Slide1 l.jpg
Sponsored Links
This presentation is the property of its rightful owner.
1 / 28

Breakout Session # 1906 Doyle McBride, Director of Contracts, Qualis Corporation Date April 24, 2007 Time3:20 – 4:20 PowerPoint PPT Presentation


  • 68 Views
  • Uploaded on
  • Presentation posted in: General

How Large is Small?. Breakout Session # 1906 Doyle McBride, Director of Contracts, Qualis Corporation Date April 24, 2007 Time3:20 – 4:20. How Large is Small?. It depends…. How Large is Small?. It depends…on your perspective. Three Perspectives. Eligibility size Regulatory size

Download Presentation

Breakout Session # 1906 Doyle McBride, Director of Contracts, Qualis Corporation Date April 24, 2007 Time3:20 – 4:20

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


How Large is Small?

Breakout Session # 1906

Doyle McBride, Director of Contracts, Qualis Corporation

Date April 24, 2007

Time3:20 – 4:20


How Large is Small?

  • It depends…


How Large is Small?

  • It depends…on your perspective


Three Perspectives

  • Eligibility size

  • Regulatory size

  • Organizational size


Three Perspectives

  • Eligibility size

  • Regulatory size

  • Organizational size


Eligibility Size Standards

  • Based on NAICS Codes http://www.sba.gov/services/contractingopportunities/sizestandardstopics/tableofsize/index.html

    • Replaced SIC codes in 1997 (NAFTA)

    • Based on annual receipts or number of employees (ref. FAR 19.100, 13 CFR Part 121)

    • Tied to procurement, not company

    • Contracting Officer decides, but can be appealed (ref. FAR 19.303)


Eligibility Size Standards

  • Self-Certification

    • Government must notify offerors of apparent winner per FAR 15.503(a)(2)

    • Size can be protested IAW FAR 19.302

    • Affiliation and Ostensible Subcontractor Rule often cause for protest


Eligibility Size Standards

  • Contract Performance

    • FAR 52.219-14 defines requirements

      • Services: at least 50% cost of personnel

      • Supplies: at least 50% cost of manufacturing

      • General construction: at least 15% cost of contract

      • Construction by special trade contractors: at least 25% cost of contract

    • 13 CFR Part 125.6 provides details

    • Compliance evaluated by CO and/or SBA

    • Compliance period generally period evaluated in proposal


Eligibility Size Standards

  • Re-certification Rule Changes

    • New rules effective 6/30/07 (FR 11/15/06)

    • Before the 6th year of contract and before each option year thereafter

    • At the time of merger, novation, or acquisition

    • KO’s can request re-certification per task order

    • Must re-certify in original NAICS code, size standard as of date of re-certification


Three Perspectives

  • Eligibility size

  • Regulatory size

  • Organizational size


Regulatory Size Considerations

  • Federal Labor Laws www.shrm.org/hrresoures/basic_published/CMS_002787.asp

    • 1 to 14 employees

      • Fair Labor Standards Act of 1938

      • Federal Insurance Contributions Act of 1935

      • Sarbanes-Oxley Act of 2002

      • Plus fifteen other laws

    • 11 to 14 employees, add

      • OSHA Recordkeeping


Regulatory Size Considerations

  • Federal Labor Laws (continued) www.shrm.org/hrresoures/basic_published/CMS_002787.asp

    • 15 to 19 employees, add

      • Americans with Disabilities Act of 1990

      • Title VII of the Civil Rights Act of 1964

    • 20 to 49 employees, add

      • Age Discrimination in Employment Act of 1967

      • Consolidated Omnibus Benefits Reconciliation Act of 1986 Americans with Disabilities Act of 1990

    • 50 or more, add

      • Family and Medical Leave Act of 1993

      • EEO-1 Report filed annually (federal contractor)


Regulatory Size Considerations

  • Federal Labor Laws (continued) www.shrm.org/hrresoures/basic_published/CMS_002787.asp

    • 100 or more employees, add

      • Worker Adjustment and Retraining Notification Act of 1988

      • EEO-1 Report file annually (if not federal contractor)

    • Federal Contractors, add

      • Davis Bacon Act of 1931

      • Walsh-Healy Act of 1936

      • Service Contract Act (1965) FAR 52.222-41

      • Plus six others


Regulatory Size Considerations

  • RFP Requirements

    • Describe accounting, compensation, and estimating systems

    • Provide detailed pricing of labor, overhead, G&A, other direct costs

    • Expect DCAA audit of your proposal


Regulatory Size Considerations

  • Contract Post-Award Requirements

    • DCAA Post Award Audit

      • Financial Capability

      • Accounting System (for direct invoicing)

    • Allowable Cost and Payment, FAR Clause 52.216-7

      • Reimbursable Allowable Costs (FAR Part 31, DCAA Contract Audit Manual)

      • Annual Incurred Cost Proposals

      • Provisional Billing Rates

      • Contract Closeout


Regulatory Size Considerations

  • Forward Pricing Rate Agreements

    • Described in FAR Part 42.1701

    • Initiated by CO, Contractor, or ACO (but)

    • Negotiated only with contractors with “significant” volume of proposals

    • Applicable to all of contractor’s proposal activity

    • DCMA Guidebook (guidebook.dcma.mil) describes ACO process


Regulatory Size Considerations

  • DCAA Systems Reviews

    • Listed in DCAA CAM Part 5-102 (www.dcaa.mil under “publications”)

      • Control Environment and Overall Accounting Controls

      • General IT System

      • Budget and Planning System

      • Purchasing System

      • Material System

      • Compensation System

      • Labor System

      • Indirect and ODC System

      • Billing System

      • Estimating System


Regulatory Size Considerations

  • DCAA Systems Reviews (continued)

    • Dollar Thresholds in DCAA CAM Part 5-111.1

      • Based on “Auditable Dollar Volume”

      • Over $90M (major) requires comprehensive review

      • Between $15M and $90M (nonmajor) less comprehensive

      • Less than $15M may use narrative format

      • However, auditor can perform comprehensive review in any area determined to be high risk for any ADV level


Regulatory Size Considerations

  • Contractor Purchasing System Review (CPSR)

    • Requirements defined in FAR 44.3

      • Basis for ACO to grant approval

      • If contractor sales (excluding FFP, FFP-EPA, commercial) expected to exceed $25M in next 12 months

      • Every 3 years, ACO determines if review necessary

      • Surveillance level determined by ACO

      • Withdrawal of approval is not a good thing


Regulatory Size Considerations

  • CPSR (continued)

    • Thorough review conducted by special DCMA team

      • Comprehensive purchasing procedures should be in place

      • Will review for management oversight, proper requisition, source development, competition, price analysis, etc.

      • First time pass rate not very high

    • FAR Clause 52.244-2 (Subcontracts) defines contractor’s purchasing requirements

      • No consent required if system is approved

      • If not approved, consent required for certain types of subcontracts

      • If subcontract evaluated with competitive prime proposal, no consent required.


Regulatory Size Considerations

  • Cost Accounting Standards (CAS) Applicability

    • Described in FAR Appendix

    • Exemptions

      • Sealed bid contracts

      • Negotiated contracts & subcontracts not over $500K

      • Contracts & subcontracts with small businesses

      • Contracts & subcontracts with foreign governments

      • Contracts & subcontracts in which price set by law

      • FFP & FP w/EPA contracts & subcontracts for commercial items

      • Contracts or subcontracts of < $7.5M provided no current CAS-covered contracts $7.5M or greater (“trigger” contract)

      • Four others


Regulatory Size Considerations

  • Types of CAS Coverage

    • Full Coverage

      • If received a single CAS-covered contract award of $50M or more; or

      • Received $50M or more in net CAS-covered awards during preceding cost accounting period

      • CASB Disclosure Statement required

    • Modified Coverage

      • Can be triggered by $7.5M CAS-covered contract

      • Only CAS standards 401, 402, 405, 406 apply


Three Perspectives

  • Eligibility size

  • Regulatory size

  • Organizational size


Organizational Size ConsiderationsSource of ranges: www.beasonnalley.com

  • 0 – 50 Employees or $0 - $5M Revenue

    • G&A budget limited and based on new contract revenue base

    • May need to outsource accounting, human resource consulting, contract administration assistance, cost proposal preparation, and DCAA representation

  • 50 – 200 Employees or $5 - $20M Revenue

    • Company principals need to build support infrastructure by hiring key people (accounting, contracts, human resources, e.g.)

    • Consider implementing comprehensive project accounting system

    • Implement comprehensive procedures for accounting, purchasing, compensation, estimating


Organizational Size ConsiderationsSource of ranges: www.beasonnalley.com

  • 200 – 500 Employees or $20M - $50M Revenue

    • Consider hiring executive management staff (CFO, COO)

    • Consider upgrade of project accounting system to accommodate more complex contracts

    • Evaluate processes and procedures for compliance with Government audit standards

  • 500+ Employees or $50M+ Revenue

    • Takes steps to ensure compliance with CAS requirements, disclosure statements

    • Implement strategies for transition to large company through merger, acquisition, etc.


Organizational Size Considerations

“Dress for the job you want, not the job you have.”

“It’s better to be a large small company than a small large company.”


So How Large is Small?

It depends on who’s asking and why.


  • Login