Moving from Commercial to Government Construction

Moving from Commercial to Government
for Construction, Engineering and
Facilities Companies
Nicole M. Mitchell | July 20, 2016
http://blogs.aronsonllc.com/fedpoint/

2© 2016 | www.aronsonllc.com | www.aronsonllc.com/blogs |
Life as a Federal Contractor

• Commercial Contracting
– Governed by the Universal
Commercial Code
– Flexibility to negotiate a variety
of T&C
• Terms and conditions are
not predefined
– Interested Parties have Authority
over contract Negotiations
• Loosen or increase T&C
and values based on risk
– Private use of Funds
• Federal Contracting
– Governed by the Federal
Acquisition Regulations (FAR)
• Competition in Contracting
Act (requires open
competition before a
contract is awarded except
in limited circumstances)
– Contracting Officer (CO) acts as
an Agent on behalf of the
Federal Government, while the
CO has Authority, the authority is
to implement the FAR
– Use of Taxpayer Funds
Welcome to Federal Contracting

Differences on Federal Contracts
• Costs may be subject to audit, cost estimates pre-award or incurred
post award.
• Even if your customer is “happy” and the contract was complete on
schedule as defined; audits of regulatory compliance may still
indicate deficiencies.
• The Government can make unilaterial changes to contracts.
• Payment does not mean successful completion of the contract.
• Payment does not mean a liability will not result in the future on an
open contract.
• Formal contract close-out procedures must occur for the contractor
and Federal Government to be released from liability.

Federal Contracting Process and Negotiation

Critical FAR Sections for Federal Contractors
• Subchapter C – Contracting Methods and Contract Types
– FAR Part 13 – Simplified Acquisition Procedures
– FAR Part 14 – Sealed Bidding
– FAR Part 15 – Contracting by Negotiations
– FAR Part 16 – Types of Contracts
– FAR Part 17 – Special Contracting Methods
– FAR Part 18 – Emergency Acquisitions
• FAR Part 31 Contract Cost Principles and Procedures
• Far Part 43 Contract Modifications

Common Pitfalls
• Change Orders – requiring change order accounting and acceptable
accounting systems
• Directions taken from someone on the Federal side who lacks
authority, only a contracting officer has the authority to modify a
Federal Contract
• Cost Allowability – Applying the FAR Part 31 Contract Cost
Principles to ALL contracts
• Subcontracting – Flow down of appropriate clauses and oversight
and monitoring of subcontractors
• Internal Controls – Lack of appropriate internal controls or
documentation of controls
• Cost Recovery – Failure to adequately allocate thus recover general
and administrative costs

About Aronson LLC
Aronson LLC provides a comprehensive platform of assurance, tax,
and consulting solutions to today’s most active industry sectors and
successful individuals. For more than 50 years, we have purposefully
expanded our service offerings and deepened our industry specialties
to better serve the needs of our clients, people, and community. From
startup to exit, we help our clients maximize opportunity, minimize risk,
and unlock their full potential.

About Aronson LLC
• Thinking ahead for clients for more than 50 years
• 225+ professionals located in Rockville, MD
• 80+ professionals dedicated to supporting government contractors
• Aronson helps clients rethink the way they approach their business
through innovative, industry-specific services and advice:
– Audit, Assurance and Tax
– Deltek Systems and Outsourcing
– Financial and Contract Compliance
– GSA Schedules
• www.aronsonllc.com/blogs/fedpoint/ – News and trends and insight
for today’s savvy government contractor

Awards / Accolades / Affiliations
The Gazette of Politics & Business Exceptional 53 Business Award
In 2012, Aronson received the PB53 award for the third year in a row. The program
acknowledges the top businesses and organizations in Maryland based on criteria that
includes the company’s annual revenue, employee growth, noteworthy product or service
innovations, community service efforts and more.
Accounting Today Top Firm
In 2013, Aronson was once again named to Accounting Today’s list of the top 100 firms in
the country. Accounting Today is a leading provider of online business news for the tax and
accounting community.
Washington Business Journal Top 25
Aronson is ranked #12 on the Washington Business Journal’s Top 25 Accounting Firms in
the DC Metropolitan area.
INSIDE Public Accounting Top 100
Once again, Aronson has earned a spot in the top 100 of this prestigious list, released by
INSIDE Public Accounting. This is the longest running, most comprehensive and accurate
independent analysis focusing on management and operations of America’s large local,
regional and national firms.
Washington Business Journal Best Places to Work
Aronson has been recognized five times as one of the Metro area’s “Best Places to Work.”
The award recognizes a company’s achievements in creating a positive work environment
that attracts and retains employees through a combination of employee satisfaction, working
conditions and company culture.
Montgomery County Chamber Corporate Social Responsibility Award
In 2010, Aronson was honored to receive the MCCC’s Corporate Social Responsibility Award
based on the depth and breadth of the company’s energetic commitment to support young people,
in the areas of education, housing and health.

Nicole Mitchell joined Aronson LLC in 1998 and serves as a Partner in
Aronson’s Government Contract Services Group. She received a Bachelor of
Science in Accounting from Frostburg State University and a Masters in
Business Administration from Mount Saint Mary’s College.
Nicole specializes in accounting and financial issues impacting government
contractors. She has a broad-based background in generally accepted
accounting principles and cost principles related to government contractors
including the Federal Acquisition Regulations (FAR) and Cost Accounting
Standards (CAS). Nicole provides consulting and accounting services to
government contractors in the areas of financial regulatory compliance,
contract pricing, and complex cost accounting structures. She has in-depth
knowledge of the key financial business systems and compliance risk unique to
government contractors.
Nicole has been a guest speaker on various financial and government
contracting topics for such organizations as the AICPA, MACPA, Deltek Insight
Conference, and the Howard County Chamber of Commerce. She co-authored
a Thompson RIA reference manual for controllers “Doing Business with the
Federal Government” and is a regular contributor to Aronson’s Fed Point blog.
Partner, Government Contract Services Group
301.222.8231
nmitchell@aronsonllc.com
Nicole M. Mitchell, CPA

301.222.8231
Contact Nicole Mitchell / Aronson LLC
nmitchell@aronsonllc.com
https://www.linkedin.com/in/nicole
mitchellcpa
https://twitter.com/Aronsonllc

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