Schedule a consult NOW
Schedule NOW
Winning the Bid: Navigating Firm Fixed Price, Time & Materials, and Cost-Type Contracts for Government Contractors

Winning the Bid: Navigating Firm Fixed Price, Time & Materials, and Cost-Type Contracts for Government Contractors

Jan 15, 2025

Mastering Government Contracts: A Guide for Contractors Bidding on Firm Fixed Price, Time & Materials, and Cost-Type Contracts 

For government contractors, understanding the distinctions between various contract types and knowing how to navigate their unique requirements is essential for success. Firm Fixed Price (FFP), Time & Materials (T&M), and Cost-Type contracts each present different challenges and opportunities. This guide will help contractors understand the key differences, how to record costs accurately, and strategic ways to improve bidding success. 

Understanding the Contract Types

Firm Fixed Price (FFP) Contracts

In an FFP contract, the contractor agrees to deliver a specific product or service at a predetermined price, regardless of the actual costs incurred. This setup puts more financial risk on the contractor, as they must cover any cost overruns. It also incentivizes efficiency since any cost savings achieved by the contractor increase their profitability. 

Key Considerations for Contractors: 

  • Cost Prediction: Contractors need an accurate understanding of labor, materials, and other expenses because cost overruns can’t be passed on to the government. 
  • Risk Management: Effective project management is crucial since contractors bear the risk of unforeseen expenses. 
  • Record-Keeping: Record all costs carefully, especially when working on complex projects, but focus primarily on staying within the quoted amount. 

Time & Materials (T&M) Contracts
Under a T&M contract, the contractor is paid based on the time spent on a project and the materials used. This contract type is often chosen when the scope of work is not fully defined or when there’s a likelihood that requirements may change during the project. Although T&M contracts allow for flexibility, they require close monitoring. 

    Key Considerations for Contractors: 

    • Cost Monitoring: Since payment is based on hours worked and materials used, accurately tracking labor hours and material costs is essential. 
    • Transparency: The government expects a high level of transparency in billing, including backup documentation and detailed records of costs. 
    • Labor Categories: Many T&M contracts have specific labor categories with predetermined hourly rates, so staffing and recording hours must align with these categories. 

    Cost-Type Contracts
    Cost-type contracts, which include cost-plus-fixed-fee (CPFF), cost-plus-award-fee (CPAF), and cost-plus-incentive-fee (CPIF), reimburse contractors for all allowable costs and add a profit or fee on top. These contracts are generally used when the government cannot accurately predict the work’s cost or scope. Cost-type contracts reduce risk for contractors since they are reimbursed for allowable expenses. 

      Key Considerations for Contractors: 

      • Allowable vs. Unallowable Costs: Contractors need to be meticulous about recording allowable costs. The government may reject unallowable expenses, resulting in revenue loss. 
      • Documentation and Audits: Cost-type contracts often involve detailed government audits, so contractors must keep thorough records of all costs. 
      • Regulatory Compliance: Government cost-type contracts are governed by the Federal Acquisition Regulation (FAR), and contractors need to ensure compliance with FAR Part 31 on allowable costs. 

      Cost Recording Best Practices for Each Contract Type 

      To ensure accurate reporting and avoid compliance issues, contractors should implement robust cost-recording practices specific to each contract type. 

      FFP Contracts 

      • Focus on tracking overall project costs to manage against the quoted fixed price. 
      • Implement a budget-to-actual tracking system to quickly identify areas where costs might exceed budget. 

      T&M Contracts 

        • Use time-tracking software to record labor hours in real-time and ensure accuracy in billing. 
        • Track materials with a detailed inventory and make sure to log usage in real-time to avoid discrepancies. 

        Cost-Type Contracts 

          • Implement a compliant cost accounting system to segregate allowable and unallowable costs according to FAR. 
          • Maintain detailed records of every expense, including receipts and justifications, for auditing purposes. 
          • Regularly review project costs to ensure they align with the contract budget and make adjustments where necessary. 

          Tips to Increase Odds of Winning Government Contracts 

          Bidding on government contracts is competitive, so contractors should develop a strategic approach that includes the following: 

          Understand Government Needs and Pain Points
          Review the solicitation carefully, conduct background research, and highlight how your solution directly addresses the government’s goals. Contractors who demonstrate an understanding of the project’s needs often stand out. 

          Offer Competitive Pricing with Realistic Proposals
          For FFP and T&M contracts, competitive pricing is essential, but be realistic about your costs. Avoid underbidding, as cost overruns can jeopardize contract fulfillment. In cost-type contracts, proposing a reasonable fee structure can make you a more attractive option. 

          Leverage Past Performance and Key Personnel
          Demonstrating a track record of successful projects and presenting a team with relevant experience can make your proposal more credible. Be sure to highlight similar projects in your proposal and mention key personnel who can add value to the project. 

          Ensure Compliance with FAR and Contracting Requirements
          Government contracts have strict requirements, especially regarding cost accounting, reporting, and ethical practices. A compliant accounting system and thorough record-keeping show reliability and reduce audit risk. This is particularly crucial for cost-type contracts. 

          Develop a Risk Mitigation Plan
          A risk management strategy is particularly relevant for FFP and T&M contracts, where unforeseen costs can impact profitability. Showing the government that you have a risk mitigation plan adds credibility and demonstrates your commitment to project success. 

          Conclusion 

          Whether bidding on an FFP, T&M, or Cost-Type contract, government contractors need to tailor their strategies to each contract’s unique requirements. By understanding the major differences in risk allocation, cost recording, and compliance, contractors can increase their odds of winning contracts and fulfilling them successfully. Use this guide to strengthen your proposal and better position your business in the competitive government contracting space.

          Contributed by: Amanda Dunning

           

           

          COMMON REPORTS FOR GOVERNMENT CONTRACTERS

          COMMON REPORTS FOR GOVERNMENT CONTRACTERS

          Jan 2, 2025

          Key Reports for Government Contractors: A Guide to Compliance and Success 

          Government contracting offers immense opportunities for businesses, but it comes with strict reporting requirements. These reports ensure transparency, accountability, and compliance with government regulations. Whether you’re new to government contracting or a seasoned contractor, understanding the most common reports required can help you stay compliant and avoid penalties. Here’s a breakdown of some of the key reports government contractors must manage. 

           

          1. Incurred Cost Submission (ICS)

          What it is: The Incurred Cost Submission (ICS), also known as the Incurred Cost Proposal (ICP), is one of the most important reports for contractors working under cost-reimbursement contracts. This report details all the costs that a contractor claims have been incurred during the performance of the contract. 

          Why it matters: The Defense Contract Audit Agency (DCAA) uses this report to conduct audits to ensure costs are allowable, reasonable, and properly allocated. Submitting the ICS correctly and on time is essential to avoid delays in payment or disallowed costs. 

          Key components of an ICS: 

          – A schedule of cumulative direct and indirect costs by contract 

          – Labor cost reports 

          – Subcontractor cost reports 

          – Overhead and general and administrative (G&A) expense rates

           

          2. Contractor Performance Assessment Reporting System (CPARS) 

          What it is:  CPARS is a system the federal government uses to assess and document contractor performance during the execution of contracts. The contracting officer evaluates various aspects, including quality of work, timeliness, cost control, and management effectiveness. 

          Why it matters:  Your CPARS rating directly affects your chances of winning future government contracts. Positive reviews can improve your company’s reputation, while poor ratings may result in fewer contract awards. 

          Key components of CPARS evaluations: 

          – Technical performance 

          – Schedule adherence 

          – Cost management 

          – Customer satisfaction 

          – Regulatory compliance 

           

          3. SF 294 and SF 295 – Subcontracting Reports 

          What it is: SF 294 is the “Subcontracting Report for Individual Contracts,” and SF 295 is the “Summary Subcontracting Report.” These forms are used to track how much of a contract’s work is subcontracted to small businesses, women-owned small businesses, or other targeted socioeconomic groups. 

          Why it matters: Many government contracts have small business subcontracting requirements. Contractors must demonstrate that they are meeting these goals. Failing to comply with subcontracting plan obligations can result in penalties, and it can hurt your ability to secure future contracts. 

          Key components of SF 294 and SF 295 reports: 

          – Total dollars subcontracted 

          – Dollars subcontracted to small and disadvantaged businesses 

          – Projected and actual small business subcontracting percentages 

           

          4. Forward Pricing Rate Proposal (FPRP) 

          What it is:  An FPRP is a projection of future costs, including direct labor, overhead, and general and administrative expenses. Contractors submit this report to the government to negotiate fixed rates for indirect costs in upcoming contracts. 

          Why it matters: This report helps contractors and government agencies agree on forward pricing rates, reducing the need for renegotiation during contract performance. It also facilitates better budgeting and cost control for both parties. 

          Key components of an FPRP: 

          – Forecasted direct labor rates 

          – Estimated overhead and G&A expenses 

          – Anticipated project costs over the contract period 

           

           5. Contractor Purchasing System Review (CPSR) Report

          What it is:  The CPSR is a review conducted by the government to assess the efficiency and effectiveness of a contractor’s purchasing system. Contractors are required to provide detailed reports of their purchasing practices, subcontractor selections, and cost controls. 

          Why it matters:  An approved purchasing system gives contractors more autonomy and flexibility in awarding subcontracts. A well-run purchasing system also improves efficiency and reduces the risk of audit findings. Failing a CPSR can result in additional oversight and contract delays. 

          Key components of a CPSR report: 

          – Subcontract award process documentation 

          – Cost and price analysis of subcontractor proposals 

          – Policies and procedures for purchasing 

           

           6. Earned Value Management System (EVMS) Reports

          What it is: Earned Value Management (EVM) is a project management tool used by the government to measure project performance. Contractors working on large projects or cost-plus contracts may be required to submit regular EVM reports that compare actual project progress with planned performance. 

          Why it matters: These reports give the government insights into whether a contractor is on track to meet cost, schedule, and performance goals. If a project falls behind, EVM reports help the contractor and government take corrective action to avoid further delays or cost overruns. 

          Key components of an EVMS report: 

          – Cost Performance Index (CPI) 

          – Schedule Performance Index (SPI) 

          – Planned Value (PV), Earned Value (EV), and Actual Cost (AC) 

           

           7. DCAA Pre-Award Accounting System Adequacy Checklist

          What it is: Before a contract is awarded, the DCAA may assess the adequacy of a contractor’s accounting system to ensure it can handle the complexities of government contracts. The DCAA uses a checklist to verify that the contractor’s accounting system is compliant with government regulations. 

          Why it matters: An adequate accounting system is essential for passing audits and avoiding delays in contract awards. Contractors must demonstrate that they can track costs by contract, properly segregate direct and indirect costs, and maintain records that comply with Federal Acquisition Regulation (FAR) requirements. 

          Key components of the DCAA checklist: 

          – Ability to segregate costs by contract 

          – Timekeeping system and labor charging procedures 

          – Policies for recording indirect costs and allocating overhead 

           

           8. Financial Status Reports (FSR)

          What it is: Also known as Federal Financial Reports (FFR), these reports provide an overview of the financial status of a government contract. Contractors must regularly submit FSRs to show how much of the funds awarded have been spent, and what funds remain. 

          Why it matters: FSRs allow the government to monitor spending and ensure that contractors are staying within budget. This report is critical for maintaining transparency and preventing cost overruns. 

          Key components of an FSR: 

          – Total award amount 

          – Cumulative expenditures 

          – Remaining available funds 

          – Projected spending for the remainder of the contract 

           

          Conclusion 

          Accurate and timely reporting is essential for success in government contracting. These reports not only ensure compliance with federal regulations but also help contractors build trust with government agencies. By understanding and staying on top of key reporting requirements like the Incurred Cost Submission, CPARS evaluations, and small business subcontracting reports, contractors can position themselves for long-term success and avoid costly compliance issues. 

          By maintaining a strong accounting system, clear documentation practices, and proactive management, you’ll be well-prepared to meet the reporting requirements that come with government contracts and continue securing lucrative opportunities in the public sector.  

          As a government contractor, navigating the complexities of compliance and reporting can be challenging. At Cheryl Jefferson & Associates, we specialize in helping businesses like yours streamline their financial processes and ensure adherence to all reporting requirements. Our experienced team understands the intricacies of government contracts, from Incurred Cost Submissions to CPARS evaluations, and can provide tailored solutions to meet your specific needs. Let us be your trusted partner in achieving compliance and maximizing your opportunities in the government contracting space. Contact us today to learn more about how we can support your success! 

           

          Contributed By: Amanda Dunning 

           

          Unlocking Success: Mastering the DCAA Pre-Award Audit for Government Contracts

          Unlocking Success: Mastering the DCAA Pre-Award Audit for Government Contracts

          Dec 4, 2024

          How to Successfully Pass a DCAA Pre-Award Audit: A Guide for Government Contractors 

          Navigating the intricacies of government contracting can be daunting, especially when it comes to understanding compliance requirements like the DCAA pre-award audit. The Defense Contract Audit Agency (DCAA) plays a crucial role in ensuring that government contractors adhere to federal regulations and provide accurate cost estimates. A successful pre-award audit can be the difference between securing a contract and being sidelined in the bidding process. Here’s a breakdown of what you need to know to pass the DCAA pre-award audit. 

          Understanding the DCAA Pre-Award Audit 

          The DCAA pre-award audit is a comprehensive evaluation conducted to ensure that contractors are financially sound and capable of managing federal contracts. The audit assesses a contractor’s accounting systems, cost proposals, and overall financial health to determine if they meet the necessary standards for contract awards.

          Key Components to Prepare For 

            • Adequate Accounting System

          Your accounting system must be capable of segregating direct costs from indirect costs, allocating costs to the appropriate contract, and providing timely and accurate financial data. Ensure that:

          – Your accounting practices comply with Generally Accepted Accounting Principles (GAAP).

          – You have a system in place for tracking project costs effectively.

            • Cost Proposal Development

          The cost proposal is a critical component of the audit. It should be thorough and transparent, providing detailed information on labor, materials, overhead, and any other costs associated with the project. Key steps include:

          – Detailing Cost Estimates: Break down estimates into clear categories (direct labor, materials, overhead).

          – Documenting Supporting Information: Include justification for your estimates, such as historical data or market analysis.

            • Compliance with Regulations

          Familiarize yourself with federal regulations, particularly the Federal Acquisition Regulation (FAR) and the Cost Accounting Standards (CAS). Compliance with these regulations is essential for demonstrating your capability as a responsible contractor.

            • Internal Controls and Policies

          Implement robust internal controls to manage financial operations effectively. This includes:

          – Segregation of Duties: Prevent fraud and errors by ensuring different people handle the authorization, custody, and record-keeping of assets.

          – Regular Audits: Conduct internal audits to ensure your processes are working as intended.

            • Documentation and Record Keeping

          Maintain meticulous records to support your cost proposals. Documentation should include:

          – Invoices and receipts for all expenses.

          – Timecards and payroll records for labor costs.

          – Contracts and agreements that outline terms and conditions.

            • Training and Awareness

          Ensure that your staff is trained in compliance requirements and understands the importance of accurate reporting. Regular training sessions can help your team stay informed about the latest regulations and best practices.

          • Communication with DCAA

          Engage with the DCAA early in the process. Open communication can help clarify expectations and provide insights into the audit process. If you have questions about your compliance status or specific requirements, don’t hesitate to reach out.

          Next Steps 

          Passing a DCAA pre-award audit requires diligence, transparency, and a solid understanding of regulatory compliance. By preparing your accounting systems, developing thorough cost proposals, maintaining accurate documentation, and fostering a culture of compliance, you can increase your chances of securing government contracts. Remember, the pre-award audit is not just a hurdle to overcome; it’s an opportunity to demonstrate your capability and readiness to deliver on federal contracts.  

          By investing the necessary time and resources into your preparation, you set your business up for success in the competitive landscape of government contracting. Feel free to reach out to us here at Cheryl Jefferson & Associates if you have questions or need further clarification on specific aspects of passing a pre-award DCAA audit. We specialize in assisting government contractors with DCAA audits both pre and post award. 

          Contributed by: Amanda Dunning

          Navigating the Red Tape: A Guide to Avoiding Unallowable Costs in Federal Contracts

          Navigating the Red Tape: A Guide to Avoiding Unallowable Costs in Federal Contracts

          Sep 18, 2024

          Navigating the Red Tape: A Guide to Avoiding Unallowable Costs in Federal Contracts

          Navigating the world of federal contracting involves more than just managing budget. It also requires a keen understanding of what expenses can and cannot be reimbursed. Unallowable costs are those expenditures that federal agencies will not cover, as defined by the Federal Acquisition Regulation (FAR) and other federal guidelines. Mismanaging unallowable costs can lead to audits, financial penalties, and even suspension from federal contracts. It is crucial to educate your team, implement robust internal controls, and stay updated on federal regulations. By mastering the management of unallowable costs, you can not only safeguard your project’s budget but also maintain compliance, all while ensuring a successful contracting experience.

          UNDERSTANDING UNALLOWABLE COSTS FOR FEDERAL CONTRACTORS: A COMPREHENSIVE GUIDE  

          The complex world of federal contracting can be challenging, especially when managing costs. For federal contractors, one of the most crucial aspects of maintaining compliance and financial health is understanding what constitutes unallowable costs. These are expenses that federal agencies will not reimburse. Failing to manage them properly, can lead to significant financial and legal repercussions.

          What are Unallowable Costs? 

          Unallowable costs are expenditures that cannot be charged to a federal contract or grant. These costs are defined by the Federal Acquisition Regulation (FAR) along with other federal guidelines. They also outline specific criteria that determine whether a cost can be reimbursed or not. These costs are considered inappropriate or unreasonable in the context of federal funding. 

          Common Examples of Unallowable Costs 

          1. Entertainment Expenses: Your costs related to entertainment, such as tickets to events, social activities, and alcohol, are typically not reimbursable. This also includes expenses for entertaining clients or employees.
          1. Employee gifts: Federal contracts also do not allow any gifts given to your employees unless related to performance for the contract. 
          1. Fines and Penalties: Any fines or penalties resulting from non-compliance with laws or regulations are not allowable costs. Including costs associated with your legal disputes or settlements.
          1. Personal Expenses: Your personal Expenses, such as, personal travel, non-business-related meals, or personal car expenses like, tolls and gas, cannot be charged to federal contracts.
          1. Political Contributions: Your costs related to political contributions or activities are not allowed under federal guidelines.
          1. Bad Debts: Your costs related to the write-off of your bad debts or losses from uncollected invoices cannot be reimbursed.

          Why Understanding Unallowable Costs Is Crucial

          1. Compliance: Failure to adhere to the rules can result in audits, fines, and even suspension or debarment from federal contracting. Compliance is essential to maintain a good standing with federal agencies.
          1. Financial Health: Proper management helps with accurate budgeting and also helps with financial planning. It ensures that only reimbursable costs are charged to the contract, all while protecting your profit margins.
          1. Reputation: Adhering to guidelines builds a reputation of integrity and professionalism. Therefore, leading to more opportunities and stronger relationships with federal agencies.

          Tips for Managing Unallowable Costs 

          1. Educate Your Team: Ensure that all your employees involved in budgeting, accounting, and procurement are well-versed in what constitutes an unallowable cost. Regular training and updates on federal regulations are essential.
          1. Implement Strong Internal Controls: Develop and enforce internal policies to prevent the inclusion of unallowable costs in your financial reporting. Regular reviews and audits of financial practices can help catch potential issues early.
          1. Maintain Detailed Documentation: Keep thorough records of all expenses and the rationale behind them. Detailed documentation can also provide clarity during audits and help justify allowable costs.

          4. Consult with Experts: Engage with accounting professionals or legal advisors who specialize in federal contracting. Their expertise can provide valuable insights and ensure compliance with complex regulations too.

          1. Review FAR and Agency Guidelines Regularly: Federal regulations and agency-specific rules can change. Regularly review these guidelines to stay updated on any changes that might affect what costs are considered unallowable.

          Next Steps

          Understanding and managing unallowable costs is essential for any federal contractor aiming to maintain compliance and financial health. By educating your team, implementing strong internal controls, and staying informed about regulations, you’ll navigate the complexities of federal contracting with confidence. With careful management and adherence to guidelines, you can also ensure that your projects will remain within budget and meet federal requirements too. 

          Feel free to reach out to Cheryl Jefferson & Associates if you have questions or need further clarification on specific aspects of unallowable costs. Staying informed and proactive will help you maintain a successful and compliant federal contracting operation.

           

          Contributed by: Amanda Dunning

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

           

          Signs You Have Outgrown Your Bookkeeper

          Signs You Have Outgrown Your Bookkeeper

          Feb 1, 2024

          Signs You Have Outgrown Your Bookkeeper

          Bookkeepers play a vital role in managing financial records for small businesses. However, as a business undergoes development and growth, its financial needs may surpass the capabilities of a bookkeeper. Depending solely on a bookkeeper may become insufficient during these stages of growth. It becomes imperative for the business’ success to adapt to its evolving financial needs. But how does a business owner know when it is time to make these changes? The key is recognizing the signs that indicate the business has outgrown its existing bookkeeping setup.

          Here are four signs your business has outgrown its bookkeeper:

          You Are Too Involved in Bookkeeping

          Business owners should be focusing on growing their business, not closing their books. An owner that is heavily involved in the day-to-day bookkeeping tasks is a clear indicator that the business may have outgrown its bookkeeper. It is natural for owners to be hands-on in the beginning. However, ongoing heavy involvement can become a bottleneck as the business expands. Business owners are most effective when they focus on strategic decisions, driving growth, and enhancing core business aspects.

          Technological Adaptation is Limited

          Leveraging advanced accounting software and integrating financial systems with other tools is essential for efficient financial management. A business’ bookkeeper must keep up with these advancements and improve their knowledge continuously. Without this development and knowledge in technology, there is a misalignment with the evolving needs of your business. Ultimately, a clear indicator that you have outgrown your bookkeeper.

          Lacking Internal Controls

          At times, a business’ ‘bookkeeping department’ includes one person performing multiple tasks. Internal controls are essential for detecting and preventing errors in financial processes. As a business expands, the volume and complexity of financial transactions grows. Without proper internal controls, including segregation of duties, risk of errors in record-keeping, reconciliation, and financial reporting increases. Lacking internal controls may be another sign you have outgrown your bookkeeper.

          Your Business is Too Complex

          As your business grows, its financial needs often become more complex. This is where strategic planning comes into play. Strategic planning involves forward-thinking, which focuses on forecasting and anticipating future goals. A bookkeeper’s role should evolve with the company. However, if your bookkeeper’s primary focus is on routine tasks and does not actively participate in the planning, this is a clear indicator you have outgrown your bookkeeper.

          Recognizing the signs that your business has outgrown its bookkeeper is not an indication of failure. It presents you with an opportunity for strategic enhancement.  At Cheryl Jefferson & Associates, we focus on accounting and forward-thinking development for small businesses.

          Contributed by Elizabeth Partlow

           

           

          Trends in Government Contracting: What You Need to Know

          Trends in Government Contracting: What You Need to Know

          Nov 15, 2023

          Trends in Government Contracting: What You Need to Know

          Government contracts are a vital sector of the economy that provide services and goods to federal, state, and local agencies. It is a great way for businesses to secure long-term contracts and sustain their revenues. With the ever-changing political climate, government regulations, and the recent pandemic, the government contractors have seen significant changes in the past year. In this blog post, we will take a look at the outlook for government contracts and current trends in government contracting along with what they mean for business owners and government contractors.

          Trends in Government Contracting

          Increased Focus on Cybersecurity

          One of the significant concerns for government agencies is data privacy and security. With more information being stored electronically, cybersecurity threats have become increasingly prevalent. As a result, organizations that provide cybersecurity services are in high demand. Government contractors need to keep up with the latest tools, techniques, and best practices in cybersecurity to stay ahead of the curve.

          Increased Emphasis on Small Business Participation

          The government has recently taken significant steps to increase small business participation in government contracts. These efforts include setting aside specific contracts for small businesses and streamlining the certification process. As a small business owner, it is essential to take advantage of these opportunities by staying up-to-date with government contract regulations and procedures.

          Remote Workforce

          The COVID-19 pandemic has resulted in a shift towards remote work. Many government agencies have enabled telework, and this trend is expected to continue even after the pandemic subsides. As such, government contractors must adjust their work environments to accommodate for remote work while maintaining high-quality service levels.

          Favorable Regulatory Environment

          The current regulatory environment is relatively favorable for government contractors. The 2017 National Defense Authorization Act (NDAA) increased the budget for defense spending, which will lead to more contract opportunities in the Department of Defense. Additionally, the General Services Administration has launched several initiatives to streamline the procurement process and provide more opportunities for small businesses.

          Shift Toward Cloud-Based Solutions

          As the government moves towards more cloud-based technologies, contractors should expect to see increased demand for cloud-based solutions. The government’s “Cloud First” policy means that cloud-based solutions will be preferred over traditional on-premise solutions for most IT procurements. Companies that offer cloud-based solutions should have a competitive advantage in this market.

          Focus on New Technologies

          In recent years, the government has looked to new technologies to improve efficiency and reduce costs. These technologies include artificial intelligence, machine learning, and robotic process automation. As such, government contractors must be aware of emerging technologies to remain competitive in the government contracts space.

          Increased Competition

          The government contracts sector remains crucial to the economy, and the demand for government services will continue to rise. Although there are many opportunities as a government contractor, there is also increased competition. As the market continues to grow, there will be more companies vying for the same contracts. Nevertheless, businesses that stay attuned to the latest trends, adapt to new environments, and invest in innovative technologies can be successful and remain competitive. 

          Focus on Compliance

          The government contracts sector is heavily regulated, and contractors must comply with a variety of laws and regulations. Companies that fail to comply can face significant penalties. As the government increases its focus on compliance, contractors must ensure that they are fully compliant with all applicable regulations.

          The outlook for government contractors is positive, and there are several significant trends in government contracting to keep in mind. Businesses should be aware of the increased focus on cybersecurity, the increased emphasis on small business participation, compliance, the remote workforce, the focus on new technologies, and increased competition. By staying up to date on these trends and remaining adaptable, businesses can succeed in this competitive space.

          Are you a Government Contractor or thinking about becoming a Government Contractor? Virtual CFO provides GovCon-centric strategic accounting for small businesses providing services in technology, architecture, engineering, aerospace, and project management industries. 

          We know your pain points – let us help you relieve them – schedule a consult.