8 GovCon Resources You Need To Consider When Executing Government Contracts

8/14/2022

8 GovCon Resources You Need To Consider When Executing Government Contracts

Getting a Government Contract is a great feeling but it's also just the start of the journey. Next you need to fulfil the contract on the contracts terms.

We have compiled the following list of helpful websites intended to primarily help Government Contractors with Contract Execution.

Some these websites and resources may also be useful when crafting government contract proposals.

Website Name:

Website Address:

This is helpful if you want to:

Defense Federal Acquisition Regulation Supplement (DFARS)

https://www.federalregister.gov/defense-federal-acquisition-regulation-supplement-dfars-

Inquire about a Federal Regulation for a DoD contract

Electronic Subcontracting Reporting System (eSRS)

www.esrs.gov

Report on a Small Business Subcontracting Plan Goals (Required If FAR Clause 52.219-9 is in the contract)

Federal Acquisition Regulation (FAR)

www.acquisition.gov/far/

Inquire about a Federal Regulation for a contract
Research the Regulations for the Federal Government Acquisition Process

Federal Travel Regulation (FTR)

www.gsa.gov/federaltravelregulation

Check the Government Travel Regulations that guide both Federal Government Contractors and Federal Government Employees. It details what is reimbursable

Government Accountability Office (GAO)

www.gao.gov/index.html

Read reports about the Federal Government acquisition
Review legal decisions (e.g. protests)

OPM – holiday schedule

www.opm.gov/policy-data- oversight/snow-dismissal-procedures/federal- holidays/

Plan for Federal Government projected holidays for each year. (Currently, holidays through 2020 are listed.)

Per Diem Rates (CONUS)

www.gsa.gov/portal/content/104877

Find out what amount is allowed for per diem (meals and incidental expenses as well as lodging) for destinations within the Continental United States (CONUS)

Per Diem Rates (OCONUS)

perdiem-rates.com/oconus-per-diem/

Find out what amount is allowed for per diem (meals and incidental expenses as well as lodging) for destinations Outside the Continental United States (OCONUS)

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Now's the perfect time to review and adjust your paycheck: Payroll Tax Rates and Employee Benefit Limits for 2022

7/16/2022

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Now's the perfect time to review and adjust your paycheck: Payroll Tax Rates and Employee Benefit Limits for 2022

July is the perfect time to review and adjust your paycheck. At the start of every year there are tax law changes and revisions to some or all benefit limits, and too often employees don't adjust their paycheck for these changes.

This is actually very understandable as the new year is one of the most hectic time of the year. Instead of feeling bad about it, use the slower pace of the summer to do it.

To help enable this we've provided the 2022 Payroll Tax Rates and Employee Benefit Limits for you below:

Social Security tax

In 2022, the Social Security tax rate is 6.2% for employers and employees, unchanged from 2021. The Social Security wage base is $147,000 for employers and employees, increasing from $142,800 in 2021. Self-employed people must pay 12.4% on the first $147,000.

Medicare tax

In 2022, the Medicare tax rate for employers and employees is 1.45% of all wages, unchanged from 2021. Self-employed people must pay 2.9% on all net earnings.

Additional Medicare tax

In 2022, the additional Medicare tax remains unchanged at 0.9%. This tax applies to wages and self-employment income over certain thresholds ($200,000 for single filers and $250,000 for joint filers).

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401(k) limits

In 2022, the maximum contributions to traditional and safe harbor plans are as follows:

Employee catch-up (age 50 or older) = $6,500, unchanged from 2021.
Employee and employer (age 49 or younger) = $61,000, up from $58,000 in 2021.
Employee and employer (age 50 or older) = $67,500, up from $64,500 in 2021.
Employee (age 49 or younger) = $20,500, up from $19,500 in 2021.

Employees can contribute up to $14,000 to a SIMPLE 401(k) plan, up from $13,500 in 2021.

HSA and HDHP limits

In 2022, the maximum contributions to a health savings account are as follows:

Employer and employee = $3,650 (self only), $7,300 (family).
Catch-up amount (age 55 or older) = $1,000.

In 2022, the limits for a high-deductible health plan are as follows:

Minimum deductibles = $1,400 (self only), $2,800 (family).
Maximum out-of-pocket amounts = $7,050 (self only), $14,100 (family).

FSA limits

In 2022, employees can contribute:

Up to $2,850 to a health flexible spending account, increasing from $2,750 in 2021.
Up to $5,000 to a dependent care FSA if filing single or jointly, and up to $2,500 if married but filing separately. The American Rescue Plan temporarily raised the dependent care FSA limits in 2021 to $10,500 and $5,250, respectively. These increases do not apply in 2022.

QSEHRA limits

In 2022, employers with a qualified small employer health reimbursement arrangement can reimburse employees for health care expenses as follows:

$5,450 (self only), up from $5,300 in 2021.
$11,050 (family), up from $10,700 in 2021.

Commuter benefits limit

In 2022, employees can contribute up to $280 per month for qualified commuter benefits (e.g., mass transit and parking), up from $270 per month in 2021. This limit includes any employer contributions

Adoption assistance exclusion limit

In 2022, up to $14,890 in employer-sponsored adoption assistance may be excluded from an employee's gross wages, increasing from $14,440 in 2021.

Remember, these are all federal rates and limits. Be sure to check with the necessary agencies for state and local payroll rates.

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GovCon Resource: The Ins [Pros] and Outs [Cons] of Firm Fixed Price (FFP) Contracts

7/2/2022

GovCon Resource: The Ins [Pros] and Outs [Cons] of Firm Fixed Price (FFP) Contracts

Preparing an estimate at completion is a way to project and see whether your company is on target, performing below expectations, or exceeding them financially. For those who are new to government contracts or are not involved on the financial side, generally more profit is calculated into the price when bidding on FFP contracts because there is more risk. More risk can lead to greater reward - but with careful planning and management of your finances, under-performing can become over-performing!

Conversely, if an FFP contract is not managed well, it can lead to a bigger loss. EACs should be completed either semi-annually or quarterly depending on the size of the contract. The more that is at stake, the more frequently an EAC should be performed. Below are some suggestions to consider when bidding, reviewing, and executing an FFP contract.

Understanding Man-Hours

For full-time employees, be aware of how many man-hours are proposed versus possible man hours that can be worked. Sometimes the government stipulates how many man-hours should be calculated into the proposal; and at other times man-hours are reduced to be price competitive.

If fewer man-hours are proposal, have a plan for the extra time.

Can employees help on proposals or other projects?
Can you delegate certain administrative activities?

It may also be possible to have an employees take/coordinate paid time off (PTO) with contract and internal activities in mind. Undoubtedly this will require better and more consistent planning and even company guidelines so it's fair to all. Further, find out as early as possible if/when employees are going to take vacation. If employees are going to be required to use their vacation during a certain time period, check with the HR department or an HR consultant to ensure this does not violate any labor laws and is in compliance with the company handbook and policies.

Wage Increases

When bidding, take into account when employees will be receiving performance reviews, especially if it is done on the employee's anniversary date and not at one time for the entire company.

A "bigger picture" question for the company is whether salary increases depend on the financial performance of the contract or solely on one's individual performance. We have experienced companies basing increases both ways. We are not an advocate for a specific method; however, it must be consistent throughout the company.

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New Hires

Have there been any new hires? Depending on whether an employee with the necessary skill-set is relatively easy or difficult to find, this could affect the profit positively or negatively.

Does the company have to pay for the new employee to attend training?
- If so, is this on the company's dime?
Does there need to be overlap with the former employee and the new employee?

This would be an additional cost that most likely could not be foreseen, but the impact should be measured.

Additional Costs (not included in bid)

Are there any costs that the company did not account for in the proposal and that are not covered by a separate Other Direct Cost (ODC) line item?

Examples Include:

For example, did the company need to buy additional software specific to the project and not billable?

Indirect Rates

How do the provisional indirect rates compare to the actual indirect rates? If the actual indirect rates are lower, of course this increases profit. Conversely, if the actual indirect rates are higher, this lowers profit. After the EAC is complete, this is an opportune time for the company to review indirect rates, and make cuts if necessary. Reviewing suppliers and vendors on a regular basis is a best practice.

Partway through an FFP Service Contract, check and see whether the 10% profit that was bid is still projected to be 10% or will more likely be closer to 6% or 14% profit. The company may be pleasantly surprised. If not, possibly adjustments can be made. At the very least, the company cannot say it did not have advance warning and can plan accordingly.

Focus on the five areas listed above and your company will maximize its profit on FFP service contracts.

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Tax Year 2022 Update: The IRS Responds to Inflation With A Rare Midyear Mileage Rate Change

6/21/2022

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Tax Year 2022 Update: The IRS Responds to Inflation With A Rare Midyear Mileage Rate Change

The IRS has announced an increase in the optional standard mileage rate for the final 6 months of 2022.
Taxpayers may use the optional (instead of actual expenses) standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other tax deductible purposes.

Midyear increases in the optional mileage rates are rare; the last time the IRS made such an increase was in 2011.

For the final half of 2022 (July 1, 2022 to December 31 2022):

Business and Medical Mileage Change

• The standard mileage rate for business travel will be 62.5 cents per mile, up 4 cents.
• The new rate for deductible medical & moving* expenses will be 22 cents, up 4 cents.
• The rate for charitable organizations remains unchanged at 14 cents per mile.

* availlble only for active-duty members of the military

Prices Means Infation

"The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices," said IRS Commissioner Chuck Rettig. "We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate."

Though the price of fuel is definitely a major factor when it comes to calculating your mileage, there are other factors that have to be taken into account, including the rate at which your car depreciates as well as its insurance and any other fixed costs you might have.

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