Deltek Insight 2010: Government Contracting Industry Outlook
XT-204: GovernmentContracting Industry OutlookPresented By:Alan Chvotkin, Professional Services CouncilPeter Lauria, Baker Tilly
Agenda• Federal spending history & outlook• Key acquisition policy initiatives and trends• Increased oversight and accountability of contractors• DCAA and OIG update• Strategies to mitigate contract compliance risk• Shared Experiences
Key Session Takeaways (Session Objectives)• Federal spending trends• Impact of increased scrutiny during the “War on Contractors”• New and proposed acquisition policy legislation and regulations affecting contractors• Practical advice and examples for mitigating contracting risks
Federal Spending Trends• Continued tough fiscal realities• Mandatory spending vs. discretionary spending • Mandatory Spending + Interest at 62% of budget – Headed to 74% by FY19 • Interest on debt continues to grow! Projected 84% of the deficit by FY19 • There is little room for “needs” let alone “wants”• Defense vs. civilian agency spending • Three year planned growth of “security agencies” spending unsustainable • Impact of non-security agency “freeze” just the start; lots of “losers” • Professional services market unpredictable
Key Acquisition Policy Initiatives and Trends• Obama’s continued focus on contracting policy and efficiency • Presidential Memo on Govt. Contracting (March 4) • Three 2009 OMB memos on implementation • 12/19/09 OMB report on interim success • 3/31/10 proposed OFPP policy letter on “Work Reserved for Performance by Federal Government Employees”• Four Executive Orders on labor matters issued in 2009 • 3/19/10 Implementing Labor Dept rule on non-displacement of employees (continued)
Key Acquisition Policy Initiatives and Trends• Executive Order on reducing greenhouse gases and leveraging federal procurement (10/5/09)• Presidential memos • Tax Delinquencies • Overpayments• Insourcing / role of contractors• FY11 National Defense Authorization Act • HASC Defense Acquisition Reform Panel recommendations • Small business contracting initiatives/programs parity
Oversight and Accountability of Contractors• Continued transparency & accountability trends – False Claims Act revisions• Conflicts of Interest Increased – Organizational – Personal• Contractor Systems Compliance – DFARS Business Systems rule – Federal Awardee Performance and Integrity Information System (FAPIIS) final FAR rule and proposed grants rule• DFARS “class deviation” regulations• Ethics, Ethics, Ethics!• Compliance, Compliance, Compliance!
DCAA and OIG Update• DCAA actions • New director but no new direction! • Binary determination of “adequate” or “inadequate” • Audit Guidance on the Status of Contractor Systems of Internal Controls (10/22/09) [Where audit of relevant internal control system is not current, prior opinion on the adequacy of the system shall be excluded from the audit report and report should indicate that a current audit of the system has not been performed.] • Resolving significant disagreements when CO does not concur with DCAA
DCAA and OIG Update• OIG actions • Proliferation of special IG offices: o TARP o SIGAR o Recovery Act • Use of IG testimony, reports and recommendations
Strategies to Mitigate Contract Compliance Risk• Early identification, planning and management of regulatory changes• Regular meetings with advisors to properly address and manage issues• Actively position yourself to play offense, not defense – Accounting policy – Internal Control Environment – Operating practices• Implement corrective actions promptly• Do front-end work versus back-end – Staying out of trouble costs less than getting out of trouble• Participate in appropriate advocacy activities (e.g. join PSC and be active!)
Shared Experiences• What are YOU experiencing?• How are you dealing with the changes?• What can we learn from each other?• Open Question & Answer Session
Call to Action For more information please contact us.Alan Chvotkin Peter LauriaChvotkin@pscouncil.org firstname.lastname@example.org 703.923.8662
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