Article Header Banner: All boxes marked on the RFP checklist with arrows showing a growth trajectory Article Header Banner: All boxes marked on the RFP checklist with arrows showing a growth trajectory Article Header Banner: All boxes marked on the RFP checklist with arrows showing a growth trajectory Article Header Banner: All boxes marked on the RFP checklist with arrows showing a growth trajectory

Minimizing Risk to Gain Competitive Advantage

By Robert Smith, CEO of ICAT Systems
March 21, 2023

How can you make your business more competitive for Federal contract awards?

A recurring theme conveyed to small business government contractors at conferences and events is to prioritize risk management.

Government agencies and prime contractors want to minimize risk when selecting contractors and subcontractors to execute their missions. To win contract awards in this highly competitive field, small businesses must demonstrate that they are well-managed, well-equipped, and can be trusted to successfully execute statement of work requirements.

How Can You Demonstrate Your Business is Low Risk?

The selection process for contract awards involves a thorough evaluation of a contractor’s qualifications, which includes considerations of past performance, resume requirements, and background checks. Certifications and adherence to certain operational standards are also factored in.

Many Requests for Proposals (RFPs) offer additional points in the evaluation process to contractors who have attained various certifications demonstrating strong business management and operations. The evaluation criteria and point values will depend on the specific requirements of the contract. Common certifications and requirements specified in RFPs include:

  • ISO 9001 — Quality Management Certifications
  • ISO/IEC 27001 — Information Security Management Systems
  • DFARS Business Systems — including Accounting, Earned Value Management System (EVMS), Estimating, and Purchasing Systems

ISO Certifications for Government Contractors

ISO certifications demonstrate that a company has the management systems and processes in place to ensure high quality, responsible operations. The specific ISO certifications required on a government contract may vary depending on the industry, scope of work, and other factors related to the contract. Certifications are conducted by accredited third-party certification bodies.

Government Contractor Business Systems

DFARS business systems audits ensure government contractors have effective management controls in place to achieve performance, cost, and schedule objectives, and to comply with government regulations. Business systems are audited by the cognizant government agency; for defense contracts, audits are conducted by Defense Contract Audit Agency (DCAA) and Defense Contract Management Agency (DCMA).

The DFARS contractor business systems criteria are defined in the following regulations:

How to Gain Competitive Advantage

It may seem overwhelming to small business owners to have to comply with these various standards. However, success in the contract award process oftentimes comes down to competitive advantage. Companies who take these operating standards and business systems seriously will have a clear advantage over the ones who don’t.

Contractors bidding on government contracts should carefully review the RFP and understand the evaluation criteria and point system to increase their chances of success. These certifications and business systems do take time to prepare for and implement. Looking back at prior RFPs, you can get a good idea of what to expect and how to plan ahead.

Management can successfully achieve these various certifications and implement these business systems. It is a challenge to take these on, and there is help available.

With respect to an adequate accounting system, colloquially known as a DCAA compliant accounting system, companies prioritizing this item will benefit from having a solid financial management system upon which to build their business. Maintaining accurate financial records and budgets can help small businesses identify potential financial problems and address them before they become serious. An adequate accounting system demonstrates the company can properly determine costs charged to a contract, and provides insights to inform pricing.

How ICAT Systems Can Help

Many small businesses use QuickBooks® as their accounting system. It is entirely possible to satisfy the accounting system compliance requirements using QuickBooks Desktop along with appropriate policies and procedures, timekeeping, and cost accounting.

A variety of web-based timekeeping applications are available that can be integrated with QuickBooks to provide a seamless flow of time data that supports labor distribution and billing. ICAT Systems offers an app called ICAT that adds the indirect cost allocation and reporting functionality missing in QuickBooks. With timekeeping and ICAT, QuickBooks can easily be configured to satisfy the DCAA compliance requirements, thus moving the contractor one step closer to success in the competitive landscape.

How can we help set your business up for success? Contact us anytime.

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