The Week Ahead - October 7, 2013

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MAGIC 8 BALL SAYS “ASK AGAIN LATER” ON GOVERNMENT SHUTDOWN ENDING

While it was easy for Allen Federal to forecast a government shutdown, we predicted it at least three weeks ago, it is much harder to predict when it might end. With no leadership coming from the White House and, to be fair, a House Republican Caucus that can’t always be led by its purported leaders, two traditional elements of what we can usually rely upon to break a deadlock are missing. The House feels that it must get something for its effort to go all the way. What that might be, though, is hard to tell – even for them. Still it is possible that the President could make some concession and a clean funding bill would pass shortly thereafter. Another possible scenario is that those who insist on tying the defunding of Obamacare to passing a spending bill will either be isolated enough to no longer be an obstacle, or feel so much pressure from constituents that they eventually bend to the people’s will. Already, some House Republicans have indicated that they want to pass a clean funding measure. If that number continues to grow, such a bill could be passed in days. Our original forecast was that a shutdown would last 48-72 hours. Now, however, it looks like the shutdown will be with us at least through the coming weekend and possibly into next week. This makes the shutdown one of the longest, if not the longest, in history. Stay tuned.

 

AGENCY-BY-AGENCY SHUTDOWN GUID

Federal News Radio in Washington, DC has put together a comprehensive listing of federal agency shutdown memorandums. These are each agency’s own official documents announcing the shutdown and how they will handle operations during this time. Find the information on the agency you need to know about here: http://www.federalnewsradio.com/153/3468370/Agency-by-agency-shutdown-guidance

 

GETTING STOP WORK ORDERS? HERE’S WHY THAT MIGHT BE

Several companies have reported that they are receiving stop work orders from their closed federal customers. Buying agencies, such as GSA, report that this is a major part of their work as well. There are several reasons why this may be happening, depending on the type of contract you have. Here is a brief summary of some of the most likely reasons.

Your Contract Was Paid For With FY’13 Money: If this is the case and you received a stop order, the most likely reason is that your customer believes there will be no one there to receive what you’re shipping. Things tend to get lost or returned in cases where people aren’t right there to receive a shipment, even when the government is open. If your order was totally paid for with FY’13 (or earlier) money, though, this stop is really a “wait till we get back” notice.

You Have a Firm, Fixed Price Contract: This scenario means that your stop notice is also likely more of a “wait” notice. Work can continue on FFP tasks, but if there is a deliverable needed, no one may be there to receive it. Similarly, if you’re supplying services on a government site, the shutdown prohibits contractors in almost all circumstances from coming onto that site.

You Have a Multi-Year Task Order: If this is the case, your stop order is likely due to the fact that the money needed to pay you for work done in FY’14 is not there. Most, but not all, federal contracts are paid for via appropriated dollars and, of course, Congress has yet to appropriate dollars for FY’14. The federal Anti-Deficiency Act forbids the government from committing to obligations for which it does not have money. This reason may also apply if your firm is working on a multi-phase project. Anything that needs new appropriations to continue is stopped right now, except in some extreme cases like true national security needs. Decisions on whether these projects will continue post shut-down will made by each agency on a case-by-case basis. Most will likely go on, but agencies may decide to let specific projects end where they are. Communication with your customer is key once, of course, they return to work.

You Are Working on a Time & Materials Contract: The stop order here is also likely tied to the Anti-Deficiency Act. You cannot put time in on a T&M contract during a shutdown because the government is incurring an obligation to pay you for that time when they do not have the money to do so. Again, most of these contracts will likely resume when the government re-opens, but some may drop by the way-side. Ask your customer and be prepared to explain why your project should continue if necessary. In some cases, this may be helping them make the case to their superiors, so being helpful here is definitely a best practice. EVEN WITH SHUTDOWN, SOME OFFICES ARE OPEN: Many of the government people Allen Federal contacted this past week were at their posts doing work. This is the anomaly of the “shut down”. Some offices aren’t shut down at all, at least not yet, and while new contracts that rely upon appropriated dollars cannot be awarded, there are people to talk to, relationships to be built, and prep work to be done for when the government does re-open. We all knew that the 2014 Fiscal Year was going to start slowly. Although we didn’t expect it to essentially not start at all, in some cases contractors can keep right on doing the development work they would have done during this time of year anyway. Call on your “exempt” customer contacts. Empathize and commiserate about the sorry state of current affairs, and then shift the focus to what they will have going on in the coming months. Both of you will benefit from taking a step back from the immediate and doing some planning for the future. Don’t use this time to lower your golf handicap, as tempting as that might be. Now is a good time to keep communicating with the government people you can, and the private sector partners you need to in order to grow your business.

 

EVEN WITH SHUTDOWN, SOME OFFICES ARE OPEN

Many of the government people Allen Federal contacted this past week were at their posts doing work. This is the anomaly of the “shut down”. Some offices aren’t shut down at all, at least not yet, and while new contracts that rely upon appropriated dollars cannot be awarded, there are people to talk to, relationships to be built, and prep work to be done for when the government does re-open. We all knew that the 2014 Fiscal Year was going to start slowly. Although we didn’t expect it to essentially not start at all, in some cases contractors can keep right on doing the development work they would have done during this time of year anyway. Call on your “exempt” customer contacts. Empathize and commiserate about the sorry state of current affairs, and then shift the focus to what they will have going on in the coming months. Both of you will benefit from taking a step back from the immediate and doing some planning for the future. Don’t use this time to lower your golf handicap, as tempting as that might be. Now is a good time to keep communicating with the government people you can, and the private sector partners you need to in order to grow your business.

 

KNOW THE RULES AND STAY COMPLIANT

Announcing Federal Publications Seminars CONTRACT COMPLIANCE WEEK - October 21-25, 2013 - L’Enfant Plaza Hotel, Washington, DC. Join Fed Pubs, Larry Allen, and other star instructors for one week of comprehensive coverage of government contract compliance issues from the basics through advanced subjects, and featuring basic and advanced courses in Multiple Award Schedule Contracting. Choose one or more of 10 course offerings that work best for you.

  • Accounting Compliance for Government Contractors
  • Advanced Issues in Multiple Award Schedule Contracting
  • Basics of Multiple Award Schedule Contracting
  • DCAA Contractor Business Systems and Internal Controls
  • Government Contract Compliance
  • Internal Controls Compliance Leading Practices
  • Introduction to Government Construction Contracting
  • New Developments in Contract Compliance and Fraud Enforcement
  • The Mandatory Disclosure Requirements
  • Wage and Hour Compliance

October 21-22 Basics of Multiple Award Schedule Contracting A basic-level course covering key elements of multiple award schedule contracting and recent developments affecting the practice. October 23-24 Advanced Issues in Multiple Award Schedule Contracting Course covers the primary areas of Schedule Contracting, with a special focus on compliance, audits, and risk avoidance. 1. To learn more about Contract Compliance Week, visit j.mp/complianceweek2013 2. To download a conference brochure, visit http://www.fedpubseminars.com/Assets/Brochure/92.pdf To register, visit fedpubseminars.com or call 1.888.494.3696