The BDO GovCon Week Ahead - August 2020
August 31, 2020
States Say FEMA May No Longer Pay for Personal Protective Gear: State and local governments officials say the Federal Emergency Management Agency (FEMA) has indicated it might no longer provide reimbursements for personal protective equipment (PPE) and other supplies needed to fight COVID-19. Currently, FEMA reimburses state and local governments for 75 percent of the costs for PPE and disinfectants, but this eligibility may change. The letter suggested the potential change might be because the Trump administration is now allowing states to tap into $44 billion in FEMA’s disaster relief fund to provide extra unemployment benefits to Americans out of work because of the coronavirus recession. The National Governors Association and other groups have argued Congress should provide new funding for expanded unemployment benefits instead of dipping into the disaster relief fund.
More information on the letter can be found here.
Juxtaposition in Agency Modernization: Internal Revenue Service vs US Air Force: Two articles were published on Nextgov.com on the same date, August 26, 2020. One article entitled “Air Force Taps Machine Learning to Speed Up Flight Certifications” was in obvious juxtaposition to the state of affairs at the Internal Revenue Service in the other article entitled “IRS Doesn’t Know How Many Legacy Systems It Has or How Much They Cost, IG Says.” The IRS was founded in 1862, the USAF nearly a century later in 1947. That, however, is no good excuse for the IRS to neglect, delay or abstain from cataloging its IT equipment at a minimum, let alone create an agency-wide modernization strategy, to paraphrase the Treasury Inspector General for Tax Administration (TIGTA). On the other end of the spectrum, USAF Chief Data Officer, Donna Cotton, has fully embraced machine learning in order to address repetitive or data analytics heavy tasks such as flight certifications. A collaborative effort between machine learning industry leaders Tamr, Dell and Cloudera and USAF resulted in USAF’s ability to automate upwards of 80% of requests for analysis – saving significant time, effort and taxpayer dollars.
Government contractors seeking to help modernize agencies laden with legacy IT systems are encouraged to bring their excellent past performance and funds from the Technology Modernization Fund in order to implement strategic technology improvements.
Please check this link about the Air Force and this link about the IRS for more information.
CDC COVID-19 Law Lab Published: The Centers for Disease Control and Prevention (CDC) launched a new interactive website that collects and shares legal documents from more than 190 countries to aid policymakers in establishing strong legal frameworks to manage the pandemic. The project offers free toolkits and a database of law and policy documents. Searchable legal topics include isolation and quarantine measures, movement and distancing restrictions, disease surveillance and technology, and states of emergency, among others.
Certified Success with BDO’s ERP Deltek Costpoint Implementation Team: BDO’s Deltek Costpoint implementation consultants are highly trained subject matter experts (SMEs) that understand the nuances of effectively configuring and implementing financial systems that meet the complex reporting requirements of the constantly evolving enterprise. We understand the importance and effectiveness of well-timed financial, management, and program reporting. Our consultants have numerous years of industry experience developing business processes, procedures and system controls that help ensure management receives recurring, relevant information as needed to make informed decisions.
Our diverse team of SMEs consists of industry knowledgeable professionals that have earned Deltek Costpoint Master Certifications validating advanced knowledge within multiple areas of the Costpoint product suite. In addition, our team of professionals have achieved Deltek Certifications in General Ledger, Projects, Billing/Accounts Receivable, Labor/Leave/Payroll, and Accounts Payable demonstrating our understanding and proficiency with Costpoint. Each professional on the BDO Deltek Implementation team stays current with the latest trainings available in the Deltek Learning Zone to ensure the most up-to-date implementation for using their enhanced skills in Costpoint, CER, Cobra, and Time & Expense.
BDO’s serves over 400 government contractor and federal fund recipients across all practice areas providing breadth and depth of industry expertise from seasoned corporate executives, former government and military leaders, and industry specialized consultants. BDO’s Industry Specialty Services (ISS) practice provides innovative, cost-effective services to help clients maximize and maintain efficient utilization of their accounting and project management reporting applications.
Deltek awarded BDO Global Consulting Partner of the Year in 2018 for outstanding work in implementing Deltek solutions to its clients. As one of Deltek’s largest implementation partners we are well positioned to be the implementer of choice for federally funded organizations.
August 24, 2020
DCAA Releases FAQs to its Auditors on COVID-19 Costs: On July 31, 2020, the Defense Contract Audit Agency (DCAA) posted a set of answers to frequently asked questions (FAQs) on its website. The FAQs give auditors guidance on how to approach/review government contractor costs related to COVID-19 and considerations for resulting audits. It also touches on aspects of Section 3610, for which Defense Pricing and Contracting (DPC) continues to finalize its guidance. The FAQs cover topics from whether contractors should adjust provisional billing rates if they’re deferring current payroll taxes to which leave costs a contractor can have reimbursed through CARES Act Section 3610. While the FAQs do not cover all topics or provisions, they do provide critical information to government contractors on how the DCAA will be auditing costs. Of most importance is the fact that the FAQ is only two pages long, which inevitably will cause varying opinions between DCAA auditors and contractors.
The FAQs can be found here.
U.S. Court of Appeals Reverses Dismissal of Boeing Suit – Concurrent Changes to Cost Accounting Practices (Cost Impacts): The U.S. Federal Court of Appeals released a significant decision related to the calculation of the Cost Accounting Standards (CAS) cost impact of Cost Accounting Practices (CAPs). Boeing has successfully overturned a lower court decision that enforced a federal government decision to collect $1 million due to unilateral cost-increasing cost accounting practice changes, even though Boeing had simultaneously submitted evidence that other unilateral cost accounting practice changes more than offset these increases.
The court has determined that the portion of Federal Acquisition Regulation (FAR) 30.606 which says that administrative contracting officers "Shall not combine the cost impacts of any of the following unless all of the cost impacts are increased costs to Government...(A) one or more unilateral changes" is illegal. The Appeals Court also dismissed the lower court’s determination that Boeing should have objected to the contract clause that enacted the FAR 30.606 before entering into all the contracts to which it applied. The Appeals Court determined that even if Boeing did object, there was no way a contracting officer could have amended or deleted the contract clause.
While this is not a final decision (Boeing still needs to convince the Court of Federal Claims), it does bring back to the life what industry has lamented for years, which results in hope for contracting officers considering the offsetting impacts of simultaneous unilateral cost accounting practice changes.
More information on the reversal can be found here.
FEMA Establishes Voluntary Agreement with Industry to Assist in Pandemic Response: Under the authority of the Defense Production Act (DPA), Sec. 708, FEMA established a voluntary five-year agreement for enhanced coordination and cooperation with private sector manufacturers, distributors, and industry representatives to provide critical health and medical resources to respond to COVID-19 and future pandemics.
This voluntary agreement will better allow the federal government to plan for response activities with private sector partners and acquire and use real-time data to make important decisions by allowing federal departments and agencies to engage with private sector partners to develop sector-specific plans of action for improved information sharing and coordination within supply chain networks. Participants of the agreement are granted relief from antitrust laws for specific actions taken under the agreement.
Title I of the DPA allows the government to priority rate contracts and orders where needed for national defense and to allocate scarce resources in the market. DPA Title I rating authority allows government-rated orders to receive priority in fulfillment. Title I has been implemented in the last few months by FEMA to secure N95 respirators from 3M and by Human Health and Services with several contracts to provide personal protective equipment and ventilators.
Title III of the DPA allows the federal government to make loans, loan guarantees, and to take other actions to increase or protect materials and services essential to national defense. The CARES Act allocated $1 billion for Title III projects related to COVID-19. Title III funds are managed by the Department of Defense.
Companies and organizations who wish to participate in this agreement may contact [email protected].
The authority for the voluntary agreement is found in Title VII of the DPA. For more information on DPA authorities, click this link. For more information on the agreement, click this link.
BDO Knows D365 F&O: Deltek Costpoint has traditionally been the ERP system that many government contractors have turned to for project tracking compliance. There are critical government contracting compliance and regulatory requirements needed in a system to address DCAA, FAR, CAS, and Defense Contract Management Agency (DCMA). Microsoft Dynamics D365 for Finance and Operations (D365 F&O) is now gaining popularity and traction in the government contracting space, especially with manufacturing companies. Along with deep industry experience, the BDO ERP team now has the system knowledge to fully support clients looking at D365 F&O as their ERP system.
D365 F&O offers traditional finance functions (GL/AP/AR/FA) but with integrated, operational activities to provide the end-to-end view of an organization. It easily handles many of the government contracting compliance areas focused on traceability, workflows, controls, contracts, indirect cost management, and reporting. The learning curve for D365 F&O is greatly reduced as it uses a lot of the same icons and shortcuts, as well as having a similar look and feel to Microsoft Excel. There is also native integration with Excel allowing for ease in creating reports and entering or uploading data.
Microsoft continues to invest heavily in D365 F&O; however, there are still a few gaps in system functionality pertaining to government contractors. BDO understands theses gaps and has created the necessary functionality and steps to address them. BDO is committed to providing our clients the best system to support their business operations and considers D365 F&O a valid option to implement for our government contracting clients.
To provide further education, we are holding monthly one-hour sessions on core specific D365 F&O capabilities. Please feel free to attend and share this information as we want to let everyone know that BDO knows D365 F&O!
Microsoft Dynamics 365 monthly sessions (12-1 EST)
- 08/20/2020 – D365 F&O Overview
- 09/16/2020 – D365 F&O Procurement
- 10/14/2020 – D365 F&O Production
- 11/11/2020 – D365 F&O Projects
- 12/16/2020 – D365 F&O Reporting
Registration information will be available for future sessions in subsequent newsletters. Reach out to us in the meantime with questions.
August 18, 2020
Improving Rural Health via Telehealth Access: On August 3, 2020, President Trump issued an executive order (EO) focused on improving rural health via telehealth access. The EO cites the 129 rural hospitals that have closed since the Affordable Care Act was passed in 2010, which has led to healthcare deserts in many rural communities across the U.S. Telehealth adoption had been hampered primarily due to inadequate technology access in rural communities, in addition to archaic laws governing inter/intrastate healthcare insurance. It took a pandemic and a presidential decree to propel the telehealth sector forward toward a significantly higher adoption rate. Consistent with this administration’s focus on deregulation, the Secretary of Health and Human Services (HHS) has been tasked to set forth policy initiatives to “eliminate regulatory burdens that limit the availability of clinical professionals,” upend the traditional healthcare focus toward improving healthcare outcomes, and improve mental health and maternal morbidity rates across the U.S. The Veterans Health administration, Defense Health Administration, and HHS have all applied telemedicine in limited capacity over the past decade. Government contractors are well suited to parlay their government agency experience into the private sector as rural telehealth gains more steam. Similarly, commercial telemedicine vendors are wise to investigate a swiftly developing federal telehealth market.
The IRS Tries Experimental Contract Vehicle: The IRS wants to rely on a mix of acquisition data to gain better insight into federal buying patterns. In using its experimental Pilot IRS procurement vehicle to test out new ideas, the IRS plans to work with the Office of Management and Budget on the Frictionless Acquisition Cross-Agency Priority (CAP) goal, which “calls upon the government to modernize the collection, analysis, availability, and visualization of acquisition data for smarter and faster mission decision-making.” To supplement this work, IRS officials are looking at current and innovative ways to combine distinct databases and sources on labor and wage rates into coherent, easy-to-use datasets with visualization and other analytical tools. Overall, the project is looking to accomplish three goals:
- Bring together multiple data sets into an easy-to-use visualization or tool that provides comparison points for evaluating labor rates proposed for use in government contracts.
- Promote use of this information by government personnel during the independent government cost estimating, source selection, and contract negotiation processes.
- Achieve near-term and incremental improvements in the number of data sets included, rigor of the analysis, etc.
FEMA Extends Temporary Rule on Exporting Personal Protection Equipment: On August 10, 2020, the Federal Emergency Management Agency (FEMA), under the Department of Homeland Security, will be extending and revising a Temporary Final Rule (first issued in April2020) that invokes the Defense Production Act (DPA) to allocate certain Personal Protective Equipment (PPE) for domestic use and prohibit exportation of that PPE from the U.S. without express FEMA approval. The revised and extended rule will be effective from August 10, 2020, through December 31, 2020, and authorizes Customs and Border Protection to detain outbound shipments of PPE until FEMA determines whether to return the shipment for domestic use, issue a DPA-covered order against the PPE, or allow the export of all or part of the order in the interest of national defense. Most importantly, the revised rule amends the definition of covered PPE (“covered material”) to account for domestic supply and demand changes since April.
More information on the rule can be found here.
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