project lifecycle. You can gain insights into market trends and customer pain points and use this data to make better business decisions. You gain a better understanding of future revenue potential and resource forecasts. You can access a weighted forecast based on probability percentages. Our new ebook, The Business of Projects, is a guide to how ERP software can enable project success. Among the topics in this eBook is an introduction into CRM and the benefits of a project CRM solution. Download your copy of the ebook here and learn how ERP opens the door to capturing and winning more contracts.
For Third Consecutive Year, Unanet Earns Spot on Inc. 5000
by Carrie MahonA/E, GovCon
Sep 17, 2020
When you do right by your customers, your employees, and the communities you serve; deliver quality products; support those products with strong service; and do all this on a consistent basis; you get noticed. That’s the case for Unanet, which in August was named to the prestigious Inc. 5000 list for the third year in a row. This year, Unanet ranks no. 4,189 on the publication’s list of America’s fastest-growing private companies. Earlier this year, Inc. also placed Unanet in the top 10% of fastest-growing private companies in the D.C. metro region. Consistently landing among the nation’s strongest private companies is largely the result of recent customer growth in the government contractor (GovCon) space, as well as the architecture and engineering (A/E) industries. Unanet has been particularly successful at attracting customers that are seeking a more service-oriented ERP platform. “One-third of Unanet’s customers have switched to us from a competitive product, and this trend is increasing,” said Greg Guelcher, Chief Financial Officer, Unanet. “Our growth is a result of the steady investments we’ve made in our software and our team, all due to collaboration with and feedback from our customers. Our customer-first, people-oriented strategy is paying off.” “The companies on this year’s Inc. 5000 come from nearly every realm of business,” says Inc. editor-in-chief Scott Omelianuk. “From health and software to media and hospitality, the 2020 list proves that no matter the sector, incredible growth is based on the foundations of tenacity and opportunism.” Complete results of the Inc. 5000, including company profiles and an interactive database that can be sorted by industry, region and other criteria, can be found at www.inc.com/inc5000.
Optimize Your Business with Crucial Technology & Benchmarking Insights | The 2020 GAUGE Report
by Kim KosterGovCon, Government Compliance
Sep 17, 2020
Between the COVID-19 pandemic, CMMC compliance, and social unrest—not to mention the usual myriad of unique industry challenges—2020 has been an unprecedented, arduous year for the GovCon industry and beyond. With so much change and so many surprises, many contractors are left with their heads spinning, wondering where to turn. One thing is clear during this tumultuous period: one of the best sources of advice for GovCons is each other. There’s great benefit in learning how other government contractors are confronting challenges and opportunities similar to yours. Unanet and CohnReznick’s fourth annual GAUGE Report can provide this guidance. This report is a collection of survey results from over 1,450 contributors in the GovCon sphere and provides performance metrics and business practices that are shaping this current volatile government contracting landscape. “The year 2020 continues to be a season of reckoning,” the report authors observe, “as government contractors are either reaping the rewards of having laid a sound business and technology foundation, or paying the price of playing catch-up.” Technology is the theme of this year’s GAUGE and the report explores how GovCon leaders need to leverage technology to best position their companies not only during this season of remote work but for the next five years. Some major takeaways from the report include: Optimism impacted: Prior to the pandemic in early March, 84% of survey respondents reported that they were either very or cautiously optimistic about their business outlook. Near the end of March, the percentage of respondents reporting this optimism dropped to 68%. Project and resource success: 59% of respondents reported that 76%-100% of their projects are on or under budget, and 55% of respondents rated their resource management at a high level of maturity, an improvement over previous years. Slowly adapting new technology: 53% of surveyed contractors use a project-based ERP system, while 18% use an entry-level system and 29% rely on other generic ERP tools. With the focus on technology in this year’s report, it is clear that GovCons’ success going forward depends on them “empowering teams to be productive in any setting and adapting quickly to new ways of operating” through the use of technology. You can get your own copy of the GAUGE Report here and begin leveraging crucial industry information and best practices. We’re excited to hear how the report helps your organization establish and refine company goals in 2020 and beyond.
How ERP Software Drives Business Forward in the Era of Remote Work
by Kim KosterA/E, ERP Software Best Practices, GovCon
Sep 17, 2020
As executives fight to maintain efficiency in the remote-working environment driven by the COVID-19 crisis, one thing is becoming clearer: silos of information are a significant hindrance to business, particularly in this environment. Business leaders are increasingly worried about maintaining collaboration and visibility in their organization. ERP tools help enable that collaboration and visibility that businesses need, so there is one primary repository of up-to-date, meaningful information. Stacy Critzer, Unanet’s Chief Human Resources Officer, and Kim Koster, GovCon Expert and Unanet’s Vice President of Product Marketing, wrote an insightful article for Strategic HR Review about how ERP software fits into the context of the current remote work climate and how to banish silos, maximize resources, and improve outcomes. In the article, Kim and Stacy also review a case study of a healthcare operation in New York City that has been able to eliminate silos and enable collaboration even in the wake of COVID-19, a shining example of what other organizations can achieve. If you subscribe to Strategic HR Review, you can read the article here. Or, click here.
Bring the Parts of the Project Lifecycle Together With a Project-Based ERP
by Kim KosterA/E, GovCon, Project Management
Aug 03, 2020
For too many organizations, the various parts of the project lifecycle are not treated as being part of one single system and data is kept in individual silos. This is a recipe for project failure. Before we discuss these crucial parts of the project lifecycle that your organization must learn to incorporate together, let’s level-set on what exactly a project is. A project is a planned piece of work that provides either a good or service and has a scope, schedule, and cost. Each project has a lifecycle, a series of elements that contribute to a project’s completion. These elements include: CRM Opportunity pipeline Resource management Budgeting, planning, and forecasting Time and expense Project accounting Billing and revenue recognition Financials Payroll Purchasing Real-time reporting, analytics, and dashboards So, how do you get the parts of the project lifecycle to flow together and increase your chance of project success? Utilize the power of a project-based ERP. A project-based ERP is the ultimate project management control center. It places all the necessary information into the project manager’s hands and brings together every part of the project lifecycle. Our new ebook, The Business of Projects, is a guide to how ERP software can enable project success. This eBook spells out in detail the nature of project-based work, the concept of enterprise resource management, and how organizations capture new business. Download your copy of the ebook here and learn how ERP opens the door to better planning, execution, and financial management through more robust project data.
Analytics Capabilities for Government Contractors Highlight Latest Unanet Release
by Kim KosterERP Software Best Practices, GovCon
Jul 23, 2020
How to improve what is already the standard-bearer for project-based Enterprise Resource Planning (ERP) software for government contractors? By adding several features that enable GovCons to unlock new efficiencies and insight within their data. Announced in late July, the latest enhancements to Unanet’s purpose-built ERP software are analytics-focused — and designed to be simple to use and immediately impactful. They include: Analytics+, a capability we expect to quickly emerge as best in its class for its dashboard and reporting functionality. The new analysis and reporting capabilities build upon the software’s real-time data visualization features that enable GovCons to aggregate data from multiple sources across finance, accounting, and project management for automatically generated reports, including statements of cash flow. It’s included in customers’ cloud subscription. Analytics Studio, which is tailored to GovCons whose businesses demand advanced analytics and custom reporting to further mine their data for real-time insight. It provides a deeper level of interactive analysis and drill-down capabilities, with embedded, eminently customizable and feature-rich dashboards, including dashboards designed specifically for the C-Suite. Automated Invoice Attachments is a feature that gives finance teams a tool to shorten time to cash, with its ability to automatically generate required or supporting documents for invoices. Unanet’s new release is designed to equip government contractors with more tools to meet mounting business and compliance challenges, explained CEO Craig Halliday. “From the C-suite to the project management level, finance to operations, our new analytics capabilities allow for better decision-making across virtually every function.” The July software release is the first in a series of enhancements that Unanet expects to unveil over the course of 2020. You’ll be the first to know what our development team has in store to simplify life for our valued GovCon clients. In the meantime, to learn more about the latest software enhancements, click here.
How ERP Software Can Unlock Better Project Data, Insights, & Growth
by Kim KosterA/E, GovCon, Professional Services, Project Management
Jul 17, 2020
Do you have a complete picture of your project data? If your organization is stuck with multiple silos of project data, it’s difficult to access vital decision-making intelligence. Achieving project excellence takes strategic alignment of people, processes, and tools, which is no easy task. The most successful project-based organizations have learned to harness their project data by putting it into one place: the project-based Enterprise Resource Planning (ERP) tool. Our new ebook, The Business of Projects, is a guide to how ERP software can enable project success. This eBook spells out in detail the nature of project-based work, the concept of enterprise resource management, and how organizations capture new business. Each chapter contains an overview of a key part of the business of projects and how, with the help of an ERP solution, you can open the door to more complete project data, insightful analytics, and greater decision-making. The basics of a project-based ERP Capturing and winning contracts Project management, planning, execution, and analytics Financials tracking Considerations for compliance for government contractors Download your copy of the ebook here and learn how ERP opens the door to better planning, execution, and financial management through more robust project data.
An Up-Close Look at DCAA’s Ambitious Audit Plans for 2020
by Kim KosterGovCon, Government Compliance
Jul 16, 2020
Government contractors, prepare for closer scrutiny from the Defense Contract Audit Agency in fiscal 2020 and beyond. Having cleared its longstanding audit backlog, the DCAA has returned to performing a full range of audits, the agency’s director, Anita F. Bales, declared in a recent letter to the U.S. Congress. In fiscal 2019, the DCAA “focused more effort on other audits such as business systems, Truth in Negotiation Act, Cost Accounting Standards, and labor and material reviews,” she said in the letter, which accompanied a report summarizing the agency’s activities last fiscal year. “We also successfully met the Congressional requirement to complete incurred cost audits within one year of adequate submission as well as contracted with seven independent public accounting (IPA) firms to perform 101 incurred cost audits.” The DCAA’s renewed commitment to timely audits is expected to continue in the current (2020) fiscal year, putting the onus on government contractors to prepare for a busy compliance season. In particular, DCAA said it “prioritizes the audits that pose greatest risk to the government,” namely contracts that “involve significant costs, significant audit findings in the past, or circumstances that reduce the incentive to control costs, such as those inherent in cost-type of contracts.” Here’s what the agency says about various types of audits: Incurred cost audits “continue to be a priority to meet both the adequacy review (60 days) and completion (12 months) timelines.” Forward pricing audits “net the highest rate of return and are time sensitive because to be of value they must be completed before contract negotiations.” Special audits are prioritized in coordination with contracting officer needs. Other audits become a high priority “when DCAA or the contracting officer identifies a high-risk area such as inadequate business systems. DCAA assigns priority to additional audits based on individual contract and audit risks to the government.” To maintain timeliness with its audits and prevent another backlog, the DCAA indicated it plans to continue using IPA firms to conduct select incurred cost audits. To support a more aggressive audit caseload, the DCAA said it is focusing on recruiting, developing and retaining high-quality auditors and support staff, such as with hiring events and internship programs aimed at bringing college students into the fold and grooming them to become full-time employees. As it ramps up its caseload, the DCAA also has increased its industry outreach. In July 2019, it adopted the materiality guidelines from DoD’s Professional Practice Guide to “help oversight professionals plan their work and provide the information contracting officers need to make reasonable business decisions.” The agency also has been regularly engaging with industry groups, resulting in a proposed FAR change and improvements to the incurred cost electronic (ICE) model. It also is working with the acquisition community to mitigate the risks associated with using Other Transaction Agreements, or OTAs. The goal: ensure cost reasonableness “without hindering the speed that makes OTAs so valuable.” Moving forward, expect the emphasis on Truth in Negotiation Act audits to continue. The DCAA said it is stepping up efforts to train and educate its staff about TIN audits, and that beginning in fiscal 2020, its field audit offices will join its headquarters TIN team in conducting TIN audits. ”These collaborative, proactive efforts are vital as DCAA will double the number of hours dedicated to these audits in FY 2020.” Also expect the DCAA to continue to leverage technology — data analytics, “intelligent documents,” etc. — as it moves away from outdated Excel and Word-based audit tools. Looking ahead to fiscal 2020 and beyond, DCAA said it expects to “move away from complex, specialized audits performed by dedicated teams, like TIN and business systems, to performing these audits with our FAO staff.” The agency also plans to finalize its strategic plan in FY 2020, meaning more changes to audit processes and procedures could be forthcoming. We closely monitor the DCAA here at Unanet, so stay tuned to this space for updates.
One-Third of Unanet’s Customers Made the Switch From a Competitor. Here’s Why.
by Carrie MahonA/E, GovCon
May 22, 2020
One of the questions we get frequently from customers and prospects alike is, “Why Unanet instead of Deltek?” We welcome this question each and every time because it gives us a chance to explain why one-third of Unanet’s customers made the switch from Deltek. They tried the competition’s solution, and for some compelling reason, decided our solution would better meet their needs. The most glaring difference between Unanet and other ERP solutions is that Unanet GovCon was built specifically from the ground, up, for government contractors. Likewise, Unanet A/E was purpose-built for architecture and engineering firms. This means there are no bolt-ons, incompatible features, or awkward forcing of disparate solutions, which is rampant among competitive products. Designing purpose-built software requires an extra level of understanding of customer needs, along with a commitment to developing and refining solutions that actually enable customers to address their business challenges through smart engineering and elegant design. In short, it’s about walking in our customers’ shoes to understand exactly what they want from an ERP solution. As one customer, Frontier Technology Inc., learned after making the switch to Unanet from Deltek, purpose-built means their new ERP is more capable at handling business needs and growth. “I have done a lot of enterprise data work, and I can see that the architecture of the Unanet system was done correctly to handle a company like ours with rapid growth,” said Tom Batty, Director of Corporate Staff Operations, Frontier Technology Inc. Another common reason customers switch to Unanet is the real-time data management and access it offers. Too often solutions that were cobbled together take extra steps, additional credentials, and even require two different systems to find one specific data point. Information doesn’t flow through from one point to another. Unanet’s GovCon and A/E solutions deliver real-time information that’s been completely synthesized automatically, giving companies one single source of truth. This creates incredible efficiencies and saves customers time. Just ask Chantelle Miner, Financial Controller for Magnolia River, who, after her firm made the move to Unanet from Deltek, said, “Having the real-time data makes us so much more efficient. The time that we have saved on invoicing alone has been dramatic.” Purpose-built software with real-time data are two critical reasons customers made the switch to Unanet, but the third is probably the reason we hear the most: Unanet’s service. The people of Unanet are dedicated to serving our customers. From your first interaction, to implementation, to training, to ongoing maintenance and updates, Unanet prides itself on treating our customers with friendly, knowledgeable service. Through Unanet University, we provide highly relevant training, market insight, and expertise to keep customers apprised of what’s happening in their industries that may affect things like their financial management, regulations, and human resources. We treat our customers with respect each and every time, and add value in every interaction. David Baker, President of the Rehancement Group, another company that made the switch to Unanet from Deltek, said, “We are no longer at odds with our software provider. We have a true partner who is there to ensure our success.” Bigger doesn’t mean better…it just means bigger. And in many cases bigger means bloated, unnecessarily complex, and not always attuned to customers. Unanet is 100% dedicated to our customers’ success, with purpose-built software that provides real-time accuracy and insight. Want to learn more about making the switch to Unanet? Read about these companies that switched from Deltek to Unanet: Frontier Technology Magnolia River Semper Fortis Relyant Global The Rehancement Group WBB To learn more about switching your ERP software to Unanet, please contact our sales team.
Need Help with CARES Act, PPP, or Section 3610 Compliance? Read This First
by Kim KosterGovCon, Government Compliance
May 13, 2020
For government contractors and other firms that succeed in securing government relief during the COVID-19 crisis, an important question looms: What accounting, audit, and reporting capabilities must we have to meet the compliance requirements associated with these new programs? An article written by Unanet VP of Product Marketing Kim Koster and recently published in Compliance Week provides government contractors with the compliance answers they need to successfully navigate the CARES (Coronavirus Aid, Relief, and Economic Security) Act, the Paycheck Protection Program (PPP), and other federal relief programs. In the article, Koster identifies four critical areas where companies are likely to need an elevated level of end-to-end visibility to maximize the relief they receive, and to meet the new compliance responsibilities that come with it. She touches on the key data govcon firms will need to segregate and track to claim payroll relief under Section 3610, the documentation they’ll need in order to support their PPP loans and to claim CARES Act workforce retention credits, and other reporting and auditing responsibilities that companies will need to fulfill in pursuing the relief they need — and in justifying that relief with data when the compliance bell rings. To access the complete article, click here.
DoD Underscores Requirement of Segregating Covid-19-related Costs with 3610 Guidance
by Kim KosterGovCon, Government Compliance
May 11, 2020
For government contractors that managed to secure relief under the CARES Act or PPP, big questions still remain about compliance, reporting, auditing, and accounting. As usual, the details matter, and in the case of these emergency pieces of legislation, the details weren’t always addressed upfront. So, it’s good news that the Department of Defense (DoD) recently provided guidance for contracting officers (COs). Click here for a copy of the Class Deviation – CARES Act Section 3610 Implementation. But what’s most compelling is that these guidelines make it clear that it’s more critical than ever that GovCons prioritize their relationship with their CO during this unusual time, and have strong control measures in place. First, here are a few basic highlights from this recent guidance: COs must put in writing that a GovCon cannot perform its contracted work at a government facility due to facility closures, nor can they do the job via telework. Paid leave for employees idled by the facility closure, including sick leave, may be direct charged to the affected contract, and not as regular leave that would have been recorded as fringe expense in the normal course of business, so long as it can be attributed to the Covid-19 outbreak from Jan. 31 – Sept. 30, 2020. The leave charged to the contract must be necessary to maintain the workforce in a ready state to permit a return to work upon facility re-opening and to ensure the safety of the workers. Finally, and most important of all, the 3610 guidance is very clear that in order to be eligible for reimbursement of the cost of paid leave, GovCons must segregate these specific costs and actions so that compliance with these terms can be reasonably identified. The guidelines say, “segregation and identification of costs can be performed by any reasonable method, as long as the results provide a sufficient audit trail.” How can GovCons do this simply and effectively? This article in Compliance Week: Preparing for the compliance caveats that accompany CARES Act, PPP, gives good counsel on the value of ERP to resolve this segregation issue. Your Unanet platform will enable your business to accurately track, manage, and segregate costs associated with the Covid-19 outbreak so you can specifically demonstrate to your CO precisely where your business incurred costs that are eligible for reimbursement. Want to understand more about how Unanet can be a solution to helping your business segregate costs for reimbursement and manage your projects? Check out our white paper, The Business of Projects.
Will COVID-19 Impact CMMC?
by Kim KosterGovCon
Apr 08, 2020
Background The rollout of the Cybersecurity Maturity Model Certification (CMMC) as a mandatory contract requirement for government contractors working with the Department of Defense (DoD) is an enormous undertaking involving government, a newly established non-profit, many independent assessors who need to be accredited, and up to 300,000 firms in the Defense Industrial Base. The CMMC Version 1.0 model was published on 1/31/2020 and, separately, the non-profit independent CMMC Accreditation Board (CMMC AB) was established. The CMMC AB will be responsible for training and certification of independent assessors that will verify that government contractors are compliant with CMMC. In case you missed it, check out our quick review of the CMMC in our blog post. A key purpose of the CMMC is to provide a unified cybersecurity standard for DoD acquisitions. The model includes five levels that describe the maturity of a government contractor’s cybersecurity practices and processes. Levels 1-5 are labeled Basic, Intermediate, Good, Proactive and Advanced/Progressive Cyber Hygiene respectively. All DoD government contractors will be required to be compliant with at least Level 1, with government contractors who manage Controlled Unclassified Information required to be at Level 3. Levels 1-3 of the CMMC are largely based on the NIST 800-171 standard. Learn more about these levels and the CMMC in our white paper. The next key milestones for CMMC include developing training material by the CMMC AB and the training of the first group of assessors. This was scheduled for late March through June. The schedule was recognized as challenging given all the work that needs to be accomplished to develop a robust mechanism that is cost-effective and affordable, especially for smaller businesses. In the June timeframe, the first RFIs with the CMMC requirement will be issued, with the first RFPs in October 2020. In parallel, changes need to be made to the DFAR rules that will make the CMMC standard law of the land (i.e. replacing NIST 800-171) by October 2020. Impact of COVID-19 on CMMC Schedule Given the rapid and unanticipated impact of Coronavirus/COVID-19, there are questions from many industry observers whether this demanding and aggressive schedule can now be accomplished. Katie Arrington, the Chief Information Security Officer for the DoD’s acquisition office, and who leads the CMMC effort for the DoD, is very active providing briefings on status and progress. Katie maintains that the DoD intends to stay on schedule while respecting health concerns and to do that, will turn to do more remote training via webinars. In a recent webcast, Katie was adamant that training of assessors will occur by June and RFIs with CMMC requirements are still expected to come out in June 2020 as well. Katie also recently confirmed that the DoD has achieved another important CMMC milestone and officially entered into an agreement with the CMMC AB for its CMMC program. As of early April, the Memorandum of Understanding has yet to be released publicly but is another indication that COVID-19 will not impact the timeline for the CMMC requirement for all DoD government contractors. In other recent developments that may be related to help the CMMC rollout stay on track, the DoD has assigned the National Institute of Standard and Technology to help create requirements for independent assessors under the CMMC program. The CMMC AB will remain as the main entity for overseeing training and certification for third-party evaluators. Katie stated that the CMMC AB will also have the authority to make modifications to the credentialing process. Katie noted that NIST will work to prevent conflicts in the certification process in line with the CMMC AB’s “very stringent ethical rules”. In summary, Katie’s schedule for CMMC continues to meet its milestones. While the schedule is very aggressive, the odds are that CMMC rollout will continue as announced.
The Basics of Government Contracts
by Kim KosterGovCon
Feb 17, 2020
In this blog, we’ll explain the basics of Government Contracts. We’ll begin with the history and basics of each contract type, as well as obligations and the risks for each category. Also discussed are the different features of each contract and some of the newer hybrid contracts emerging in the industry. Brief History of Government Contracts: Contract types have been around since the very first financial transactions. In the beginning, all contracts were Fixed Price. When World War I came around, the concept of tear down and repair contract types were introduced. There was a Fixed Price order to tear down a piece of equipment that had failed. However, the problem was identified, and a proposal was prepared to repair it. Next, a Time and Materials (T&M) order was issued to make the repair. This type of contract is still very common today, even at your local auto repair shop. A major difference is that the auto repair shop usually does the diagnosis part at no charge. They look at it and tell you what’s wrong with it and do the proposal on speculation. When World War II rolled around, the concept of Cost Reimbursable contracts was born because there simply wasn’t time for definitive specifications. The contractors found themselves developing things while the specifications were being written. It’s just not possible to provide a fixed price for an effort like that; you don’t know where you’re going, much less where you are. In the 1950s, the government forayed into R&D, like project Moho, where the government gave Howard Hughes a contract to drill a hole to the center of the Earth, and he figured out he couldn’t do it. It was a Fixed Price contract, and rather than roll over and let the government do to him what they do to you when you fail to complete a Fixed Price contract, he sued. The resulting court case established the principle that when performance and cost risk is very high, the federal government should assume the risk, and the Cost Type contract was born. The DoD has experimented over the years with Fixed Price contracts in all kinds of areas, including R&D, mostly unsuccessfully. The last significant Fixed Price R&D contract was for the NAVY 8a12, the very first stealth aircraft. This was in the early 1990s, when stealth aircraft didn’t exist, and it wasn’t even certain that it was possible to have an aircraft that could evade radar. The researchers weren’t successful, and the government terminated them for default. This was eventually converted to a termination for convenience, and the last of the lawsuits were settled at over 20 years old. Fixed Price R&D’s have never been particularly successful, but, Fixed Price contracts make for good press. The reality is that when the risk is very high, both cost risk and performance risk, Fixed Price just isn’t appropriate. The three basic contract types are fixed price, also called Firm Fixed Price and abbreviated FFP. If you are looking in the dictionary of acronyms, you will find FFP under contract types, Time and Materials, or labor hour T&M contracts, and Cost Reimbursement or Cost-Plus type contracts. There is a lot of variation within these contract types. Your contract could have a mixture of Fixed Price labor and Cost Reimbursable for other direct costs. It could also be a fixed price contract with time as a unit of measure that is really Time and Materials. Another deviant is Fixed-Price services with level of effort, that has a special contract type that will be discussed later. There can be several combinations here and these mixed contracts are referred to as hybrids. Hybrid contracts are experiencing an increase in popularity. So how much money does the government spends on these contracts, and how much is allocated to each type? The chart below is not as easy to analyze because the annual totals are changing, but you can see the contract percentage mix. Note that there is a lot of money in fixed price, this is not because fixed price is inherently better or worse, it because very large production and construction contracts are always fixed price. While it is a lot of money, it represents a relatively small number of contracts. You will notice that cost type contracts remain between 31% and 32%. This stability is a result of the principle that what the government buys determines the level of risk and the level of risk determines the type of contract. All the pounding on the podium that the politicians do and all the preferences that the administration states for the types of contracts has had little impact for 20 years. The number of dollars spent on caucus type contracts is still roughly the same proportion—approximately a third of all procurement spending—simply because about a third of everything the government buys can’t reasonably be fixed price. This is because an important factor is unknown: either the delivery specifications, the delivery schedule, when we want it, where we want it, what we want to buy, or something similar, that makes the risk inordinately high. What is the difference between contract types? Firm Fixed Price contracts: This contract type should be used when requirements are known and can be precisely described. We also know exactly when we want it and where we want it. Cost of performance can be reasonably predicted. We know what it ought to cost and the risk is relatively low, making a fixed-price appropriate. Time and Materials contracts: This contracting type is used when requirements are poorly described and we don’t know exactly what we want or exactly when or where we want it. It is typically services; the cost of performance can be predicted with a reasonable degree of certainty with respect to the cost per hour. However, when it’s going to be performed, where it’s going to be performed, and which categories of labor might be used are less understood. With the unknowns, the use of individual delivery orders is appropriate. Often T&Ms are Indefinite Delivery Indefinite Quantity contracts (IDIQs). The basic contract’s an empty template and the delivery orders carry the money specifications and other details. Cost Reimbursable contracts: This type is a good option when the requirements or ability to fulfill the requirements are uncertain. In the case of Howard Hughes and project MoHo, it wasn’t certain that the task the government gave him could be even be completed, a perfect example of the use of cost reimbursable contracting. It is also appropriate when we are sure something can be completed but we are unsure of the cost. When costs cannot be predicted with any degree of certainty, a cost type contract is appropriate. Fixed Price Contracts Let’s look first at the fixed-price contract. This category can be broken into two different contract types: Fixed Price completion contracts and Firm Fixed price. Fixed Price Completion Contract: The contractor’s obligation is to simply deliver the goods or the services. The government’s obligation is to pay on delivery, to pay promptly, provide inspection acceptance, and presentation of an invoice are all required. Once those things have been fulfilled, the government must pay the agreed upon price. This type of contract is most of the fixed price contracts. Fixed-Price Level of Effort Contract: The contractor’s obligation is to deliver exactly the hours specified in the contract level of effort. If you don’t meet the goal, the contract requirements are not fulfilled, and you don’t get paid. If you go over, you don’t get paid any more. This is a fixed price contract, but it’s dependent on fulfilling exactly a certain level of effort by labor category. Firm Fixed Price: The government’s only obligation is to pay, once all the hours are delivered as specified in the contract. However, certain fixed level of effort contracts will occasionally have a special provision in them or clause that treats them like a Time and Materials contract during performance, especially if they’re going to last more than three or four months. This means the contractor does not have to finance the entire performance of the contract, only getting paid at the end. Time and Materials Contracts Time and Materials contract: This type is used when there will be non-labor costs involved in the contract like travel, materials, and usage of equipment. Typically, travel, materials, and other direct costs (ODCs) are reimbursed at actual cost. The government’s obligation here is to pay for the hours that are delivered and accepted upon pursuant to a proper statement of work. Acceptance of hours under a T&M Contract is one of the steps. There is a provision in every T&M contract that allows the government to require that hours that were not acceptable be reworked at no cost. It isn’t invoked very often but can be very expensive. Cost Reimbursable Contracts Cost Reimbursable contracts: This type comes in multiple variations, with the two basic types being completion type and level of effort. These are often referred to as a “best efforts statement of work”. The contractor’s obligation is to provide his or her best efforts in pursuit of the objectives stated in a statement of work. There is no other obligation under a cost type contract whether it’s completion type or level of effort. When the money runs out, you are supposed to stop. If there is a cost growth after the contract is completed, like rates and direct rates, you can collect that over and above the original estimate. The government’s obligation is to reimburse the contractors total cost of performance, if the contractor has abided by all the allowability and eligibility rules. Contracting Risks Risk is inherent in all contracts; it just depends on what side of the contract you sit. It is a very important aspect of contracting and it comes in two forms: performance risk and cost risk. Performance risk revolves around these questions: Can this be done? Is the schedule realistic? Is the timeline attainable? The contract will establish responsibilities in the event the contract cannot be completed or completed on time. Cost risks are used in situations where we know something can be done and how long it will take, but we do not know the final cost. For example, this can be due to fluctuation in precious metal costs that are driven by market supply and demand. A very important yet often overlooked aspect of a contract is obligations. If you are performing services or delivering goods to the federal government, you need to understand your obligations under the contract and the government’s obligation to you. Fixed Price Risk Fixed price completion contracts performance risk for the contractor is very high. There are obligations to perform: deliver the goods, deliver the services, no matter what it costs. So, both performance risk and cost risks are very high. The government’s risk on a Firm Fixed Price completion contract is very low. They have no obligation to the contractor to pay or do anything else until the goods or services are delivered, inspected, and accepted, then they pay. That’s about as low risk as it gets. For the level of effort Fixed Price contract, it’s exactly the opposite. There the performance risk is very low, and the cost risk is also moderately low, because the contractor’s sole obligation on a fixed price level of effort contract is to furnish the hours purchased—exactly the hours purchased, no more, no less. For the government the risk is high, because they’re not assured that when the level of effort has been provided, that the job will be done. All they know is how many hours they’re going to get. They don’t know what work is going to be finished, so performance risk is high on that. There is a variant of fixed price contract called a fixed price incentive contract. This is always a completion type. With this type, the government puts into the contract what are called cost shares, so if the contractor underruns the contact, the government shares part of the savings. On the flipside if the contractor overruns the contract, the government pays part of the overrun, not all of it. So, it’s still high risk for the contractor, but the risk is less than with Firm Fixed Price. Time and Materials Risk For Time and Materials contract, they are always level of effort contracts, because that’s what a Time and Materials contract buys: hours. The contractor’s performance risk is very low, because the only obligation is to furnish the hours. The cost risk is also moderately low because remember part of Time and Materials is Cost Reimbursable so there you’re going to get back whatever you spend. It’s only the labor that has any risk at all, and that’s only the pricing of the labor and the indirect costs. If your pricing model is good, then the cost risk is going to be low on the labor portion of a Time and Materials contract. The government’s risk is just like a fixed price level of effort; it’s going to be high because there’s no assurance they’re going to get what they want. The only assurance they have is that they’re going to get the hours they ordered. Now the cost risk is relatively low because they know exactly what every hour is going to cost upfront. What they don’t know is whether they’re going to get what they wanted out of those hours or not, and that’s why the performance risk is high. Cost Reimbursable Risk For all the cost type contracts—whether it’s fixed fee or an incentive fee—where the contractor has an incentive to achieve something technical, they will get more fee if they achieve that objective. For the contractor, performance risk is very low across the entire Cost Reimbursable contract spectrum. Why? Because the contractor has no obligation except to do their best. Cost risk is very low on cost plus fixed fee, incentive fee, and award fee contracts because the government’s going to reimburse all the costs. That’s the obligation of the government under a cost type contract; the government’s risk is very high. The reason it’s very high is because we don’t know whether the task can even be done or not, or—if it is possible—how much it’s going to cost. That’s why we’re in a cost type environment to begin with, so the government’s risk is as high as it gets in the cost type environment. Hybrid Contracts This contract type evolved from a strong Government/DOD preference for fixed price contracts. These contracts feature multiple characteristics of various contract types but are labeled as fixed price. For example: Fixed Price Labor but Cost Reimbursable sub contracts Labor billed as a unit of time rather than hours, such as a Fixed Price per month, but then they go on to define month as X number of labor hours, so it’s really a Labor Hour contract, or a Time & Materials Contract. However, because it is described in the statement of work as a Fixed Price per unit of time, it might be reported in the data as a Fixed Price Contract. DCAA audit with hybrid contracts Sometimes these hybrid contracts will contain the allowable cost and payment clause. If they do, that triggers the requirement for an Incurred Cost Submission. DCAA considers the Fixed Price hybrids, if they have cost type features, to be cost type contracts. They look for them in the Incurred Cost Submission schedules, and they will reject the submission when they find a hybrid contract that has been “improperly classified”. These things are difficult to detect and they’re often missed, especially on a cursory review, and DCAA will sometimes miss them until it’s time to audit the incurred cost submission, three, four, or five years after the costs were booked. They then find that the contract was misclassified, reject the submission, and it must be done all over again. The Incurred Cost Submission is used to establish a firm’s indirect rates for each year. Your fringe rates, your overhead rates, your General and Administrative or G&A rate, your Subcontract and Material Handling or SCMH rate, this is required if you have any contracts with the Allowable Cost and Payments clause in them. It is not determined by contract type. Contract type should be determined whether the clause is there or not, but if the clause is there, then the incurred cost submission is required, so it’s worth looking in your contracts and contracts groups to determine whether the clause is there or not, and not look at what the contract type says it is. Conclusion What does the government look for in selecting contract types? Here is where a government contract really differs from a commercial negotiation. In the commercial world, the contract type is a matter of agreement between the parties. The buyer and the seller agree on what kind of arrangement they’re going to have, but in the government world, that’s all determined before the solicitation is ever issued for contractors to bid on. In the government contracting world there is not a choice of contract type. Competition, price, cost, complexity, frequency of need, and segregation/fragmentation are all factors that play into the upfront contracting type decision made by the government. As a government contractor, you may have no choice about the type of contract you are bidding on, but you sure have the choice to understand the impact that contract types have on your overall financials. Selecting the right tool, one battle tested by government contractors can help you navigate the financial nuances of each contract type. To learn more about how Unanet can help you effectively manage your government contracts, contact us.
The CMMC Has Arrived. Here’s What DoD Contractors Need to Know to Comply
by Kim KosterGovCon
Feb 06, 2020
Government contractors that want to do business with the U.S. Department of Defense (DoD) soon will have to prove to a third-party auditor that they meet new elevated cybersecurity standards to be considered for DoD contracts. The new DoD compliance regimen known as Cybersecurity Maturity Model Certification (CMMC) was released as Version 1.0 on January 31, 2020. It’s based on a unified cybersecurity standard modeled after management maturity models used by other entities inside and outside the government, with a set of five levels that describe the maturity of a government contractor’s cybersecurity practices and processes. The CMMC could have major compliance implications for DoD contractors, as detailed in a new white paper from Unanet, a leader in ERP software purpose-built for government contractors. We’ve been following the CMMC process closely here at Unanet. To assist government contractors in their efforts to comply with the policy, we have integrated capabilities into the Unanet software platform to support the relevant technical requirements within the new model. What’s more, our Cloud Operations team has been diligent about keeping abreast of new DoD policies and has taken the necessary steps to ensure that its processes and procedures are similarly aligned with CMMC and NIST 800-171 standards. For information on how Unanet can support and simplify your organization’s compliance with Federal government requirements, contact us.
NIST 800-171 and CMMC Compliance for Government Contractors
by Kim KosterGovCon
Jan 31, 2020
The initial deadline for government contractors to be compliant with NIST SP 800-171 was December 31, 2017, but that passed and there was much discussion in the community whether this would be a focus for contracting officers. Recent events have brought cybersecurity to the fore with the announcement of the Cybersecurity Maturity Model Certification (CMMC) and it is clearly a very high priority now in the DoD community. This blog post helps explain how the standard applies to your company. Every day, the news is filled with stories about cyber-attacks or breaches. What if one happened to your company, would you be ready? How do you get started? One of the best ways to protect your company is to begin to define security processes, procedures, and controls, and the time to start is now. Being prepared to handle cyber-attacks will ensure that your business operations and valuable data are protected. As a government contractor, you have the added responsibility of safeguarding our nation’s valuable data assets. To guarantee that risks are mitigated, cyber risks standards are now being applied to contracts that are issued by the DoD. The standards are outlined in the Defense Federal Acquisition Regulation Supplement (DFARS). The DoD requires contractors to demonstrate cybersecurity adherence for protection of Covered Defense Information (CDI) and Controlled Unclassified Information (CUI), or Unclassified Controlled Technical Information (UCTI). If there are any doubts about the nature of your data, make sure to discuss with your Contracting Officer (CO). Exhibit 1 – Types of Information Expect to see the following DFARS references in your contract. You will be expected to demonstrate compliance to these standards. Exhibit 2 – DFARS Clauses – Cybersecurity The three DFARS clauses above mandate that defense contractors adhere to the security requirements, demonstrating cybersecurity protections are adequate to protect information from attack. The security requirements are specified in National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171, “Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations.” For ease of use, the security requirements are organized into fourteen families. Each family contains the requirements related to the general security topic of the family. There are 110 controls around non-classified controlled information. This sounds like a lot but keep in mind the type of information that is being protected. In many cases, these controls represent best practices that you may already have adopted. 14 control families: Audit and Accountability Identification and Authentication Awareness and Training Incident Response Media Protection Risk Assessment System and Information Security Physical Protection System and Communication Protection Security Assessment Personnel Security Maintenance Configuration Management Access Control Defense contractors must also have in place a mechanism and communication plan if they identify an incident or breach. The notification must happen with 72 hours of the breach. Incident reporting is done via the DoD’s Defense Industrial Base (DIB) Cyber Incident Reporting & Cyber Threat Information Sharing Portal. Be prepared to address the necessary information on the form and provide supporting documents and evidence relating to the breach. What Do You Have to Do to Reach NIST 800-171 and CMMC Compliance? Contractors initially faced a deadline of December 31, 2017 to attain compliance with all the security requirements in NIST SP 800-171. Contractors that did not have all the NIST controls implemented were to submit a written explanation of how 1) the required security control(s) is not applicable, or 2) an alternative control or protective measure that is used to achieve equivalent protection. All controls were to be addressed, either through implementation, remediation, and/or documented explanation of non-applicability. In June 2019 the DoD announced the Cybersecurity Model Certification which builds on, and formalizes, the requirements of NIST 800-171. The implications of CMMC are significant: All DoD Contractors will need to become CMMC Certified by passing an independent CMMC Audit to verify they have met the appropriate level (1 – 5) of cybersecurity for their business. The Federal Government will determine the appropriate level for the contracts they administer, and not all contracts will require the highest levels of security. The required CMMC level will be contained in sections L & M of Request for Proposals making cybersecurity an “allowable cost” in DoD contracts. Audits will be performed by an independent CMMC Third-Party Assessment Organization (C3PAO) that has been accredited by the CMMC Accreditation Body. The following important milestones have been identified: Contractors should determine now where they stand regarding NIST 800-171 controls and the CMMC Level they want to achieve in order to be certified by the 2nd quarter of 2020. In November 2019 the DoD released additional drafts of the CMMC Levels and their associated NIST 800-171 controls. In January 2020 the official CMMC Levels and requirements will be released. The DoD will also announce the non-profit that will be in charge of the certification process who will start training independent Certified 3rd Party Assessment Organizations to conduct audits on DoD contractor information systems. Certifiers will be available soon thereafter to begin audits. There is likely to be a big backlog since there are an estimated 70,000 companies in the Defense Industrial Base requiring audits in a short time-frame and a very limited supply of certifiers/auditors. In June 2020 the CMMC requirements will be in Requests for Information. In late 2020 DoD contractors will need to be certified to bid on Requests for Proposal. More information on Cybersecurity Maturity Model Certification is available from Office of the Under Secretary of Defense for Acquisition & Sustainment at: https://www.acq.osd.mil/cmmc/draft.html Getting prepared for this requirement is important for your company. Unanet is participating in industry groups and working with partners to carefully watch each draft of the CMMC requirements prior to the final version being published so that we can support our customers CMMC certification efforts. You may consider hiring a consulting service to assist you on this journey. It is critical for the overall success of keeping and winning new government contracts. Your Unanet Project Management and Accounting System The Unanet hosted environment on the AWS cloud will provide the basis for your compliance. We have been diligent regarding compliance requirements as they have been published and updated. Unanet undertakes, and passes an annual independent SOC 2 Plus audit which addresses the NIST 800-171 requirements. This section discusses NIST 800-171 controls which relate to: Multi-Factor Authentication Identification & Authentication Controls Cyber Incident Reporting Data Encryption Multi-Factor Authentication To deliver robust support for individual customer’s requirements for multi-factor authenticated access both to Unanet and other information systems which contain CUI, Unanet integrates with leading providers of Identity and Access Management (IAM) tools such as OneLogin, Duo and Okta, and other providers, via SAML. Identification & Authentication Controls IAM vendors, such as those identified above, include robust capabilities related to logon management, and password complexity and reuse that satisfy the relevant NIST Controls. Prompt Cyber Incident Reporting Customers using Unanet’s cloud offering will be notified of any unauthorized intrusion. Data Encryption The requirements for data encryption are met through use of SSL, and the availability of the Unanet cloud platform in a FedRAMP Moderate environment that uses data encryption at rest. Contact your Customer Success Manager for more information. US-Based Support You should also be aware that all Unanet software is developed, hosted and supported in the United States, and exclusively by US citizens. This is not a requirement of the NIST standard. It does, however, provide an important additional measure of assurance to government contractors. This is especially important in comparison to other industry ERP software developed and supported in countries known to conduct state-sponsored hacking of US organizations.
Could Your Small Business Benefit Big from Runway Rules for Government Contracts?
by Kim KosterBusiness Development & Growth, GovCon
Jan 15, 2020
Recent initiatives adopted by the U.S. Small Business Administration to act on 2018 legislation are expected to open the door for more small businesses to vie for federal government contracts. Enacted by SBA in January 2020, the long-awaited rules implement provisions of the Small Business Runway Extension Act of 2018. As detailed in a 2019 Unanet-sponsored webinar on recent legislative and regulatory developments impacting small businesses, the law extends the look-back period for calculating the size of a business (based on annual revenue using receipts-based size standards) from three fiscal years to five fiscal years. Here at Unanet, we expect this “runway” extension will be a positive for small businesses by essentially enabling more companies to stay within the small business size standard for the purposes of competing for federal contracts. In particular, it may enable companies that have experienced a recent surge in annual revenue to retain their small business status and thus their eligibility for small business set-asides. For more on the law and the new rules that implement it, check out this article in Government Executive. Want to tap into Unanet’s expertise in small business government contracting for a deeper understanding of the new rules and how your company may benefit from them? Get in touch! We’re here to help!
Cash is King for Government Contractors: How to Accelerate Cash Flow
by Kim KosterBusiness Development & Growth, GovCon
Nov 05, 2019
The ability to generate positive cash flow is important for a government contractor to create value and for so many small businesses, lack of cash can result in failure. Profitability is a good sign, but it’s not sustainable if the profits are stuck in accounts receivable (AR). There are two important metrics you can use to evaluate cash flow: Days sales outstanding (DSO): the number of days between making a sale and collecting payment – calculated for the year by dividing AR by Annual Sales and multiplying by 365. Invoice cycle in days: the number of days between the beginning of the billing process and customer acceptance. Keeping these numbers as low as possible ensures that your company can put cash to use more quickly. Days Sales Outstanding (DSO) In the 2019 GAUGE Report, 70% of respondents reported DSO below 45. Contractors are focused on reducing DSO, which has improved from last year in the <46-day categories for companies of all revenue scales. Breaking it down by revenue scale, companies with higher revenues tend to have higher DSO. Among those with revenue up to $25M, 80% have DSO below 45, compared to just 37% of companies with revenue above $101M. Compare your DSO to others in your revenue band. Are you better or worse than the respondents? Invoice Cycles Since last year, invoice cycles are 12% better in the <11-day categories, which signals a concentration on process and tool selection. The faster you can invoice, the faster you can turn your cash. Errors in the invoice cycle can slow down the process and keep you from being paid. As government contractors, you will need to make sure you are current on the regulations and have all your I’s dotted and T’s crossed. Breaking it down again by revenue scale, we see trends similar to DSO. The speed of invoice cycles for companies with up to $25M of annual revenue surpassed the other revenue scales in the survey. Compare your invoice cycle to others in your revenue band. Are you better or worse than the respondents? Characteristics of an ERP with Cash Acceleration in Mind Cash is king for government contractors! As a GovCon, it is critical to be able to automate and shorten the bid-to-bill lifecycle and to keep revenue recognition and billing completely in lock step. When looking for a tool, it is important to have: A time application that is part of the project based ERP system so that billing can be done quickly Traceability of all transactions Multiple, standard invoice formats to be used across projects, showing summary or detailed level information Ability to hide or show cost element detail on Cost Plus invoices Ability to include Fixed Price, Time & Materials, Pre-Bill Labor, and Additional Items on the same invoice Ability to defer items from the current invoice for future invoicing Ability to add one-time items such as additional fees or discounts After switching to Unanet, Phase One Consulting Group completes all month-close procedures in 5 to 7 days, reduced their invoicing process from 20 to 7 days, and improved DSO from 60 to 50. To learn more about cash acceleration for your government contracting organization, read Unanet and CohnReznick’s 2019 GAUGE Report. The GAUGE Report is a valuable benchmarking tool for GovCons who seek deep insights into industry practices and metrics. Download your copy today!
Clearview and Unanet Combine to Accelerate Development of InFocus
by Lucas HaydenA/E, GovCon, Professional Services, Unanet A/E News, Unanet News
Oct 17, 2019
Unanet, a leading SaaS project-based Enterprise Resource Planning (ERP) provider, has acquired Clearview Software to continue and accelerate the development of InFocus as the leading project-ERP software for Architects & Engineers. Why Unanet? This is a strategic decision that included many factors. We have had no shortage of interested investors over the years, and while past opportunities presented to us meant potentially losing our culture and control of the direction of our product, with Unanet we are able to maintain our focus with additional resources. Additionally, what separated Unanet from the rest was our similarity in our culture and goals. Both we and Unanet have been bootstrapped, founder-owned and operated companies, and we are walking through this door together as we look to maximize our potential. Will InFocus continue to be supported and developed? Absolutely. We’re very excited about the opportunity to put more energy and effort into further developing InFocus. It was one of the major factors in choosing Unanet. We also just released a major InFocus update to all of our customers who received new features at no additional cost. We have more releases already scheduled for next year and are continuing our commitment to product development and support. Will Clearview be shifting its focus away from A/E? Absolutely not. We were looking for a partner that would help us serve more of the A/E market. By combining our resources with Unanet, we will be able to compete with legacy vendors in our market more effectively. There’s a lot of work to do here, and we’re very excited about that. What if I just bought InFocus? You made the right decision and your investment just appreciated in value. We strongly believe that our partnership with Unanet will drive InFocus forward in ways that would have been more difficult otherwise. Who do I contact for support now that Clearview is part of Unanet? Is my account manager changing? Nothing has changed on that front, and all Clearview staff members remain in place. Our current and future customers will continue to reach us at all of our previous contact methods and you will have all the same contact personnel as before. We are dedicated to continuing our excellence in customer service and have increased our support and sales staff in the recent weeks to support our planned growth. What does the future look like for Clearview? The future is bright! Clearview will now have access to more resources to develop and support our software than ever before. We plan to continue adding staff, features and support tools to help our customers run their firms on the best ERP software in the A/E industry.
Unanet 19.1 Release Includes Expanded Capabilities for Purchasing and Reporting
by Lucas HaydenAccounting, GovCon, Press Releases, Unanet News
Oct 04, 2019
Unanet 19.1 Release Includes Expanded Capabilities for Purchasing and Reporting Dulles, VA, October 4, 2019 – Unanet, the leading project-based Enterprise Resource Planning (ERP) provider, has announced the availability of Unanet 19.1 for On Premise customers. Cloud customers will be migrated on October 19. More than 1,200 project-driven organizations rely on Unanet to manage their projects, people, and financials. The latest release of Unanet includes expanded capabilities for purchasing and reporting, including the ability to create a Vendor Invoice for each Purchase Order with matched transactions, Purchase Order export and import, Vendor Invoice Export, the ability to attach documents to a bank account reconciliation, added approval status for Purchase Requisitions, Purchase Orders, and Vendor Invoices, and more. “This latest Unanet release continues our investment in product enhancements driven by customer input. Unanet has unique capabilities to help professional services organizations optimize their purchasing processes. This release includes very popular requests from our customers that will help accelerate subcontractor management with new features for approval reporting, alerts, and automating labor intensive processes,” commented Richard Hayden, Unanet’s Senior Vice President of Marketing. About Unanet Over 1,200 professional services organizations trust Unanet’s ERP platform to scale their businesses while drastically reducing G&A in a “Single Source of Truth”. Unanet delivers resource scheduling, budgeting & planning, time & expense reporting, billing & revenue recognition, real-time project management analytics and dashboards, GL, AP, AR, purchasing, cost pool calculations, and indirect allocations, in one integrated system. unanet.com Media contact: Richard Hayden Senior Vice President of Marketing, Unanet 703-689-9581
Building a Strong Opportunity Pipeline
by Kim KosterGovCon
Sep 21, 2019
Why Should You Manage Your Pipeline? Pipeline = Strength of the Business Pipeline = Growth or Velocity of the Business Pipeline = Direction of the Business Pipeline = Financial Health of the Business Let’s start off by level-setting on the definition of an opportunity pipeline. For a project-based business like yours, it is the visualization and/or measurement of contracts or projects that you will attempt to win over time. The time horizon can be “time now” to 10+ years into the future depending on the planning needs of your business or the length of your sales cycle. An opportunity pipeline is the incubator for your business growth and it should reflect your company’s overall business strategy. Potential opportunities in the pipeline will be in different stages as defined by your company’s business development processes. Often pipeline is depicted with a funnel. The top of the funnel is wide and it is taking in potential opportunities for new and exciting projects. The opportunity will then move through the business development decision gates (down the funnel and will either continue through the gates or be eliminated through the process) defined by your company until it reaches the Request-For-Proposal (RFP) Stage. Out of the tip of the funnel will come projects that you have won and that you must now execute. Also important are the losses and understanding why you lost. Keeping a set of lessons learned will make sure you don’t make the same strategic mistakes again. Having a gated and structured BD process will assure you are bidding on the right opportunities and making the most out of your bid and proposal budgets. Pwin = Probability that your company will with the business based on discriminators, competition, or other factors. Pgo = Probability that the customer will fund the project. Pwin x Pgo = Probablity of Award (POA) With structured tracking, valuable reports and KPIs will be available to help make those critical business decisions. You will be able to analyze what is happening to opportunities throughout the process, look for patterns, see which portfolios are the most profitable, forecast your labor demands, and project the trajectory of your business (funded vs. unfunded backlog for example). A structured process will also improve the chances of pursuing the right opportunities and closing more deals. Want to learn more about pursuing the right opportunities? Download this free go/no-go calculator from our partners at Cosential. Pipeline Management is the Starting Point for the Project Lifecycle Unanet is a powerful project-based ERP solution that can truly help your business manage the lifecycle of the project from pipeline to closeout. It is the only project-based ERP system today that provides one system for projects, people, and financials. What do You Need From a Tool to Manage Your Pipeline? Customer Relationship Management (CRM) – track your customer interactions. We recommend Cosential CRM by Unanet. Contact categorization for easy reference (decision maker, geographic location, golf buddy, etc.) Workflow optimization assigning tasks and providing notification Opportunity tracking by phase Easy to use reporting, dashboards, and metrics to direct business decisions Real-time data Project notes and code fields for unparalleled analytics Resource demand planning with both current and TBD resources Ability to shift forecasts to the right or left Ability to make POA adjustments as opportunities moves through the funnel One-click transformations from proposal project to an executable project Cloud based system so there is 24/7/365 access to your information What are the Results of Better Managing Your Pipeline? Better pipeline management has a variety of positive outcomes. You will be able to experience higher win rates as you have gained more visibility and control over your entire BD process. You will be better able to evaluate opportunities and will spend your valuable time bidding on the right opportunities at the right time for your company. And finally, you will be able to maximize your bid and proposal expenses.
5 Steps to Resource Management Maturity
by Kim KosterGovCon, Resource Planning
Sep 09, 2019
Where do you stand with your resource management maturity? About 55% of respondents in our 2019 GAUGE Report said they have reached resource management maturity for their organization. Does your business fit into this category? Resource Management Maturity People really are the most important asset a company has, yet so many companies struggle to truly manage this resource. How much more profitable would you be if you increased utilization of your resources? How much more on-time would your projects be if you had the right people at the right time for the right tasks? In this blog, we’ll walk you through 5 steps to resource management maturity so you can see not only at what level your organization currently sits, but where you’d like to go in the future. Resource Management Maturity Level One – Ad-Hoc or Initial At this level, achieving resourcing goals depends on individual effort and heroics. Work gets done but it is not sustainable for the long term, and key staff may be lost to burnout. How to move from Level One to Level Two: Agree as an organization that you are ready to mature your resource management practice! Create and document policies and procedures Policies should establish best practices for your organization Assure they will help the teams be successful Make sure there is a repository for easy access Feedback loop to make sure policies are being followed Create a self-audit plan Concentrate on the basics – resource names, availability, skills, and utilization Define Key Performance Indices (KPIs) for your project Provide role-based training on policies and procedures Evaluate tools and evaluate future needs Resource Management Maturity Level Two – Project by Project or Basic In level two, resource management processes are in place and the necessary process discipline exists to repeat earlier successes on projects with similar applications. How to move from Level Two to Level Three: Measure adherence of enterprise policies and procedures Information is shared across projects with modern tools Enterprise wide labor categories and skills inventory/classifications Defined skill levels used for resource selection People, processes & tools provide an enterprise wide resource forecast Resources are budgeted and forecasted at the task level Supply and future supply of resources is visible Resource demand is visible to all project stakeholders Projects are being planned with resource constraints in mind Decide on a common set of enterprise wide and project level KPIs Automation of the process with the right tool Resource Management Maturity Level Three – Organization-Wide Processes are documented and standardized at level three, with approved tailored approaches being adopted as needed. How to move from Level Three to Level Four: Use data (historical and current) to drive hiring and placement decisions Common tool for enterprise level resource and skills budgeting and forecasting that all stakeholders have access to Formal resource requesting process Standard resource management metrics/KPIs with visibility of performance goals/thresholds Self-reporting on utilization Align resource forecasts and plans to corporate goals and objectives Realtime resourcing information – reports and dashboards Utilize KPIs to directly influence achievement of business goals and to make great business decisions Pipeline is also resourced for full look at the total needs of the business Tools now support the process with minimal manual touches Continue role-based training for all stakeholders Tools training is a recurring activity Resource Management Maturity Level Four – Quantitative/Data Driven At level four, detailed measures on process of resourcing practices are quantitatively measured, understood and managed. How to move from Level Four to Level Five: Invest in your people with training and a career path Establish a continuous feedback loop from all stakeholders Incentivize employees to be creative and listen to the suggestions Continue to evolve your processes looking for areas to improve Collect and utilize lessons learned and drive them into your process You will feel the organization firing on all cylinders Resource Management Maturity Level Five – Continuous Improvement At the final level of the resource management maturity level, continuous process improvement is enabled by quantitative feedback from the process and from piloting innovative ideas and technologies. “Sounds great, but do we have to be a Level Five?” As an organization, it is important to decide what level is needed to achieve your business objectives. You might not need to walk through all 5 steps to resource management maturity. Some may say that level 3.5 is adequate and it will meet their needs. Others might need a complete managed process that is striving for optimization, so a 4.3. Making that decision is key to establishing a roadmap and overall timeline. Benefits of Adopting a Resource Management Maturity Model: Improved visibility and control into enterprise resource needs and utilization Improved predictability and understanding of overall performance Common organizational standards ensuring consistent reporting, reduction of rework, and reduced dependence on heroes. Optimization of the project management staff, allowing them to focus on their customer, not on turning the crank. More efficient communication within project teams and to senior leadership. Delivery of real-time insight on project financials and enable resolution of identified risks. More on-time and on-budget projects, which equals a delighted customer. Mature Your Resource Management Process with Unanet Understanding that resource management is a true discipline that should be practiced and matured can be the difference between successful or failed projects. We all know what happens with failed projects and none of us want that. A resource management system can greatly aid your mission to improve your resource management maturity. An integrated comparison of actuals with budgets, plans, plans and variances gives project managers unparalleled insight into their projects. Dive deeper into how to improve your resource management maturity by watching our on-demand webinar.
What is the DCAA, and What Audits Do They Perform?
by Kim KosterGovCon, Government Compliance
Aug 08, 2019
What is the DCAA? Let’s quickly level set on the mission of the Defense Contract Audit Agency (DCAA). Their primary function is to perform contract and financial audits for agencies that are responsible for acquisition and contract administration for the US Government. DCAA audits ONLY government contractors. They conduct these audits in accordance with the Generally Accepted Government Auditing Standards (GAGAS). The principles that GAGAS embodies are unbiased audit conclusions based on facts. DCAA is a very vital part of the acquisition process for the Department of Defense (DOD) and certain other agencies. Their charter is to make sure that the taxpayers’ money is spent responsibly and ethically by conducting audits that ensure the validity of costs throughout the acquisition process. They have a tremendous amount of influence because they communicate with the Contracting Officer (CO) and make recommendations that have an impact on contract negotiations. The recommendations help the CO understand what the price of the contract should be. In the past, the relationship between the government contracting community and DCAA has been strained. DCAA is making a concerted effort to improve overall relationships with government contractors by improving communication and coordination. Common DCAA Audits Understanding the various audits the DCAA tends to run is necessary for preparing for them. In future blogs, we will dive deeper into each audit, but for now, here is a quick description of some of the most common ones: Incurred Cost: The most common type of DCAA audit, an incurred cost audit exists to ensure that claimed actual costs and billed costs reconcile. Forward Pricing: This audit is conducted on contract proposals, are related to a specific contract, and are conducted prior to award. The purpose of this audit is to ensure out year rates are reasonable and realistic for use in forward pricing. Pre-Award: Accounting System Audit: An Accounting System Audit is performed to ensure that a government contractor’s accounting system complies with laws and regulations, is reliable, there is a minimal risk of misallocations and mischarges, and allocations and charges are consistent with billing procedures. Timekeeping: This audit aims to ensure the contractor is compliant with its timekeeping practices, that the employee time records are correct, that employees perform in their assigned job classifications, and time is charged to the proper cost objective. Special Audits: Special audits may be performed for a variety of reasons, but typically occurs when a Contracting Officer needs an independent financial opinion on specific portions of a contract for a contractor’s accounting business system. Other Audits: These audits are usually performed for a variety of reasons, usually when there is potential for a high risk of misallocation or mischarging of costs. Ease the Path to Compliance with Unanet What is the DCAA? Something you don’t have to fear with the help of Unanet! Remember that there is no such thing as DCAA compliant software. It is your organization and procedures that will be assessed for compliance. That said, Unanet is uniquely designed for government contractors and has been battle-tested for compliance rules and regulations. Our compliance features are built into the tool, making compliance part of the fabric of your business. Unanet currently has over 2,000 clients using and trusting the system. Unanet supports compliant accumulation and allocation of costs utilizing time keeping, expense accounting, cost pools, indirect rates, revenue recognition, and project management all in one truly integrated system. Whether you are a small new or a seasoned larger GovCon, you can count on Unanet for your compliance needs. Unanet is recognized by the audit agencies as being “compliant ready,” giving you an immediate advantage in the audit process. To learn more about the DCAA, download our white paper, “A GovCon’s Essential Guide to DCAA Compliance.”
The Benefits of Digital Transformation for Government Contractors
by Kim KosterGovCon
Jul 02, 2019
Digital transformation appears to some as a just a buzzword. However, it’s fast becoming an essential business priority for the C-suite in all sizes of government contractors in the drive for sustainable competitive advantage. What is the significance of digital transformation for government contractors, and what outcomes are being reported? C-suite executives are finding enormous value in automating time-consuming and inefficient tasks by integrating project management, accounting, and finance. This eliminates time wasted in reconciling transactions between systems and thereby freeing up time and resources to focus on strategic priorities. This is the foundation for digital transformation. Small and mid-sized GovCons have reported the following startling improvements: We have been able to grow topline revenue by almost 40% without having to add $1 of G&A support” “We reduced our invoicing process from 20 to 7 days, we can complete all month close procedures in 5 –7 days and improved our DSOs from 60 to 50. Additionally, we grew top line revenue by 25% in one year with no additional accounting staff. “Since implementing Unanet, invoicing takes between five to ten days, a reduction of more than 20 days from before. While major clients are demanding credit terms to 60 days, DSOs are reduced in 2014 from 160 to 70 days.” “We reduced invoice processing time by 65%. All invoices are now delivered with 48 hours of period end.” “We eliminated all off-system accounting, shortening the time to ‘close the books’ by 60%” “Our profit margin improved by 4% since Unanet went live.” “We increased the revenue dollars processed per $1 of accounting department salary by more than 300%” Unanet Customers Share Their Experience with Digital Transformation for Government Contractors At the 2019 Unanet Champions Conference in San Diego, four GovCon Financial Executives shared their perspectives on how their businesses have been transformed with Unanet, driven by both quantitative and qualitative improvements: Mark Rothman, CFO, NETE Shilpa Amato, Executive VP, Nalas Engineering Services Thomas Batty, Corporate Staff Operations, Frontier Technology Lisa Martin, Contracts/Accounting, Trevet “What was life like before Unanet?” Mark: Information was not timely, it was hard to get the data out, and we needed technical experts to write custom reports. Shilpa: We had disparate systems; our accounting system couldn’t provide Project Managers with information on project cost and project health. Billing was a nightmare. We couldn’t do Cost Plus billing directly from the system and had to resort to complex workarounds in Excel. Thomas: Before Unanet, data was always behind the times. We needed multiple spreadsheets to track everything. To make it worse, we received very poor response/support from our legacy vendor (Deltek) who was always focused on upselling. It was a bad time and lasted 10 years! Lisa: We were using a legacy product (Deltek GCS) which was being sunset and we were not happy with the idea of Deltek and Costpoint as a future solution due to the poor service we experienced, and the complexity of Costpoint. With Deltek GCS we leaned heavily on Excel to fill the gaps in the reporting we needed. We also relied on custom reporting which required Impromptu expertise. The relevant project information in the financial system was not accessible to Project Managers. Unanet’s one system solved all our problems. And in Deltek GCS the ability to only have two periods open was a major limitation. “What was the most significant benefit of moving to Unanet?” Lisa: Simply a more up-to-date integrated system where we did not need to import and export data; a huge improvement was the accessibility of data to Project Managers and executives. Thomas: The real-time availability daily of labor information was a game-changer. Project Managers know their status and backlog now rather than in 45 days. With all the information in one place wasting time reconciling data is eliminated. Shilpa: I can get any answer to any question at any time in minutes. Accounting is happy, Project Managers are happy, leadership is happy. I love depth of standard reports. Billing is shortened from a week to a day. Mark: The real-time visibility for Project Managers without resorting to home-grown spreadsheets (which very likely had errors) is now critical to how we manage our business. We slice and dice data in different ways and in whatever periods are required; daily, weekly, semimonthly, quarterly etc. Immediate visibility of timesheet status helps with accuracy and efficiency too. Learn How Unanet Can Provide Digital Transformation for Government Contractors Unanet is now the clear market leader for small and medium-sized GovCons. Not just an alternative to Deltek, but as a clearly superior choice for organizations who want to transform their business. To schedule your personal consultation, contact us.
DCAA Compliant Software
by Kim KosterERP Software Best Practices, GovCon, Government Compliance
Jun 13, 2019
Just to be clear, there is no such thing as DCAA Compliant Software! It is your organization and procedures that will be assessed for compliance. That said, software such as Unanet, that is purpose-built for government contractors can significantly help you with achieving compliance. DCAA compliance requires that your accounting and related business processes which collectively including policies, manual procedures and tools be compliant. Software alone is not audited for DCAA compliance or certified, nor approved as DCAA compliant. However, Unanet software has been reviewed by DCAA auditors at more than one thousand customer sites and, along with the customer policies and procedures, approved as supporting DCAA requirements. Unanet software makes implementation of the DCAA regulations easy and efficient. Here is a small sampling of the DCAA regulations that a compliant accounting system must include and that are directly supported by Unanet accounting software: Proper segregation of direct and indirect costs Identification and accumulation of direct costs by contract Method for allocation of indirect costs A Timekeeping System that enforces specific requirements related to charging hours Labor distribution – how costs are allocated to charged time Segregation of unallowable costs Accumulation of costs under General Ledger Control To learn more, download A GovCon’s Essential Guide to DCAA Compliance.
What to Look for in a Billing and Invoicing Tool
by Kim KosterBudgeting & Forecasting, GovCon
Jun 06, 2019
As a professional services company, it is critical to be able to automate and shorten the bid-to-bill lifecycle. Professional services organizations need revenue recognition and billing to be completely in lock step. The concept of billing and invoicing does not need much explanation as we deal with bills continually in our daily lives. Billings/Invoices typically are a form that contain information like name, address, payment terms, a unique id, elements of cost, direct costs, and indirect costs applied. Choosing a billing and invoicing software can help you maintain accuracy and efficiency. But how do you find billing and invoicing software that will give your company all the features it needs for success? When looking for a tool, it is important to have… A time application that is a part of the project based ERP system so that billing can be done quickly Traceability of all transactions Ability to create multiple, standard invoice formats to be used across projects, showing summary or detailed level information Hide or show Cost Element detail on Cost Plus Invoices Include Fixed Price, Time & Materials, Pre-Bill Labor, and Additional Items on the same invoice Defer items from the current invoice for future invoicing Add one-time items such as additional fees or discounts The Benefits of Billing and Invoicing Software Once your organization finds the right system, you will enjoy the following benefits: Billable expense markup ensures company or project-specific markups can be applied. Manage different contract types including Time & Materials, Fixed Price, Pre-Bill Labor and Cost Plus. Estimate and record what is billable, billed and earned. Enable review of draft invoices by project management roles. Manage bid-to-bill lifecycle in Unanet, or feed data to other systems Feed other systems with accounts receivable, or journal transactions at summary or detail level. Flexible invoice formats per project to reflect client needs and level of detail. Streamline Your Billing and Invoicing Process with Unanet When searching for the perfect billing and invoicing software for your organization, Unanet is the clear choice. Our software can automate the “bid-to-bill” lifecycle, allowing your organization to forecast and track revenue across different contract types, and provide authorized managers with real-time insight. Our software promotes faster invoicing which in turn results in a faster closing of the books and reduced DSOs. By providing a single integrated system to manage the entire services bid-to-bill cycle, Unanet gives businesses the opportunity to replace their disparate standalone systems, resulting in greater productivity, fewer errors, lower costs, and less stress for your team.
Getting Ready for a DCAA Audit
by Kim KosterGovCon, Government Compliance
May 22, 2019
Let’s quickly level-set on the mission of the Defense Contract Audit Agency (DCAA). Their primary function is to perform contract and financial audits for agencies that are responsible for acquisition and contract administration for the US Government. DCAA audits ONLY government contractors. Each DCAA audit is conducted in accordance with the Generally Accepted Government Auditing Standards (GAGAS). The principles that GAGAS embodies are unbiased audit conclusions based on facts. DCAA is a very vital part of the acquisition process for the Department of Defense (DOD) and certain other agencies. Their charter is to make sure that the taxpayers’ money is spent responsibly and ethically, by conducting audits that ensure the validity of costs throughout the acquisition process. They have a tremendous amount of influence because they communicate with the Contracting Officer (CO) and make recommendations that have an impact on contract negotiations. The recommendations help the CO understand what the price of the contract should be. In the past the relationship between the government contracting community and DCAA has been strained. DCAA is making a concerted effort to improve overall relationships with government contractors by improving communication and coordination. DCAA Audits are a Fact of Life for Government Contractors During our most recent GAUGE Report, we noted the types of audits that were most prevalent. There are many audits that a GovCon can be subject to. Below are those results with the ICS being the largest audit by far. Tips to Prepare for a DCAA Audit 2019 GAUGE survey respondents said that their DCAA oversight is increasing, 6% more than last year. So, it is important to understand how you can best manage your compliance and audits. Here are a several tips you can use to help ensure a successful DCAA audit. Why Unanet for DCAA Audit Preparation? Unanet is purpose-built with the project or contract in mind. It is uniquely designed for government contractors and has been battle-tested for compliance rules and regulations. Our compliance features are built into the tool, making compliance part of the fabric of your business. Unanet currently has over 1,000 clients using and trusting the system. Unanet supports compliant accumulation and allocation of costs utilizing time keeping, expense accounting, cost pools, indirect rates, revenue recognition, and project management all in one truly integrated system. Whether you are a small new or a seasoned larger GovCon, you can count on Unanet for your compliance needs. Unanet is recognized by the audit agencies as being “compliant ready,” giving you an immediate advantage in the audit process. Click here to learn more.
Understanding The DCAA Accounting System Audit
by Kim KosterAccounting, GovCon, Government Compliance
May 15, 2019
The topic of this blog is the post award accounting system audit. The post award accounting system audit is an examination of the accounting system at non-major contractors after contract award. The objective of the post award accounting system audit is to determine if the contractor’s accounting system complies with the DFARS 252.242-7006, Accounting System Administration, requirements. A post award accounting system audit is usually performed at the request of the contracting officer when: a follow-up audit to a preaward survey (SF1408) is recommended or a preaward survey was not conducted prior to contract award, and the contracting officer determines that an audit is now required to support contract requirements. What are the characteristics of an acceptable accounting system? Acceptable accounting system means a system that complies with the system criteria below to provide reasonable assurance that: Applicable laws and regulations are complied with; The accounting system and cost data are reliable; Risk of misallocations and mischarges are minimized; and Contract allocations and charges are consistent with billing procedures. What is DCAA Looking for in the Accounting System Audit? This list of criteria below is very similar to the SF1408 Preaward Survey. A sound internal control environment, accounting framework, and organizational structure Segregation of direct and indirect costs Identification and accumulation of direct costs by contract Consistent allocation method for of indirect costs to intermediate and final cost objectives Accumulation of cost under the general ledger control Reconciliation of subsidiary cost ledgers and cost objectives to general ledger Approval and documentation of adjusting entries Management reviews or internal audits of the system to ensure compliance with the Contractor’s established policies, procedures, and accounting practices A time keeping system that identifies employee’s labor by intermediate or final cost objectives A labor distribution system that charges direct and indirect labor to the final cost objectives Interim determination of costs charged to a contract through routine posting of books of account Exclusion from costs charged to the government contracts of amounts that are not allowable per FAR 31, Contract Cost Principals and Procedures, or other contract provisions Identification of cost by contract line item (CLIN) and by units if required by the proposed contract Segregation of preproduction costs from production costs Billings that can be reconciled to the cost accounts for both current and cumulative amounts claimed and comply with contract terms Cost accounting information, as required: By contract clauses concerning limitation of cost (FAR 52.232-20), limitation of funds (FAR 52.232-22), or allowable cost and payment (FAR 52.216-7); and To readily calculate indirect cost rates from the books of accounts; Adequate, reliable data for use in pricing follow-on acquisitions Accounting practices in accordance with standards promulgated by the Cost Accounting Standards Board, if applicable, otherwise, Generally Accepted Accounting Principles. A common question is what are some of the typical pitfalls contractors have when completing this audit. Our answer is that all of requirements are important and non-compliance could leave you with a non-adequate system. If the Contracting Officer makes a final determination to disapprove the Contractor’s accounting system, and the contract includes the clause at 252.242-7005, Contractor Business Systems, the Contracting Officer will withhold payments in accordance with that clause. No one wants to not get paid!! A tried and trusted tool like Unanet can help you meet the requirements above. If you are not comfortable with taking this on yourself please do reach out to Unanet as we have a partner network that can assist you every step of the way. It will be worth every penny you spend. Good luck on your audit and hope that there are many contract awards coming your way. For more information, download A GovCon’s Essential Guide to DCAA Compliance.
Alternatives to Deltek – What to Look For
by Kim KosterGovCon, Professional Services
May 13, 2019
Two words. Caveat Emptor (Buyer Beware). You’re in the market for a system that will support your entire business lifecycle. You need a robust system that can handle your financials, accounting, budgeting & planning, timesheets, expenses, project management, resource management, real-time reporting and more—all in one place. So, it’s time to research the market and find the best business software at the best value. Simple, right? Well, yes and no. Proceed with caution, ask the right questions, and you can figure out which system is the best fit for your business. Here are some questions to ask as you evaluate the myriad options for business software: 1. Are all of the products on one database? Unfortunately, many of the business software systems on the market are essentially a conglomerate of smaller products that have been acquired over the years, patched up to look similar, but running on different databases (this is the case with Deltek). This means that you are really dealing with multiple products, each with a different schema, different technology stack, and different security model. These disparate products interface through a system of importing and exporting, each time introducing an opportunity for error. What you want here is one unified application – one user interface, one database, one security model. Anything else is just a mess of leftovers served up in a single bucket. 2. Are project and resource dashboards, KPIs, and analytics reported in “Real-Time”? Another consequence of using business software that is a conglomeration of smaller products is that users will need to learn multiple products and go to multiple places to get the information they need. Because data is stored in numerous places and requires transfer and synchronization, their information is not truly “real-time”. With Deltek’s disparate systems, data needs to be combined to produce reports, and reports will show different output in different systems. Unanet, however, provides managers and project managers with real-time, “live” reports – instead of having to wait for weeks or even months to receive a report from an accounting system. 3. How can I ensure that only authorized employees have access to sensitive information? You will need to make sure your business software includes roles-based access for all members of the company. Unanet ensures security of information by providing real-time access to management without having to give them access to the backend financial system. 4. Is the software made in U.S.A.? Many companies save money by outsourcing the design and development of their software to offshore developers. Unanet is 100% designed and developed in the United States. 5. Will I have the customer support I need and want? Ah, the controversial question of where to base customer support. Again, it is cheaper to outsource customer support overseas, but this frequently results in customers complaining about high turnover, that they never talk to the same person twice, the rep can never answer questions, etc. Don’t get me wrong, it can be done well, but that’s rarely the case. Unanet believes that customer satisfaction and responsiveness are the highest priorities, and we have the customer feedback to prove it. We have an experienced, US-based team of dedicated, knowledgeable, responsive, and just plain nice people who will make sure you get an answer to your question and will support you through every step of implementation. As a self-funded company, we don’t answer to private equity or venture capital firms, so we are not forced to outsource our customer service. After all, a system that meets your desired outcomes is more than just technology. You need expert assistance in order to accomplish true business transformation. 6. What is the total cost of ownership? Yep, the million dollar question (well, let’s hope not – that’s a lot to pay for business software!). Ultimately, many decisions about purchasing new software for your business will come down to price. What do you get for your money? Be sure to compare not only the functionality of the software systems, but also the implementation costs, consulting costs, subscription/license fees, and, of course, the human resources you need to operate the software. Unanet’s intuitive, easy to use, easy to operate interface enables our customers’ finance teams to focus on transforming the business rather than running monotonous transactions. We feel confident that you will discover that Unanet offers the best “bang for your buck” when it comes to selecting high-value, low total cost of ownership software to manage your projects, people, and financials. Still struggling over your ERP software decision? Learn why One-Third of Unanet’s Customers Made the Switch From a Competitor.
What Makes a Project Based ERP System Special?
by Kim KosterERP Software Best Practices, GovCon
Mar 20, 2019
Every project based business requires projects to keep it running smoothly and growing, so why not choose an ERP system that is built to manage them? A project based ERP system can help a business streamline and automate its project management process to avoid delayed projects, a lack of skilled employees, and unbilled hours. In short, project based ERPs are designed to promote project success and company growth. But what about generic ERP systems? While they have a few benefits, there are a few key differences between generic and project based ERPs. Generic vs Project Based ERP Systems Generic ERPs are still prevalent in the marketplace today, but they are costly and very difficult to maintain if your business is projects. These ERPs typically do not have the project as the center of the universe. Generic ERPs focus on the account and the department/organization, and the project is accounted for with a separate tool. In a generic world, the project is an afterthought. Why Project Based ERP Systems? In a recent blog, we discussed what to look for when choosing project-based ERP software. But why are project based ERP systems the clear choice for project based organizations? We explore 8 main reasons below: Transactions are attached to a project, department/organization, and a general ledger account. This ensures that transactions do not get lost in the midst of a project and prevents team members from tracking them down while running expense reports. A time collection system attaches charges directly to the tasks that the individual works on. This makes tracking billable hours much easier and more intuitive. Costing architecture is tailorable for each project and task. No two projects are alike, so why should there be a single costing architecture? Costs are often outlined in a Work Breakdown Structure (WBS), which project managers and standard employees alike use to monitor the progression of the project. Visibility is provided into the financials of each project (i.e. profit, cost, billing). This visibility and transparency is crucial for all team members be aware of what the project is costing and make adjustments if needed. A resourcing tool provides project managers with information on what skills are available at what time. This prevents surprises and winding up with a lack of skilled employees to handle a project. Complete financial reporting with the project in mind. Financial reporting of a project plays a large role in the project being an efficient success or dragging on for months. Project based key performance indicators to help drive the organizational and project goals. System controls that send notifications when project restraints are met, configured to the needs of your business To Best Manage Your Organization’s Projects, Trust Unanet’s Project Based ERP System Project based companies require project based ERP systems. It’s as simple as that. Unanet’s project management software allows you to align projects to corporate strategy, lower project management costs, gain key real-time project insights, and much more. Learn how you can unlock greater productivity, operational efficiency, and profitability with project clarity and control, download our ebook, The Business of Projects for dummies.
What to Look for When Choosing Project Based ERP Software
by Kim KosterERP Software Best Practices, GovCon
Mar 11, 2019
If you are considering using ERP software for your business or are not satisfied with your current one and are looking elsewhere, understand that not all ERP systems are created equally. As we think about what makes great ERP software, we should consider the project lifecycle and the process of project management. The ERP should have all the elements of the project lifecycle as a basic part of the system. Below are only a few of the elements your ERP system must have in order to be a good fit for your business: Customer Relationship Management Customer Relationship Management (CRM) is a discipline that manages your company’s interaction with current and potential customers. CRM has become a priority to improve overall relationships with customers, specifically to focus on customer retention (stickiness) and to drive sales growth. Opportunity Management An opportunity pipeline for a project-based business is the visualization and/or measurement of contracts or projects that you will attempt to win over time. Visibility into the pipeline gives vital information on needed resources, enterprise growth, profitability, and revenue trajectory. Resource Management Project stakeholders can visually see the availability, skills, utilization, and time phasing of the resources. Resource management’s level of visibility and control will help maximize overall performance and profitability. Budgeting A budget represents what the business believes is achievable and what it intends to accomplish. The project establishes a budget that becomes the baseline for performance management. Visibility into budget vs. actuals is important project manager information. Forecasting Throughout the execution of the project plans may change, the resources may change too, and it is the responsibility of the project manager to revise the work to best accomplish the end goal. How much is it going to cost and when will the project finish? The forecast will answer that question. Earned Value Earned Value Management (EVM) is a project management best practice that flows directly with your established PM policies. The basics of EVM are plan, execute, assess performance, and monitor the project. Project managers can assess completion of the work at the task level and by doing this will get a host of metrics on current and future performance. Revenue Recognition Revenue is the amount of income the organization is making. It is one of the most important metrics/KPIs that a business/project monitors. Project Managers are responsible for achieving revenue goals, so having the ability to track revenue real-time is a huge benefit. Time and Expense Time collection systems are used by every employee in the organization. They collect hours for tracking project effort, and are supporting systems for payroll, invoicing, project accounting, chargeback, and job cost accounting. Expense systems track employee expenses to a project. Integration of time and expense directly to the project keeps project managers up-to-date on resources and current costs. Billing As engineering companies, it is critical to be able to automate and shorten the bid-to-bill lifecycle. Engineering organizations need revenue recognition and billing to be completely in lock step. The concept of billing and invoicing does not need much explanation as we deal with bills continually in our daily lives. Billings/Invoices typically are a form that contains information like name, address, payment terms, a unique id, elements of cost, direct costs, and indirect costs applied. Real Time KPIs and Reporting Real-time information is key to managing the day-to-day operations. Project team members need information throughout the life of the project. For instance, project status reports, EVM, time and expense, financial, and resource reports are a must. Dashboards are eye candy for all levels within the organization. They are a real-time visual representation of the role-based business information needed to manage the business. PMs should be able to quickly see with colors and graphs where they are against plan. Key Performance Indices (KPIs) provide actionable insights to help execute projects. Your Search is Over! Choose Unanet’s Projct Based ERP Software When it comes to an ERP system, your business needs a streamlined, efficient solution that helps you manage resources, staff, projects, and more to keep you organized, on schedule, and under budget. Unanet is here to help. To learn more about the moving parts of ERP software, download our ebook, Selecting an ERP for Professional Services, or our white paper, “Have You Outgrown Your Existing ERP?“
What is SF1408?
by Kim KosterGovCon, Government Compliance
Feb 21, 2019
Just in case you are completely new to Government Contracting, let’s quickly level set on the mission of the Defense Contract Audit Agency (DCAA). Their primary function is to perform contract and financial audits for agencies that are responsible for acquisition and contract administration for the US Government. DCAA audits ONLY government contractors like you. They conduct these audits in accordance with the Generally Accepted Government Auditing Standards (GAGAS). The principles that GAGAS embodies are unbiased audit conclusions based on facts. If you are interested there is a ton of information on the DCAA website dcaa.mil to help you more thoroughly prep for impending audits. With all that said, let’s focus in on the topic of this blog, which is the Pre-Award Accounting System Survey (SF1408). The Accounting System Survey is considered “pre-award audit” and it is necessary for the award of any Cost Type contract. Below is an excerpt from the DCAA Letters to Congress about Pre-Award Audits: Pre-Award Audits. Pre-award audits determine whether the design of a contractor’s accounting system is acceptable, which is a necessary condition for awarding cost type contracts. To better meet the needs of buying commands, DCAA prioritized these audits and developed tools to assist both contractors and auditors. As a result, DCAA has reduced the number of days to complete pre-award audits going from approximately 120 days in FY 2012 to about 60 days in FY 2016. Those measures, combined with effective communication between audit staff, contracting officers, and contractors, has allowed us to more quickly identify system deficiencies, provide workable solutions, and reduce the time between solicitation to award. Additionally, a part of our outreach to small businesses focuses on the necessary components of an acceptable accounting system, which we feel also contributed to this success. The “Pre-Award Survey (SF1408)” is conducted prior to award and is contract specific. It results in an opinion that the system is “acceptable” for use on the contemplated contract. It should be noted that this is NOT a true audit because it does not look at any actual costs – only the system capabilities. It is referred to as a “Survey” in the document and it is considered a “review” in auditor terminology. It can, and often is, done on a system that is not yet implemented based on the software capabilities and pro forma company policies and procedures. The Survey is a Pre-Award Survey known as Standard Form (SF) 1408 which is asking questions about your accounting system. Below are some of the inquiries of the form: Is the accounting system in accordance the GAAP? Accounting System provides for: Proper segregation of direct and indirect costs Identification and accumulation of direct costs by contract Method for allocation of indirect costs Timekeeping System Labor distribution Segregation of unallowable costs Accumulation of costs under General Ledger Control Accounting System provides financial information Required by contract clauses concerning limitation of cost (FAR 52.232-20 and 21) or limitation of payments (FAR 52.216-16) Required to support requests for progress payments Is the accounting designed to have reliable and accurate data? Is the accounting system fully operable? This overall process can be tricky for new government contractors and it is highly suggested that you have the right processes and tools in place to assure success. If you are not comfortable with taking this on yourself please do call Unanet, as we have a partner network that can assist you every step of the way. This is a great example of investing upfront to ensure the success of your project. It will be worth every penny you spend. For more information, download the SF1408 Overview.
Project Management Maturity
by Kim KosterGovCon, Project Management
Feb 19, 2019
Achieving a strategic level of project management maturity should be on the mind of every project-based business, especially professional services firms. Proposals, budgets, resources, estimate-at-complete (EAC) are activities a project-based business can’t live without. In a perfect world, the project management activities will connect directly to time and financial systems. The integrated system (people, processes, and tools) will provide a level of visibility and control that will help mature your discipline and will improve execution success. Project Management Maturity = Project Success and Predictability Evolving the Project Management Discipline Since project management depends on the strategic alignment of people, processes and tools it only makes sense to concentrate on the level of competency of each of these attributes throughout your capability evolution. Professional services organizations are all on different journeys as it pertains to capability evolution. Which one of the below levels accurately depicts your current maturity status? Level 1 – AD-HOC Achieving goals depend on individual effort and heroics. This is typically chaos and you might picture this state as people running around with their hair on fire. Level 2 – BASIC INFORMATION Basic project management processes are in place and the necessary process discipline exists to repeat earlier successes on projects with similar applications. Level 3 – ORGANIZATIONAL STANDARDS Processes are documented and standardized, with approved tailored approaches adopted as needed. Level 4 – QUANTITATIVE Detailed measures on process adherence and cost/schedule performance are quantitatively measured, understood and managed. Level 5 – CONTINUOUS IMPROVEMENT Continuous process improvement is enabled by quantitative feedback from the process and from piloting innovative ideas and technologies. By committing to mature your project management discipline you will realize the following benefits: Improved visibility and control into project performance Improved predictability and understanding of overall performance Increase in realized profitability Common organizational standards ensuring consistent reporting, reduction of rework, and reduced dependence on heroes. Optimization of the project management staff allowing them to focus on their customer, not on turning the crank. More efficient communication within project teams and to senior leadership. Delivery of real-time insight on project financials and enable resolution of identified risks. More on-time and on-budget projects, which equals a delighted customer. What is PPM? Today we hear so much about PPM, but what exactly is it and how many organizations are really doing it effectively? What makes implementation of this discipline so difficult? The root cause is disparate systems and lack of process standardization make reporting and managing projects and portfolios very challenging. So, what is PPM? Wikipedia does a great job on the definition: “PPM is the centralized management of the processes, methods, and technologies used by project managers and project management offices (PMOs) to analyze and collectively manage current or proposed projects based on numerous key characteristics. The objectives of PPM are to determine the optimal resource mix for delivery and to schedule activities to best achieve an organization’s operational and financial goals, while honoring constraints imposed by customers, strategic objectives, or external real-world factors.” Portfolios are groupings of projects that have common characteristics (example: customer, product line, etc.). The portfolio will not change, but the underlying projects and proposals will continue to change and evolve. The art of PPM is to plan resources, analyze data and resultant KPIs, and understand each project’s status all in one ecosystem (people, process, and tools). 6 Steps to Implement PPM: Get buy-in from all stakeholders: executives, functional leaders, portfolio managers, project managers all need to agree or at least understand the vision and the reason for PPM. Build a team with champions. Make sure you pick a team with the necessary expertise and if you don’t have the necessary expertise, consider hiring an outside firm. If you have a centralized project management office (PMO), they can be a huge help in providing expertise and direction for the PPM implementation team. Begin collecting project and program data in a central repository. An integrated project portfolio management tool will make a significant difference in the availability and accuracy of the data used for decision making. Common processes for all projects for the organization is a MUST. Processes must be current and realistic, and teams need role-based training. Projects all have nuances, so it is important to have tailorable processes to accommodate project size and type. The implementation team should lead this charge along with the PMO. Establish portfolios (in accordance with strategy) and align the projects to them. Assign portfolio managers and assure portfolio reporting is available. Common KPIs should be established with visual dashboards for the portfolio management team. Roll-out the discipline of PPM. Advertise to the organization and provide role-based training for all stakeholders throughout the organization. Benefits of PPM: Common communication of business information produced from sound processes, assuring decisions are made based on accurate information that aligns with corporate goals Ability to manage the opportunity pipeline of all projects that can be rolled up to program and portfolio What-iffing and modeling aids decision making by allowing you to establish the best path for the business. Revenue, cash, project, new orders, and growth are a few financial metrics that support strategy Enterprise planning of resources assuring right resources, right time, and right place Analyze KPIs at all levels of the organization and communicate to the enterprise Portfolio reporting and drill down so that the status of all projects can be analyzed as a part of the overall portfolio Visibility into all the projects in a portfolio making sure that all projects are performing to expectations Common governance of projects and programs allowing for a repeatable and tailorable process for all project sizes and types. Unanet Can Help You Get Started with PPM What better way to achieving project management maturity than with project management software supporting your projects? Unanet’s Project Portfolio and Project Portfolio Financials software offer one single source of truth for every aspect of your projects: expense reporting, budgeting and forecasting, time reporting, pipeline management, and more. We’ve helped over 2,000 customers transform their project management processes. See Unanet in action by contacting our sales team. Download our white paper, “Benefits of Maturing Your Project Management Discipline” to learn more.
DCAA Timekeeping Requirements and Timesheet Software
by Kim KosterGovCon, Government Compliance
Feb 04, 2019
Unanet has timesheet features and functions that directly support the DCAA timekeeping requirements stated in the Automated Timekeeping Systems section of the Defense Contract Audit Agency (DCAA) regulations and Federal Acquisition Regulations (FAR). Note that DCAA requires that the timekeeping process, collectively including policies, manual procedures and tools be compliant; timesheet software alone is not audited for compliance or certified, nor approved as DCAA compliant. However, Unanet timesheet software has been reviewed by auditors at hundreds of customer sites and, along with the customer policies and procedures, approved as supporting DCAA timekeeping requirements. Unanet timesheet software makes implementation of the DCAA regulations easy and efficient. Here is a small sampling of the DCAA regulations supported by Unanet: Employees charge time to authorized, open projects An employee access their timesheet through a secure password Employee records are viewable and there are auditable comments for any timesheet change Supervisors approve the entire timesheet All time must be reported (total time accounting) Administrators monitor delinquent timesheets Learn more about how Unanet timesheet software can help support DCAA timekeeping requirements! For information on controls checked during a DCAA audit please refer to publication 7641.90 titled, “Information for Contractors,” or contact the Defense Contract Audit Agency at the address below: Defense Contract Audit Agency ATTN: Policy Auditing Standards Division (PAS) 8725 John J. Kingman Rd., Suite 2135 Fort Belvoir, VA 22060-6219 (703) 767-3234 (FAX)