Defense and Homeland  Security Consortium The Basics Beverly Arviso, CPA, CPCM, CFCM Founder, Arviso, Inc. [email_address]...
Defense and Homeland  Security Consortium Course Objectives  <ul><li>The Basics </li></ul><ul><li>Contract Administration ...
<ul><li>Taxpayer ID Number </li></ul><ul><ul><li>IRS – 1-800-829-1040 </li></ul></ul><ul><li>Dunn & Bradstreet Number </li...
<ul><li>Federal Acquisition System </li></ul><ul><ul><li>Federal Acquisition Regulation (FAR) </li></ul></ul><ul><ul><ul><...
<ul><li>Who acts for the Government? </li></ul><ul><ul><li>Contract Specialist </li></ul></ul><ul><ul><li>Contracting Offi...
<ul><li>Most contract types are classified by how they are priced </li></ul><ul><li>The objective to be achieved when nego...
<ul><li>Impact of Contract Types </li></ul><ul><ul><li>The amount of government financial review and surveillance is deter...
<ul><li>Contract Types </li></ul><ul><ul><li>Firm Fixed Price (FFP) </li></ul></ul><ul><ul><li>Time-and-Materials (T&M) </...
<ul><li>RFP Process </li></ul><ul><ul><li>Identification of a need </li></ul></ul><ul><ul><ul><li>Site Surveys </li></ul><...
<ul><li>Read the solicitation (and read it again and again) </li></ul><ul><ul><li>Determine Contract Type </li></ul></ul><...
<ul><li>What is the difference between cost and pricing? </li></ul>
<ul><li>The government is able to determine the price to be fair and reasonable without evaluating the separate cost eleme...
<ul><li>Price Analysis Techniques </li></ul><ul><ul><li>Competitive price proposals </li></ul></ul><ul><ul><li>Comparison ...
<ul><li>Analyzing the various cost elements that make up the price, e.g., labor, materials, overhead, and profit, in order...
<ul><li>Actual direct labor rates </li></ul><ul><li>Labor category rates </li></ul><ul><li>Blended rates (covers several c...
<ul><li>Define direct costs </li></ul><ul><li>Define indirect costs </li></ul><ul><ul><li>Costs that can’t be directly ass...
<ul><li>Indirect Rates </li></ul><ul><ul><li>vary from company to company </li></ul></ul><ul><ul><li>are valid for the cou...
<ul><li>Negotiations </li></ul><ul><ul><li>Pre and post negotiation memorandums (PNMs), FAR 15.406-3 </li></ul></ul><ul><u...
<ul><li>Contract Award Meeting </li></ul><ul><ul><li>Can vary by size and complexity of procurement </li></ul></ul><ul><ul...
<ul><li>Contract Award Meeting </li></ul><ul><ul><li>Preparation and Review of a Contract Brief </li></ul></ul><ul><ul><ul...
<ul><li>File Documentation </li></ul><ul><ul><li>RFP </li></ul></ul><ul><ul><li>Proposals (All Volumes) </li></ul></ul><ul...
<ul><li>Changes </li></ul><ul><ul><li>Inside or outside the scope of work </li></ul></ul><ul><li>Work at Risk </li></ul><u...
<ul><li>Infrastructure Needed </li></ul><ul><ul><li>Accounting System Polices and Procedures </li></ul></ul><ul><ul><ul><l...
<ul><li>Segregation of Costs (FAR Part 31) </li></ul><ul><ul><li>System must be able to track costs and allocate to projec...
<ul><li>Billing and Collections Procedures and Controls </li></ul><ul><ul><li>Contract Review/Preparation of Contract Brie...
<ul><li>Manual or electronic </li></ul><ul><li>Record all hours worked </li></ul><ul><li>Time should be entered daily, in ...
<ul><li>FAR Part 31.205-46 </li></ul><ul><li>Expense Reports </li></ul><ul><ul><li>Each employee must complete an expense ...
<ul><li>Requestor Submits a Purchase Request  </li></ul><ul><li>Purchasing Issues the Purchase Orders (POs) </li></ul><ul>...
<ul><li>Defense Contract Audit Agency (DCAA) </li></ul><ul><ul><li>Types of Audits </li></ul></ul><ul><ul><ul><li>Accounti...
<ul><li>Beverly Arviso, CPA, CPCM, CFCM </li></ul><ul><li>Founder, Arviso, Inc. </li></ul><ul><li>[email_address] </li></u...
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  • Need D&amp;B before you can be registered in the CCR or ORCA If US company the cage code will be assigned to you once registered in the CCR
  • The Basics - Arviso

    1. 1. Defense and Homeland Security Consortium The Basics Beverly Arviso, CPA, CPCM, CFCM Founder, Arviso, Inc. [email_address] 757-373-9536
    2. 2. Defense and Homeland Security Consortium Course Objectives <ul><li>The Basics </li></ul><ul><li>Contract Administration </li></ul><ul><li>Contract Accounting </li></ul><ul><li>Questions and Answers </li></ul>
    3. 3. <ul><li>Taxpayer ID Number </li></ul><ul><ul><li>IRS – 1-800-829-1040 </li></ul></ul><ul><li>Dunn & Bradstreet Number </li></ul><ul><ul><li>1-800-333-0505 </li></ul></ul><ul><ul><li>www.dnb.com </li></ul></ul><ul><li>Register in the Central Contractor Registration </li></ul><ul><ul><li>www.ccr.gov </li></ul></ul><ul><li>On-line Representations and Certifications Application (ORCA) </li></ul><ul><ul><li>https://orca.bpn.gov </li></ul></ul><ul><li>Cage Code </li></ul><ul><ul><li>www.dlis.dla.mil </li></ul></ul>
    4. 4. <ul><li>Federal Acquisition System </li></ul><ul><ul><li>Federal Acquisition Regulation (FAR) </li></ul></ul><ul><ul><ul><li>www.arnet.gov </li></ul></ul></ul><ul><ul><li>Agency Supplements </li></ul></ul><ul><ul><li>Except as authorized by law, agency supplements shall not conflict with or be inconsistent with the FAR </li></ul></ul>
    5. 5. <ul><li>Who acts for the Government? </li></ul><ul><ul><li>Contract Specialist </li></ul></ul><ul><ul><li>Contracting Officers </li></ul></ul><ul><ul><ul><li>Warrants via SF1402 </li></ul></ul></ul><ul><ul><ul><li>Only person authorized to enter into contracts on behalf of the Government </li></ul></ul></ul><ul><ul><li>Administrative Contracting Officer (ACO), FAR 42.302 </li></ul></ul><ul><ul><li>Contracting Officer’s Representatives </li></ul></ul><ul><ul><ul><li>COR Training </li></ul></ul></ul><ul><ul><ul><li>COR Assignment Letter </li></ul></ul></ul>
    6. 6. <ul><li>Most contract types are classified by how they are priced </li></ul><ul><li>The objective to be achieved when negotiating contracts type and price is to agree on a type and price that will result in reasonable contractor risk while providing the contractor with the greatest incentive for efficient and economical performance </li></ul>
    7. 7. <ul><li>Impact of Contract Types </li></ul><ul><ul><li>The amount of government financial review and surveillance is determined by the type of contract awarded </li></ul></ul><ul><ul><li>The government will have greater interest in the company’s accounting practices where incurred costs are the primary factor in establishing the amount the contracting agency ultimately pays for the work performed </li></ul></ul><ul><ul><li>When the final contract price is unaffected by actual cost or performance, government procurement policy requires considerably less review and surveillance </li></ul></ul>
    8. 8. <ul><li>Contract Types </li></ul><ul><ul><li>Firm Fixed Price (FFP) </li></ul></ul><ul><ul><li>Time-and-Materials (T&M) </li></ul></ul><ul><ul><li>Cost Reimbursement </li></ul></ul><ul><ul><li>Indefinite Delivery/Indefinite Quantity (IDIQ) </li></ul></ul><ul><ul><ul><li>Delivery vs. Task Order </li></ul></ul></ul><ul><ul><li>Government Wide Acquisition Contracts (GWACs) </li></ul></ul><ul><ul><li>Multiple Award Contracts </li></ul></ul>
    9. 9. <ul><li>RFP Process </li></ul><ul><ul><li>Identification of a need </li></ul></ul><ul><ul><ul><li>Site Surveys </li></ul></ul></ul><ul><ul><ul><li>Industry Days </li></ul></ul></ul><ul><ul><ul><li>Draft RFPs </li></ul></ul></ul><ul><ul><li>Bid/No Bid Decision </li></ul></ul><ul><ul><li>Identify Team </li></ul></ul><ul><ul><ul><li>Internal and External Parties </li></ul></ul></ul><ul><ul><ul><li>Teaming Agreements </li></ul></ul></ul><ul><ul><ul><li>Non-Disclosure Agreements </li></ul></ul></ul><ul><ul><li>Release of RFP </li></ul></ul><ul><ul><ul><li>Begin writing BEFORE RFP is released….how? </li></ul></ul></ul>
    10. 10. <ul><li>Read the solicitation (and read it again and again) </li></ul><ul><ul><li>Determine Contract Type </li></ul></ul><ul><ul><li>Schedule B, Supplies or Services and Prices/Cost </li></ul></ul><ul><ul><li>Schedule C, Statement of Work </li></ul></ul><ul><ul><li>Schedule L, Instructions, Conditions, and Notices to Offerors </li></ul></ul><ul><ul><li>Schedule M, Evaluation Factors for Award </li></ul></ul>
    11. 11. <ul><li>What is the difference between cost and pricing? </li></ul>
    12. 12. <ul><li>The government is able to determine the price to be fair and reasonable without evaluating the separate cost elements and proposed profit </li></ul><ul><li>Competition in the market determines the price </li></ul>
    13. 13. <ul><li>Price Analysis Techniques </li></ul><ul><ul><li>Competitive price proposals </li></ul></ul><ul><ul><li>Comparison of previously proposed prices for the same or similar items or service </li></ul></ul><ul><ul><li>Commercial items or services </li></ul></ul><ul><ul><li>Prices set by law or regulation </li></ul></ul><ul><ul><li>Catalog prices </li></ul></ul><ul><li>Price Analysis alone may not be sufficient for: </li></ul><ul><ul><li>Sole source FFP and T&M procurements </li></ul></ul><ul><ul><li>Modification or changes to existing FFP or T&M Contracts </li></ul></ul>
    14. 14. <ul><li>Analyzing the various cost elements that make up the price, e.g., labor, materials, overhead, and profit, in order to determine if the price proposed is fair and reasonable to the Government </li></ul><ul><li>Price analysis must still be performed </li></ul><ul><li>Each element of cost must be verifiable </li></ul><ul><ul><li>Direct Labor </li></ul></ul><ul><ul><li>Materials </li></ul></ul><ul><ul><li>Travel </li></ul></ul><ul><ul><li>Subcontract costs </li></ul></ul>
    15. 15. <ul><li>Actual direct labor rates </li></ul><ul><li>Labor category rates </li></ul><ul><li>Blended rates (covers several categories) </li></ul><ul><li>Weighted average category rates </li></ul><ul><li>Category rates when using prime and subcontractor labor </li></ul>
    16. 16. <ul><li>Define direct costs </li></ul><ul><li>Define indirect costs </li></ul><ul><ul><li>Costs that can’t be directly assigned to the contract </li></ul></ul><ul><ul><li>Consist of cost pools and allocation bases </li></ul></ul><ul><ul><ul><li>Pools are defined by placing costs in logical groupings, e.g., fringe costs, overhead costs, G&A costs, unallowable, etc. </li></ul></ul></ul><ul><ul><ul><li>The allocation base is defined as some measure of cost that can be used to allocate the pool cost, e.g., direct labor hours, direct labor dollars, machine hours, etc. </li></ul></ul></ul><ul><ul><li>Indirect rate = cost pools/allocation base </li></ul></ul><ul><li>Document indirect rates </li></ul>
    17. 17. <ul><li>Indirect Rates </li></ul><ul><ul><li>vary from company to company </li></ul></ul><ul><ul><li>are valid for the course of 1 fiscal year </li></ul></ul><ul><ul><li>determine the “multiplier” for the company </li></ul></ul><ul><li>Are used for: </li></ul><ul><ul><li>Budgeting </li></ul></ul><ul><ul><li>Billing </li></ul></ul><ul><ul><li>Proposals </li></ul></ul><ul><ul><li>Forward pricing rate agreements (FPRAs) (FAR 15.407-3) </li></ul></ul>
    18. 18. <ul><li>Negotiations </li></ul><ul><ul><li>Pre and post negotiation memorandums (PNMs), FAR 15.406-3 </li></ul></ul><ul><ul><ul><li>Consider using for subcontract negotiations </li></ul></ul></ul><ul><ul><li>Certificate of Current Cost or Pricing Data, FAR 15.406-2 </li></ul></ul><ul><li>Contract Award </li></ul><ul><ul><li>Request Debrief </li></ul></ul><ul><ul><ul><li>Must be in writing </li></ul></ul></ul><ul><ul><ul><li>Request must be received within 3 days after notification </li></ul></ul></ul><ul><ul><ul><li>Invite teaming partners or conduct separate debrief depending on size and complexity </li></ul></ul></ul>
    19. 19. <ul><li>Contract Award Meeting </li></ul><ul><ul><li>Can vary by size and complexity of procurement </li></ul></ul><ul><ul><li>Corporate policy defines </li></ul></ul><ul><ul><ul><li>Attendees (including teaming partners) </li></ul></ul></ul><ul><ul><ul><li>Roles and Responsibilities of Attendees </li></ul></ul></ul>
    20. 20. <ul><li>Contract Award Meeting </li></ul><ul><ul><li>Preparation and Review of a Contract Brief </li></ul></ul><ul><ul><ul><li>Sets forth job charging requirements </li></ul></ul></ul><ul><ul><ul><li>Sets forth Billing and Payment Requirements </li></ul></ul></ul><ul><ul><ul><ul><li>Defense Finance and Accounting Services (DFAS) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Wide Area Workflow (WAWF) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Sample Invoice can be found at www.dcaa.mil </li></ul></ul></ul></ul><ul><ul><ul><li>Set forth any pertinent clauses or special terms </li></ul></ul></ul><ul><ul><ul><ul><li>Small Business Set Aside Requirements </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Publicity notification requirements </li></ul></ul></ul></ul><ul><ul><ul><ul><li>75% notification </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Fee withholds </li></ul></ul></ul></ul>
    21. 21. <ul><li>File Documentation </li></ul><ul><ul><li>RFP </li></ul></ul><ul><ul><li>Proposals (All Volumes) </li></ul></ul><ul><ul><li>Teaming Agreements/Non-Disclosure Agreements </li></ul></ul><ul><ul><li>Original contract and all agreements </li></ul></ul><ul><ul><li>Modifications </li></ul></ul><ul><ul><li>Task and Delivery Orders and all Modifications </li></ul></ul><ul><ul><li>Correspondence </li></ul></ul><ul><ul><li>Update contract brief </li></ul></ul>
    22. 22. <ul><li>Changes </li></ul><ul><ul><li>Inside or outside the scope of work </li></ul></ul><ul><li>Work at Risk </li></ul><ul><ul><li>Tracking and approval process </li></ul></ul><ul><ul><li>Subcontractors? </li></ul></ul><ul><li>Contract Close-out </li></ul><ul><ul><li>Incurred Cost Submissions </li></ul></ul><ul><ul><ul><li>Sample can be found at www.dcaa.mil </li></ul></ul></ul><ul><ul><li>Final Invoice </li></ul></ul><ul><ul><ul><li>Sample can be found at www.dcaa.mil </li></ul></ul></ul><ul><ul><li>Release of Claims and Assignment of Refunds, Rebates, and Credits </li></ul></ul>
    23. 23. <ul><li>Infrastructure Needed </li></ul><ul><ul><li>Accounting System Polices and Procedures </li></ul></ul><ul><ul><ul><li>General Ledger Design </li></ul></ul></ul><ul><ul><ul><li>Invoicing </li></ul></ul></ul><ul><ul><ul><li>Project Budgeting and Reporting </li></ul></ul></ul><ul><ul><li>Timekeeping Policies and Procedures </li></ul></ul><ul><ul><li>Travel and Expense Reimbursement </li></ul></ul><ul><ul><li>Purchasing and Receiving </li></ul></ul>
    24. 24. <ul><li>Segregation of Costs (FAR Part 31) </li></ul><ul><ul><li>System must be able to track costs and allocate to projects </li></ul></ul><ul><ul><li>Direct vs. Indirect Cost </li></ul></ul><ul><ul><ul><li>Clear distinction on chart of accounts </li></ul></ul></ul><ul><ul><ul><li>Direct costs are recorded on a job by job basis </li></ul></ul></ul><ul><ul><ul><li>Indirect costs are calculated at the corporate level and allocated to the jobs </li></ul></ul></ul><ul><ul><li>Development of Indirect Rates </li></ul></ul><ul><ul><ul><li>Fringe </li></ul></ul></ul><ul><ul><ul><li>Overhead </li></ul></ul></ul><ul><ul><ul><li>G&A </li></ul></ul></ul><ul><ul><ul><li>Unallowable </li></ul></ul></ul>
    25. 25. <ul><li>Billing and Collections Procedures and Controls </li></ul><ul><ul><li>Contract Review/Preparation of Contract Briefs </li></ul></ul><ul><ul><li>Invoice Preparation </li></ul></ul><ul><ul><ul><li>Generated from accounting system books and records </li></ul></ul></ul><ul><ul><li>Invoice Review by Program Manager </li></ul></ul><ul><ul><li>Payment monitoring </li></ul></ul><ul><li>Budgeting and Reporting </li></ul><ul><ul><li>Corporate Indirect Rate Budget </li></ul></ul><ul><ul><li>Project Budgets </li></ul></ul><ul><ul><li>Reporting Budget vs. Actual </li></ul></ul>
    26. 26. <ul><li>Manual or electronic </li></ul><ul><li>Record all hours worked </li></ul><ul><li>Time should be entered daily, in ink, for all employees </li></ul><ul><li>Job Number and Project Name should be pre-printed if possible </li></ul><ul><li>Charge Numbers should be provided by Supervisor not accounting department </li></ul><ul><li>Vacation, holiday, sickness, and excused time should be recorded </li></ul><ul><li>Annual Training </li></ul><ul><li>Proof of Process Compliance </li></ul>
    27. 27. <ul><li>FAR Part 31.205-46 </li></ul><ul><li>Expense Reports </li></ul><ul><ul><li>Each employee must complete an expense report for travel </li></ul></ul><ul><ul><li>Receipts should be required for all claimed costs </li></ul></ul><ul><ul><li>Document </li></ul></ul><ul><ul><ul><li>Date and place of the expense </li></ul></ul></ul><ul><ul><ul><li>Purpose of the trip </li></ul></ul></ul><ul><ul><ul><li>Name of employee and title or relationship to contractor </li></ul></ul></ul><ul><li>Use lowest reasonable cost </li></ul><ul><li>Per Diem Rates </li></ul><ul><ul><li>www.gsa.gov </li></ul></ul>
    28. 28. <ul><li>Requestor Submits a Purchase Request </li></ul><ul><li>Purchasing Issues the Purchase Orders (POs) </li></ul><ul><ul><li>Prepare and obtain approval prior to making the purchase </li></ul></ul><ul><ul><li>POs should be sequentially numbered and maintained in a log </li></ul></ul><ul><li>Item is Received and Compared to the PO </li></ul><ul><li>Invoice is Received and Payment is Made for Accepted Item(s) </li></ul><ul><li>If property is purchased with Government funds, it is considered Government Furnished Property and FAR Part 45 should be followed </li></ul>
    29. 29. <ul><li>Defense Contract Audit Agency (DCAA) </li></ul><ul><ul><li>Types of Audits </li></ul></ul><ul><ul><ul><li>Accounting system </li></ul></ul></ul><ul><ul><ul><li>Financial capability </li></ul></ul></ul><ul><ul><ul><li>Pre-award </li></ul></ul></ul><ul><ul><ul><li>Timekeeping </li></ul></ul></ul><ul><ul><ul><li>Billing </li></ul></ul></ul><ul><ul><ul><li>Incurred Cost </li></ul></ul></ul><ul><li>DCAA Resources </li></ul><ul><ul><li>www.dcaa.mil </li></ul></ul><ul><ul><ul><li>Information for Contractor’s Guide </li></ul></ul></ul><ul><ul><ul><li>DCAA Audit Programs </li></ul></ul></ul><ul><ul><ul><li>DCAA Contract Audit Manual </li></ul></ul></ul>
    30. 30. <ul><li>Beverly Arviso, CPA, CPCM, CFCM </li></ul><ul><li>Founder, Arviso, Inc. </li></ul><ul><li>[email_address] </li></ul><ul><li>757-373-9536 </li></ul>
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