Service Contractor Magazine - December 2012

D e c e m b e r 2 0 1 2 / T h e Vo i c e o f t h e G o v e r n m e n t S e r v i c e s I n d u s t r y

Thinking Ahead

of the Competition ALso inside: 7

DYNAMICS AND COMPETITION

10

THE GAMEBOARD AND STRATEGIC PLANNING

13

FAR’S NOVATION PROCESS

22

CELEBRATING 40

Engility is our new name, but this is not a new company. Our heritage is built on more than 40 years of proven performance. Engility is a dedicated government services contractor employing highly skilled professionals in the United States and around the world who are the best at what they do.

Solely focused on achieving your mission, Engility will deliver wherever, whenever, in a cost-effective manner with absolute integrity. In today’s challenging economy, our streamlined structure delivers maximum value and gives us the agility to respond to any challenge quickly and efficiently.

With a legacy of success, Engility is your first and best partner for mission success. Visit engilitycorp.com.

December 2012 Service Contractor is a publication of the Professional Services Council 4401 Wilson Blvd., Suite 1110 Arlington, VA 22203 Phone: 703-875-8059 Fax: 703-875-8922 Web: www.pscouncil.org All Rights Reserved PSC Staff Stan Z. Soloway President & CEO soloway@pscouncil.org Alan Chvotkin Executive Vice President & Counsel chvotkin@pscouncil.org Bryan Bowman Manager, Marketing bowman@pscouncil.org Matt Busby Manager, Member Services busby@pscouncil.org Joe Carden Vice President, Marketing & Membership carden@pscouncil.org Elise Castelli Manager, Media Relations castelli@pscouncil.org Bethany Egan Administrator, Coalition of International Development Companies egan@pscouncil.org Larry Halloran Director, PSC International Development Initiative halloran@pscouncil.org Karen L. Holmes Office Manager/Receptionist holmes@pscouncil.org Roger Jordan Vice President, Government Relations jordan@pscouncil.org Jeremy W. Madson Manager, Federal Affairs madson@pscouncil.org Kate Petersen Manager, Legislative Affairs petersen@pscouncil.org Melissa R. Phillips Director of Meetings & Events phillips@pscouncil.org Robert Piening Director of Finance piening@pscouncil.org Jean Tarascio Membership Associate tarascio@pscouncil.org Kristine Thomas Executive Assistant thomas@pscouncil.org For advertising or to submit articles or items for the Member News section, contact: Bryan Bowman

The Voice of the Government Services Industry

The Gameboard and Strategic Planning

10

7

Sounding Board:

How Dynamics are Affecting Competition

13

22

36

FAR’s Novation CELEBRATING 40 POLICY PROCESS SPOTLIGHT

4 President’s Corner / 8 Q&A with Joseph Jordan / 19 Balancing SCA / 26 Annual Conference / 29 Bill Tracker / 39 Committee Corner / 40 Member News / 42 PSC Scene and Heard

Professional Services Council

Service Contractor / December 2012 / 3

B

PRESIDENT ’S CORNER The Shape of Things To Come

y the time this issue of Service Contractor is released, one can only hope that we all have clearer answers to the most pressing questions we face: Will sequestration happen or not? And if so, what will it look like?

As we went to press, the post-election dance was just beginning. Optimism appeared to be more common than pessimism, but solutions and “deals” remained elusive.

But sequestration is just one force that could impact our market, albeit a significant one. Whether it occurs or not, there can be little doubt that the federal market for professional and technology services faces both continued fiscal challenges and likely changes to its character and structure.

As we’ve noted in previous editions of the magazine, government buying behaviors (including the current default to lowest price technically acceptable acquisitions and growing margin pressures), mission requirements, and more could together drive significant competitive and structural change in this market. With that in mind, we’ve focused much of this issue on that core question.

Among our feature articles is one written by David Scruggs and Jeff Roncka of PSC member firm Renaissance Strategic Advisors. In it, they lay out their perspectives on how executives can build their strategic plan in this uncertain market.

In our Sounding Board feature, two members of PSC’s Board of Directors—Dave Zolet of CSC and George Schindler of CGI—share their perspectives on how the competitiveness of the international and commercial markets are impacting the federal sector. And for a customer perspective, OFPP Administrator Joe Jordan shares his views on the primary challenges and opportunities he sees in federal acquisition.

4 / Service Contractor / December 2012

We are also pleased to present three in depth stories from three subject matter experts. Taylor Boon of The Boon Group offers critical perspectives on the impacts of the Affordable Care Act on companies with Service Contract Act covered employees. Todd Overman of Hogan Lovells explores the growing trend toward asset deals in federal contractor mergers and acquisitions and the need for novation reform. And our own Alan Chvotkin offers an in-depth look at the substance and impacts of key audit provisions contained in the National Defense Authorization Act now pending before Congress.

This a market constantly buffeted by winds from many directions. Rarely have those winds been so strong or unpredictable. Our goal is to help keep you apprised of their direction and impacts as you seek to navigate your way forward.

We hope this issue, like others, helps us achieve that goal, and you yours.

Thanks, as always, for your support.

Stan Soloway President & CEO

Professional Services Council

Professional Services Council

Service Contractor / December 2012 / 5

6 / Service Contractor / December 2012

Professional Services Council

SOUNDING BOARD:

In each issue, PSC asks members of our board of directors to offer their perspectives on key challenges facing the government services industry.

Dynamics of today’s Competitive Markets QUESTION: How have the dynamics of today’s international commercial or public sector markets for professional and technology services impacted the competitiveness, strategic value, human capital access, and other aspects of the U.S. federal market?

A

cross international market sectors, uncertainty is the watchword of the day. This uncertainty is present in many of the institutions and ecosystems we rely on to help predict what’s next which is shifting how industry operates and positions for the future. Nowhere is this more evident than in the United States. So, as industry leaders, we sit at a strategic crossroads: Should we focus on surviving the short-term headwinds so we can “live to fight another day” or should we use this confluence of change to reaffirm who we are and what we deliver to our clients and employees? At CGI, we have cast our vote on the latter approach.

George Schindler President, CGI U.S., CGI Group, Inc.

Increased competition requires renewed balance and focus

Budget pressures and market uncertainty have further fueled competition in the already highly competitive technology and professional services sector. To succeed, companies must be relevant and profitable. As a result, the pace of consolidation and portfolio diversification has increased. Many firms are re-working their strategies to diversify away from a governmentonly focus and more into commercial markets—or away from a North America-only focus and more into international markets. The key is to strike the right balance by looking at the holistic portfolio and determining ways to leverage what you have (or acquire) across markets and geographies. No one market is a sure thing, so instead of overdeveloping any one area, look continued on page 18

T

David Zolet

Executive Vice President & General Manager, North American Public Sector, CSC

he public sector market is in the midst of a global technology storm that shows no signs of slowing down. The storm is the collision of events driven by shifts in the way technology and innovation are delivered, the “bring your own device (BYOD) to work” trend and ongoing budget and political issues affecting federal government agencies. Professional and technology services companies are taking notice and adapting quickly to these shifts.

Business as usual will no longer work for professional services companies in the public, commercial or international markets. The days of the federal government hiring professional service providers and system integrators to build custom-tailored technology solutions are rapidly disappearing. Recognizing this fact is the first step in adapting to the new world in which we live.

Buying traditional technology expertise on a per-unit manpower basis also is becoming a decreasing segment of the marketplace. Instead, core technology and application capabilities are being delivered as usage-based services from the cloud to any type of device.

In other words, companies want to buy desired outcomes delivered on an “as-a-service” basis. They don’t want to buy expertise in the technology arena. New applications are delivered today as services, no longer packaged for experts to modify and install. Furthermore, leading software vendors are beginning to offer application solutions, from e-mail services to human resource solutions, as cloud-based service offerings rather than traditional software packages to be installed on machines. continued on page 18

Professional Services Council

Service Contractor / December 2012 / 7

Service Contractor (SC): What are the most critical challenges facing OFPP and the federal acquisition community?

Joe Jordan (JJ): I think the most important thing for our federal acquisition community is to double-down on our successful efforts to help agencies buy smarter. We have myriad challenges due to the difficult fiscal times, the complexity of our agency missions, and the aging of our acquisition workforce. There are ample opportunities to address these issues by continuing the good work we have done around strategic sourcing; arming agencies with increased data for their decision making; ensuring that acquisition, program, finance, and IT offices work together in planning and managing contracts; buying only from responsible parties; and developing our acquisition workforce.

SC: What is the key to building the kind of collaborative environment we all agree is important but remains so elusive?

SC: What more can industry do to help their customers navigate increasingly austere times?

JJ: For us to be successful in providing

America’s taxpayers with the highest quality goods and services, we must develop collaborative solutions that benefit all of our acquisition stakeholders. Companies should proactively look for innovative solutions to agency challenges and help us develop ways to drive down costs in smart and manageable ways. OFPP has also issued two “Mythbusters” guidance documents to help industry and government work more closely together during the requirements development phase so we can get smarter about the market and so that vendors can help us shape an acquisition strategy that makes sense.

JJ: I believe that this collaborative

environment we all desire can be built over time. Like any great relationship, it means developing trust between the parties. This will require agencies to adopt more innovative contracting practices and to use thoughtful decision-making as a compliment to the FAR regulations. It will also require industry to understand the unique needs of their federal agency customers and not just lament the differences between selling to the commercial and government sectors. And, most importantly, it will require all parties to view this not as a zero-sum game, but rather as an opportunity to share increased value among all stakeholders so we can make a meaningful improvement to our acquisition system and deliver the best value to America’s taxpayers.

Q&A with Joseph Jordan Administrator of Federal Procurement Policy 8 / Service Contractor / December 2012

Professional Services Council

EMCOR IS RESPONSIBLE FOR MUCH OF THE HOT AIR CIRCULATING AROUND WASHINGTON THESE DAYS.

EMCOR Government Services (EGS) performs the critical design, installation, repair, replacement, inspection and maintenance of essential steam tunnel systems throughout Washington, D.C. Miles of tunnels transport ultra-efficient steam heat from central heating plants to facilities ranging from government courthouses to the Washington Monument.

Our expertise with tunnels, vaults, manholes and sumps ensures that millions remain comfortably in hot water.

EMCOR PROVIDES CRITICAL SYSTEMS FOR: GOVERNMENT | WATER | ENERGY | TRANSPORTATION | TECHNOLOGY | HEALTHCARE | EDUCATION |

How can we be there for you?

866.890.7794 emcor_info@emcor.net www.emcorgroup.com Professional Services Council

continued on page 10 Service Contractor / September 2012 / 9

The “Gameboard� and Strategic Planning in the Federal Services Market

by David Scruggs and Jeff Roncka Renaissance Strategic Advisors

10 / Service Contractor / December 2012

Professional Services Council

T

he $300 billion U.S. government services market is incredibly diverse. After a decade of growth, the government’s efforts to reduce discretionary spending are shifting the business landscape and significantly intensifying competition. Companies need more than just greater focus and better execution to survive. Identifying and pursuing favorable opportunities mapped to current offerings is no longer a valid strategy.

Instead, company management needs to completely rethink how the enterprise does business and generates value.

Our review of the nature of supply and demand reveals that considerable insight can be derived from a new way of looking at the market and a company’s position in it. Specifically, contractor business models should be driven by the dynamics resident at the intersection of the type of service being bought and the customer’s preferred delivery model.

A New Way of Thinking About the Market is Needed

The most common way to segment the vast federal services market is by the different types of services that customers buy. This answers the “what” question for planners. Since the federal government organizes contract obligations by product service codes and procuring agency, it is relatively

straightforward to identify spending patterns over time and to make projections accordingly. However, this type of information alone is not sufficient to develop an effective strategy.

Thus, it is critical to use a second segmentation to reveal “how” the customer wants to procure each type of service.

The answer to this question will dictate the business model that is most appropriate to succeed in each specific area.

We have observed four basic service delivery models in the federal services market: 1) Managed Labor, 2) Consulting, 3) Integration and Implementation, and 4) Solutions.

As described in Figure 1, each delivery model has distinct characteristics. A service delivery model has a unique combination of labor mix, reliance on and ownership of

Figure 1: Service Delivery Models Managed Labor

Consulting

• Contractor sources and • Contractor cultivates manages skilled technical, knowledge base and functional or managerial processes and delivers labor recommendations, software or system • Typically staff augmentaconcepts tion role for government customer • Project focused armslength delivery of discrete • Used for well-understood, IP-based content and repeatable and discrete advice tasks • Used to provide new ideas and information

Integration & Implementation

Solutions

• Contractor provides engineering and integration necessary to operationalize a system or architecture

• Contractor provides the IP, assets and financial resources to deliver an integrated solution to a need

• Project focused armslength delivery of a functional capability

• Arms-length design, implementation and operation of full outsourcing solution

• Used to provide a new capability or a service for the government

• Used to provide a full scope capability or service, typically via fee for performance

Business Model Characteristics Lower Higher Lower Lower Lower Professional Services Council

Capital / Asset Intensity Susceptibility to Pricing Pressure Degree of Contractor Risk Expected Financial Return Barriers to Entry

Higher Lower Higher Higher Higher Service Contractor / December 2012 / 11

Figure 2: The RSAdvisors Gameboard Type of Service Delivery Model

Managed Labor

Consulting

Integration & Implementation

Solutions

Type of Service Demand

Segment “A” Segment “B” Segment “C” Segment “D”

Strategic planning insights exist at the nexus of “what?” & “how?”

Segment “E” Segment “F”

intellectual property, expected risk and return, and relationship between the government and contractor.

This integration of the two lenses through which to view the federal services market—the “what” and the “how” —results in the “Gameboard” framework illustrated in Figure 2. Each cell on the resulting matrix represents a specific and discrete “micro” market segment that may require a distinct business model. While certainly there is overlap between micro segments, experience demonstrates that it is difficult to optimize a large number simultaneously within a single organization or company.

Management Needs to Rethink Strategies Now

The federal services industry is at a turning point. Since 2001, many suppliers successfully followed the strategy of “catch the wave” that generated significant, but often disparate, growth.

Important trends and rising business model incongruities were masked by the ever increasing federal spending. Now that the market topline has turned downward, executives must take a serious look at their portfolios to see how they can win in a budget con-

strained market. This is especially true since both the what (i.e., the types of services) and the how (i.e., the service delivery models) are also changing.

Some service sectors are experiencing more rapid shifts in delivery models than others. For example, the four primary forces driving the federal IT sector today—cyber security, cloud computing, mobility and big data analytics—all are making customers reevaluate how they buy IT as well as what IT they buy. “Buying by the drink” —or paying for what is used— instead of buying whole systems, has an enormous impact on how suppliers manage assets, talent, pricing and contracts structures.

Similarly, the logistics, equipment support, infrastructure, and mission services sectors also are undergoing rapid business model changes. In some instances, pricing pressure and contract policy is making it difficult to supply managed labor for higher overhead diversified companies. In others, the customer’s preference for an integrated solution is driving an increase in performance-based contract structures and public-private partnerships.

Finally, getting an organization to recognize the need to adopt new busi-

12 / Service Contractor / December 2012

ness models is never easy. A reluctance to abandon existing practices that worked in the past is common. Also, inconsistent signals from customers and sunk costs in technology and key staff are other reasons why organizations frequently resist change.

It is because of factors like these that a new and higher fidelity market diagnostic framework like the “Gameboard” is especially helpful in driving consensus regarding the need for repositioning. A robust and inclusive strategic planning process relying on a common taxonomy can help combat the classic innovator’s dilemma that leads companies to miss opportunities to recognize and prepare for future market cycles.

Surviving, Creating Value and Positioning for the Next Upcycle

Companies need insight and strong leadership to make the right decisions during difficult times. The “Gameboard” and the analytical processes needed to generate it are helping management teams make better investment and corporate restructuring choices.

Hunkering down and trying to ride out the storm is not a winning strategy.

It typically leads to a compromised market position, a loss of key talent and questions from shareholders.

On the other hand, a clear focus on the lines of business, customers and delivery models that maximize value creation will generate a thoughtful portfolio review and lead to effective portfolio restructuring.

SAIC’s decision to separate into two new companies organized around different business models on the “Gameboard” is a recent illustration of the type of restructuring that will become commonplace. Failure to be proactive and apply fresh strategic thinking is a recipe for market failure during this budget downcycle. Our message is a simple one: Act now or cede the advantage to your competitor. 3

Professional Services Council

Is it Time to Revisit the

FAR’s Novation Process?

by Todd R. Overman Hogan Lovells

I

t has been 15 years since the novation process outlined in the Federal Acquisition Regulation (FAR) was last revised.1 Those revisions were prompted by the American Bar Association Public Contract Law Section’s 1995 request that the government ease novation requirements, and came at a time of increasing consolidation within the defense industry. The last several years have seen a continued trend of mergers and acquisitions involving government contractors, in many cases, increasing the need to novate contracts, or change the name of contractors in connection with an acquisition.

Many contractors now view the FAR’s novation process as a costly regulatory burden, which takes too long and imposes unnecessary requirements. In addition, contractors often cannot predict what will be required of them because the uniformity the FAR envisions is jettisoned by agencies and contracting officers who impose demands not specified in the FAR or in any publicly available agency guidance. Thus, perhaps the time has come again to revisit the FAR’s novation process.

I. The Current Novation Process

The Anti-Assignment Act prohibits

a contractor from transferring government contracts to a third party.2 Nonetheless, the government may consent to the transfer of government contracts from a contractor to a successor-in-interest when it is in the government’s interest and when all assets necessary to perform the contract have transferred to the third party. When a contractor wants the government to recognize a successorin-interest, the contractor must

submit a written novation request to the responsible contracting officer in accordance with the procedures in FAR Subpart 42.12 and by supplying the extensive set of documents specified in the FAR. The FAR also permits the “responsible contracting officer” reviewing the novation package to request any other relevant information to assist in their evaluation of the request. FAR 42.1202 identifies the standards for determining how to continued on page 15

1 2

See 62 Fed. Reg. 64,934 (Dec. 9, 1997).

41 U.S.C. § 15.

Professional Services Council

Service Contractor / December 2012 / 13

Wyle Tackles the Tough Jobs

Wyle’s team of engineers, scientists and flight crew tackle the tough jobs, such as completing the first airborne refueling of the Joint Strike Fighter F-35B short takeoff/vertical landing variant.

With 16 years of dedicated support for the JSF program, Wyle provides engineering and program management support; foreign military sales management; flight test support; threat reprogramming, analysis and assessments; and basing and ship suitability services. For more information, go to www.wyle.com

14 / Service Contractor / December 2012

Experts for the 21st Century

Professional Services Council

from page 13

identify the “responsible contracting officer (CO),” who is the government official authorized to process and execute novation agreements. FAR 42.1203 then specifies the responsible CO’s duties in processing novation agreements.

Until the government novates a contract, the original contractor remains obligated to the government for performance and the contract may be terminated for default if the original contractor does not perform.3 Thus, the original contractor must rely upon the transferee’s performance to ensure the contractual obligations are met until the novation agreement is executed.

II. Flaws in the Current Novation Process and Recommendations for Reform A. Undisclosed and Unnecessary Documentation Requirements.

Agencies often demand more than the FAR requires prior to novating contracts. One of the noncontroversial changes adopted in 1997 was a revision to the paperwork requirements. The FAR previously required the CO to obtain eight categories of documents that are not generally available until the transaction closes before the successor contractor could be recognized and the novation agree-

Agencies often

demand more than the FAR requires prior to novating contracts.

ment executed. The final rule altered this requirement by providing that, in order for the successor to be recognized, the contractor need only submit a description of the transaction, a list of affected contracts between the transferor and the government, evidence of the transferee’s capability to perform, and any other information deemed relevant.4 Other documents are to be provided “as [they] become available.”5 However, in practice, the government will not begin to review a novation request until all documents identified in the FAR have been provided, and, in some cases, has rejected a novation request if just one of the documents is missing.

In addition, in certain situations, government agencies may require the buyer’s parent company to guarantee performance of the transferring

contracts, even though the buyer guarantees performance in the novation agreement itself. Similarly, when a business converts from a corporation to a limited liability company (LLC), agencies have demanded a novation agreement even though a name change agreement should suffice. Likewise, agencies have demanded documents with original signatures and rejected novation requests when documents are countersigned, even though electronic signatures and countersigned documents are commonplace in the commercial market. These undisclosed requirements are problematic because contractors cannot predict what will be required of them to successfully novate contracts, especially when the demands can vary by agency and by contracting officer.

To provide increased transparency and predictability to the novation process, agencies should be willing to process novation requests upon the submission of documents listed in 42.1204(e). If other documents are or become available, contractors should provide them, or if there is other information necessary to process the request, agencies should immediately request that information. Similarly, every novation requirements should be specified in the FAR. Any added requirements an agency wants to impose should require a notice and continued on page 16

FAR 42.1204(c).

4 42.1204(e).

5 42.1204(f ).

3

Learn more @

triplecanopy.com Professional Services Council

Service Contractor / December 2012 / 15

from page 15

comment process or at least be publicly available. To the extent agencies are encountering transactions, such as corporate conversions, that do not fit squarely within the existing regulatory process, they should consider providing written guidance to contractors on what will be expected of them to recognize the successor entity. Under the current system of approving novations after the transfer has occurred, each of these steps will facilitate the agency’s review and accelerate timely novation execution.

B. Decentralizing of the Novation Process.

The FAR centralizes the novation process by making the administrative contracting officer (ACO) or the CO with the largest unsettled balance of contracts the single responsible official for processing and executing all of the novation(s) and subsequently modifying all of the affected contracts. Yet contractors routinely confront federal agencies and COs who want to individually novate contracts. For instance, it is common practice for GSA

Contractors are sometimes given

differing or inconsistent

directions about how to manage novation requests, thereby increasing the cost and frustration. to require that it be the responsible agency to novate all GSA Federal Supply Schedule contracts. However, for contractors holding multiple Schedules, the General Services Administration Acquisition Manual (GSAM) does not provide any guidance as to which GSA contracting officer will be responsible for processing a novation request. Moreover, contrary to the explicit provisions in the FAR, the

Growth. Strength. Stability.

GSAM states that contracting officers should process a novation request once a “complete package” is received.

This decentralizing of the novation process is problematic for two primary reasons. First, agencies vary in the requirements they impose and the length of time it takes them to novate contracts. This not only creates uncertainty for contractors, but in situations where one agency approves a novation request before the other, the government is sending an inconsistent message on who the contractor of record is for the transferred assets.

Second, agencies and COs vary in their familiarity with the novation process and associated requirements.

Accordingly, contractors are sometimes given differing or inconsistent directions about how to manage novation requests, thereby increasing the cost and frustration associated with the novation process to both agencies and contractors.

Novations should be handled in a uniform manner by agency officials with expertise in the novation process.

Officials from DCMA, GSA, and other federal agencies should create a no-

FCE Benefit Administrators, Inc., the industry leader in fringe-benefit design, compliance, and administration, enables employers to fulfill their fringe obligation by funding a trust for employee benefits.

FCE is a full-service third-party administrator (TPA) with more than 25 years experience in this regulatory niche. Whether the preferred approach is selffunding or fully insuring, FCE’s in-house actuarial expertise helps hundreds of government contractors achieve fringe compliance, reduce payroll taxes, and promote employee welfare, all without funding beyond the fringe obligation.

Questions? Contact Gary Beckman, President/CEO, at (800) 899-0306 or beckman@fcebenefit.com www.fcebenefits .com

FCE Benefits 887 Mitten Road Burlingame, California 94010-1303 800.899.0306 • 650.341.7432 fax corpoffice@fcebenefit.com 16 / Service Contractor / December 2012

Professional Services Council

vation working group, with industry input, to address how to most effectively and efficiently process novation requests. One possible solution could be to supplement FAR 42.1202 with more specific instructions as to which agencies are responsible for handling novation requests of specific types of contracts. For instance, there should be more transparency as to the role of GSA vs. DCMA and which contracts and associated orders each agency has authority over. Similarly, there should be more explicit instructions for how contractors should approach agencies with unique authority over contracting matters (e.g., FAA).

C. Timeline for Novation Execution.

In 1995, the FAR Council was informed about the lengthy period of time to complete the novation process. Seventeen years later, the problem persists and perhaps has been exacerbated with the volume of novation requests and limited government resources. Contractors may wait a year, two years, or even longer to have contracts novated. And because the FAR requires contractors to submit post-transfer documents evidencing the transfer of assets, most contractors wait until after the transaction closes before submitting a novation request and government officials are reluctant to approve a novation until most, if not all, of those documents are provided. This creates uncertainty and

To eliminate the business uncertainty and potential administrative headaches, the novation decision-making process should be

time-limited.

complexity after the assets are transferred, but before the government approves a novation. As a result, a seller and buyer often execute a subcontract pending novation so that the buyer can perform the contracts and get paid for the work until the contracts are novated. These interim arrangements often drag on for years and can create confusion for government customers.

To eliminate the business uncertainty and potential administrative headaches, the novation decision-making process should be time-limited.

One potential solution would be to supplement the existing process with an express commitment by the responsible contracting officer to complete the novation review within 75 days of submission of all available information by the transferor and transferee. The Committee on Foreign Investment in the United States (CFIUS) process could serve as a useful model, in

which the government has 30 days to review an acquisition that could result in foreign control of a company doing business in the U.S., with an added 45-day review period if needed. In the context of an acquisition requiring a novation, a contractor could file a novation request upon signing the asset purchase agreement and build the time for novation review into the overall closing process which routinely includes gathering other material consents, and potentially other regulatory requirements, such as anti-trust clearance. The responsible contracting officer could ask for additional information within the initial 30 days, and if necessary, extend to an additional review period, to coordinate with other agencies or confirm that all assets necessary to perform the contracts will be transferred to the transferee upon the closing of the transaction.

Once approved, the transaction would close and the parties would execute the novation agreement. There are certainly other models to consider, but the original concern regarding the need for “prompt review� remains an issue, and alternatives should be explored to provide a more concrete approval timeline.

Todd R. Overman is a partner in the Government Contracts Practice Group at Hogan Lovells US LLP, whose practice includes advising on mergers and acquisitions in the aerospace, defense and government services industries.

Learn more @

triplecanopy.com Professional Services Council

Service Contractor / December 2012 / 17

George Schindler

continued from pg. 7

for ways to strengthen the core business while expanding who you serve and what you deliver.

CGI has traditionally had a diverse portfolio and it has served us well in times of strength and when any given industry or geography is facing challenges. It has enabled us to adjust investments and retain resources, ensuring we are able to continue to innovate and deliver value to all our clients at the times they need us most.

Two years ago, we added capabilities and scale to our U.S. business with an acquisition in the defense and intelligence federal government market. We continue to achieve organic growth and high client satisfaction ratings in this business and we are doing more cross-selling between government and commercial markets.

This is especially true for in-demand solutions like cybersecurity, cloud computing, healthcare, and identity management.

For example, the identity management intellectual property (IP) we developed for

David Zolet

As a services company, people are our primary asset and the competition for talent remains tough. As companies re-assess their portfolio and business model in these uncertain times, most are also re-focusing on talent. Now is the time to ensure the right talent, with the right skills, is in the right place. Re-investing in areas like em-

ployee service and leadership development is critical to engaging and retaining talent.

By equipping employees with the tools and skills they need, the value proposition for employees and clients will be stronger and employees will be better able to take advantage of opportunities across the company.

CGI recently entered its next phase of expansion and growth with the $2.7 billion acquisition of a major European IT provider. While government remains CGI’s single largest industry sector, we have re-balanced our portfolio again to take advantage of globalization trends among our clients, an expanded footprint to best serve clients, and the addition of significant new and complementary capabilities.

As we move through this latest market cycle, we foresee continued consolidation, resulting in a handful of truly global companies in the technology and professional services market. CGI is committed to be one of them. 3

In a world in which changing end-user devices and new applications emerge at exponential rates, the as-a-service approach offers the federal government the most cost-effective way to transform their enterprise.

But purchasing technology capabilities as-a-service is a radical departure from acquiring and managing professional and technology expertise. The immediate challenge lies in changing the way the government procures professional and technology services. Shifting from a per-hour paradigm to an as-a-service paradigm is a difficult transition for the current federal procurement professionals and even the acquisition process. Simply, federal agencies interested in acquiring technology asa-service will require different skill sets and different purchasing templates than exist today, with little time to fill these gaps. For example, in many instances, contracting officers continue to want a detailed cost

build-up of a service offering rather than a per-usage-based fee.

The technology business as we’ve known it no longer exists. The market and competitive landscapes have changed drastically. CSC and our competitors have to play smarter and stronger if we want to not only survive but thrive in this crowded market. And this is exactly what CSC intends to do.

CSC helps government agencies solve their toughest challenges—through our services, solutions and offerings—so American citizens can solve theirs. We put ourselves in our clients’ shoes, helping them meet their budgetary and mission goals with innovative solutions that provide savings and improve productivity.

Clients often remember vendors who are by their side during the good as well as difficult times. CSC aspires to be the vendor with whom our clients choose to work time and again. 3

military purposes is now being delivered to one of the largest commercial security companies in North America.

As companies position for success in this challenging federal market, they are also looking for ways to refresh their business models. This includes restructuring operations; re-examining partnerships to develop new teaming opportunities; creating flexible and creative contracting options like performance-based and share-in-savings approaches; and establishing onshore delivery service centers to gain access to untapped talent.

Talented people will choose the strongest companies

continued from pg. 7

In the future, customers will incorporate new cloud services into existing IT infrastructures, lessening the need to buy specific expertise. Although the technology expertise is still embedded in the as-aservice offering, it’s no longer purchased as increments of manpower. The time-honored approach of quoting a project that takes dozens of people to design, develop, deploy and operate is over.

For federal agencies, improvements in technology, the BYOD shift and current budget environment are driving federal agencies more readily to embrace innovation.

In particular, the as-a-service approach allows the federal government to implement next-generation solutions without the risk of deploying new technology that may or may not work. Although the experts behind the as-a-service solution may no longer be directly visible to federal agencies, the results of their efforts will be.

18 / Service Contractor / December 2012

Professional Services Council

Balancing SCA with Employer Mandates

Under Healthcare Reform

by Taylor Boon Regional Sales Director, The Boon Group

W

ith 2013 at our doorstep, I am increasingly asked one question by PSC member companies and others: “How will healthcare reform affect my business?” The answer is not an easy one and is different for each contractor. At more than 350,000 words, healthcare reform, also known as the Affordable Care Act (ACA), PPACA or ObamaCare, is complicated, complex, and confusing. This is especially true in evaluating how government contractors performing work covered by the Service Contract Act (SCA) will be affected by the ACA’s new employer mandates. Yet with the right education

and preparation, the transition to ACA compliance can be a smooth one.

Contractors typically choose one of two avenues in anticipation of healthcare reform. The first is the “wait-andsee” approach taken by contractors that believe the healthcare reform requirements will change significantly before the implementation of its final regulations in the contractor’s first plan year following January 1, 2014. These contractors plan to hold off until late 2013 to make the necessary changes to their company’s benefits, waiting to see exactly what will be required at that point. Alternatively, contractors

that believe the law is here to stay as is will choose to work toward becoming compliant with the ACA sooner rather than later. These contractors are typically larger employers who want to be certain they are both compliant with health care reform and competitive under the Service Contract Act. To know how healthcare reform affects businesses, we must first understand how contractors satisfy their fringe benefits obligations under the Service Contract Act. Contractors who offer benefit plans provide full benefits, hourly based plans, or limited-medical plans. Some contractors exclude their

Learn more @

triplecanopy.com Professional Services Council

Service Contractor / December 2012 / 19

SCA employees from benefits altogether or choose to pay the health and welfare fringe to the SCA employees in cash in lieu of benefits. Regardless of how they are currently fulfilling the requirement, companies must decide what they need to do to become compliant with the ACA. This may prove challenging due to the manner in which the Service Contract Act interacts with the ACA. A closer look at both laws is required to properly structure a compliant program.

Of course, each contractor’s situation is unique and the following is simply a general overview of the ACA’s employer mandate applicable to service contractors.

As of publication, the ACA will require most employers (including contractors) with more than 50 full-time employees to offer essential health benefits to employees and their dependents, and subsequently pay a specific portion of employee health benefit premiums. If the employer does not do both, the employer will pay a penalty in the form of an excise tax if even one full-time employee receives federal assistance, in the form of a subsidy, to purchase health coverage on an exchange established by the states to provide affordable coverage. Each employer/contractor must also provide their employees an affordable healthcare plan. An affordable plan is one in which the required contribution for self-only coverage does not exceed 9.5 percent of the taxpayer’s household income. Thus,

20 / Service Contractor / December 2012

employers who choose to pay less than 100 percent of the cost of an employee’s insurance will be required to prove that the employer’s share of the health insurance premium meets these government guidelines. Failure to meet these guidelines could result in penalties of up to $3,000 per employee per year.

There is no requirement under the ACA to provide ancillary benefits coverage such as life or disability insurance. The employer is required only to provide health coverage.

The silver lining for SCA contractors (as opposed to other employers) is that providing employees fringe dollars is already built into these contracts and therefore at their disposal for use in providing a compliant health care plan. Although some employers will strip back their ancillary benefits coverage to provide essential health benefits with fringe dollars, others will find that action to be unnecessary. The goal of every SCA-covered contractor should be to use the fringe benefit dollars already required to first cover the cost of their affordable healthcare coverage as required under the ACA, and then work to fit in ancillary benefits after that.

A good rule for assessing the amount available for an affordable plan is to assume 30 hours per week, or 120 hours per month, per employee. For example, at $3.71 in fringe benefits under SCA, a company would have $445.20 per month to cover health benefits for one employee and his dependents. But keep in mind that medical inflation seems to outpace the annual health and welfare rate increase, so it may be wise to be conservative in your estimates.

The ACA mainly pertains to existing employees who work an average of at least 30 hours per week, or for new employees who are expected to work an average of at least 30 hours per week. Seasonal or temporary employees could be subject to the ACA depending on a contractor’s specific eligibility calculation period. Calculations must be done to determine whether benefits are owed to an employee based on the hours worked. Because of this, contractors with both full- and part-time employees should start classifying these populations separately, if they are not doing so already. Many contractors simply label these employees as “non-exempt” or “SCA-covered” but don’t track their full-time/part-time status. Tracking their work-hour status now will make the transition to the ACA easier in 2014, as well as help with projecting costs.

There are many other components of ACA, none of which have been finalized, that are of interest to contractors. One key anticipated regulation will address discrimination between management and non-management health plans. Depending on the specifics of the rule, this could be an issue for many government contractors. In addition, contractors with two health plans or who offer an inferior health benefit package to their SCA employees, could be subject to penalties should they continue these practices unchanged. For most SCA contractors, the smart play is to design either a single health plan for all employees or separate plans that favor their hourly Professional Services Council

SCA employees. Structuring a plan that either provides richer benefits and/or employer cost shares for SCA (typically your rank-and-file) employees should position a contractor well for the implementation of and compliance with the ACA. Service contractors paying health and welfare dollars will also need to take a closer look at their policies. Many contractors satisfy their SCA fringe obligations by giving employees the choice between receiving cash or benefits. They typically use traditional major medical style programs and allow their employees to also elect coverage. These contractors are certainly compliant with the current SCA requirements because they provide and account for fringe dollars, but with the ACA employer mandate on the horizon, consideration must be made as to how health and welfare fringe dollars will be treated for ACA compliance.

This is where things could get even trickier with healthcare reform. Are the fringe benefits provided under the SCA “employee” dollars or “employer” dollars in the eyes of the IRS? It depends on whether employees have a choice between cash and benefits. The general rule is that if an employee is given a choice between cash and benefits, then the fringe is viewed as additional wages and the benefit elections are treated as payroll deductions and thus generally would be considered employee dollars because the employee was given constructive

receipt of those dollars and chose either cash or benefits. In this case, the company could face significant penalties for not providing the appropriate cost shares and minimum essential coverage. Conversely, in cases where employers spend the fringe on a bona fide benefit program in which the employee has no option to receive cash, those benefits are typically viewed as employer-provided dollars. This is a key distinction, and is especially important under the ACA as the contractor has a responsibility to either provide affordable coverage or face the penalties As we progress through 2013, there is little doubt that health care reform will continue to move forward and ultimately be implemented in some capacity and that there will be further regulations issued to implement the ACA. Service contractors who are prepared and taking action now will be ahead of the curve come the end of 2013. Those who choose to forgo early planning may be left with difficulty finding and implementing a compliant program in time. Late 2013 will be a challenging and busy time for benefit providers, carriers, and brokers. I recommend that every contractor who anticipates having an SCA-covered contract take a good look at their situation now rather than later and start working with the appropriate parties to develop their own plan to stay competitive and in compliance. 3

Connecting Health and Wealth Solutions.

• Administrative — compliance and administrative services for SCA, DBA, Living Wage and Prevailing Wage Contracts, ERISA and The Affordable Care Act • MedPremier — the first ever fully insured hourly cost major medical plan built specific to your fringe rate • Healthy Achievers — a URAC Core accredited company offering worksite wellness programs that provide health and risk assessments, biometric screenings and immunizations • Retirement Solutions — qualified retirement plans through a registered investment advisor w w w. b o o n g r o u p. c o m 866-831-0847 Professional Services Council

Service Contractor / December 2012 / 21

• Co A Li W P

• Fu P D R

Celebrate!!!

Anniversary celebrations are a time to honor those who have made great contributions to the association and this industry.

PSC’s highest honor is the Krueger Medal, named in honor of PSC’s first chairman and a founding member, Robert Krueger.

at 25‌

Robert Krueger receives an award at the 25th Anniversary Gala in 1997.

22 / Service Contractor / December 2012

Professional Services Council

Earle Williams (right) receives the first Krueger Medal from then-Chairman Joe Kampf (left) at the 30th Anniversary Gala in 2003.

at 30‌ Phil Odeen (left) receives the Krueger Medal from then-Chairman Jim O’Neill (right)at the 35th Anniversary Gala in 2007.

Professional Services Council

Service Contractor / December 2012 / 23

Chairman Paul Cofoni of CACI makes a farewell statement to the PSC members at the 40th Anniversary Celebration.

John Toups receives the Krueger Medal from new PSC Chairman John Hillen (left) and PSC President and CEO Stan Soloway (right) at the 40th Anniversary Celebration.

…and at 40!

24 / Service Contractor / December 2012

Professional Services Council

Hillen hands Cofoni a “past chairman� ribbon and a gift thanking him for his service to PSC.

Professional Services Council

Service Contractor / December 2012 / 25

1

The

PSC Annual Conference‌

4 1 Ann Terry of DHS (left), Nancy Gunderson of HHS, Brett Lambert of DoD, Mary Davie of GSA, and moderator Jim Jaska of AECOM (right), listen to a question from the audience during the procurement policy leadership panel at the 2012 PSC Annual Conference.

2

3 5

2 Philip Mudd, the former deputy director of the CIA Counterterrorism Center, delivers the closing keynote address about global security at the 2012 PSC Annual Conference.

3 Jerry Howe of TASC (right) talks about game changing compliance and legal developments during a session at the 2012 PSC Annual Conference.

Joining him on the panel were Mark Danisewicz of American Systems (seated left) and Robert Toth of ICF (center). The moderator was Tony Fuller of BakerTilly (standing).

4 At the 2012 PSC Annual Conference, former Tennessee Governor Phil Bredesen, a member of the steering committee for the Committee to Fix the Debt, discusses the tough choices facing the United States.

5 Nearly 600 people attended the 2012 PSC Annual Conference at the Greenbrier.

26 / Service Contractor / December 2012

Professional Services Council

6

7

8

10 9

11

12

6Abt Associates’ Kathleen Flanagan (left) moderates a 2012 PSC Annual Conference discussion about shaping the workforce of the future. The panel included Jerry Hultin of the Polytechnic Institute of NYU; Rick Cobb of Challenger, Gray and Christmas; and Erin Moran of Great Place to Work.

8 Robert Zoellick, former president of the World Bank, gives the opening keynote address during the PSC Annual Conference at the Greenbrier on Oct. 1.

7 John Shoraka of the Small Business Administration (center) answers a question during a session on small business policies at the 2012 PSC Annual Conference. Antonio Franco of PilieroMazza (left) and Carol White of the Air Force Small Business Program Office joined him on the panel moderated by Greg Baroni of Attain (right).

10 Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy Brett Lambert answers a question during the 2012 PSC Annual Conference.

Professional Services Council

9 A PSC member asks a question during the 2012 PSC Annual Conference.

11Todd Stottlemyer of Acentia (right) moderates a panel discussion on the meaning of the 2012 elections. The panel featured Jim Bodner of the Cohen Group, Steward Verdery of Monument Policy Group and Kate Eltrich of Sixkiller Consulting.

12 Marta Wilson of Transformation Systems (left) moderates a panel discussing caps on salaries, rates and fees at the 2012 PSC Annual Conference. The panelists were Charles Prow of IBM (right), Ruth Van Sickle of Cubic, and Chris Gilley of DynCorp.

Service Contractor / December 2012 / 27

Profit more.

For 30 years, project-based businesses have relied on Deltek solutions to help them turn their projects into profits.

Find out how at deltek.com/profitmore 800.456.2009

28 / Service Contractor / December 2012

Professional Services Council

Bill Tracker: 112th Congress-Second Session (2012)

Homeland Security Cyber and Physical Infrastructure Protection Act of 2011, Thompson (D-MS)

Summary Seeks to enhance cybersecurity capacity by creating and enforcing performance-based standards.

STATUS Referred to Oversight and Government Reform Committee on 2/8/2011.

H.R. 174

Alaska Native Corporations Contracting Reforms, Thompson (D-MS)

Summary Would eliminate the preferences and special rules for Alaska Native Corporations under the program under section 8(a) of the Small Business Act. STATUS Referred to Natural Resources Committee on 2/14/2011. Related Bill: S. 236.

H.R. 598

H.R. 829

Contracting and Tax Accountability Act of 2011, Chaffetz (R-UT)

Summary Would prohibit the award of contracts in excess of the simplified acquisition threshold unless the

prospective contractor certifies in writing to the awarding agency that the contractor has no seriously delinquent tax debt.

STATUS Reported by Oversight and Government Reform Committee on 4/13/2011.

Stop Taxing American Assistance to Afghanistan Act, Welch (D-VT)

Summary Prohibits U.S. assistance for Afghanistan unless the United States and Afghanistan enter into a

bilateral agreement which provides that work performed in Afghanistan by U.S. contractors is exempt from taxation by the government of Afghanistan.

H.R. 936

STATUS

Referred to Foreign Affairs Committee on 3/29/2011.

H.R. 1163

Patriot Corporations of America Act of 2011, Schakowsky (D-IL)

Summary Would grant a preference to “patriot” corporations in the evaluation of bids or proposals for federal

contracts. Provides a definition of “patriot corporation.”

STATUS Referred to Oversight and Government Reform and Ways and Means Committees on 3/17/2011.

H.R. 1354

American Jobs Matter Act of 2011, Murphy (D-CT)

Summary Would amend titles 10 and 41, United States Code, to allow contracting officers to consider

information regarding domestic employment before awarding a federal contract.

STATUS Referred to Oversight and Government Reform Committee on 4/8/2011. Related Bill: S. 1363.

Freedom From Government Competition Act of 2011, Duncan (R-TN)

H.R. 1474

Summary

STATUS

Would require the government to purchase goods and services from the private sector. Provides exemptions, such as inherently governmental functions. Would require the use of competitive procedures as well as public-private competitive sourcing analysis in accordance with OMB procedures.

Referred to Oversight and Government Reform Committee on 4/27/2011. Related Bill: S. 785.

H.R. 1906

Fairness in Federal Contracting Act of 2011, Cole (R-OK)

Summary Would prohibit executive agencies from requiring the disclosure of political contributions by

an entity submitting an offer for a federal contract.

STATUS Referred to Oversight and Government Reform Committee on 6/20/2011. Related Bills: H.R. 2008, S. 1100.

H.R. 1949

CLEAN-UP Act, Sarbanes (D-MD)

Summary Would significantly broaden the definition of functions that the government must perform under

law and prohibit the government from undertaking A-76 competitions.

STATUS Referred to Oversight and Government Reform Committee on 6/20/11. Related Bill: S. 991.

Professional Services Council

Service Contractor / December 2012 / 29

Bill Tracker: 112th Congress-Second Session (2012) H.R. 2008

Keep Politics Out of Federal Contracting Act of 2011, Issa (R-CA)

Summary Would prohibit inserting politics into the federal acquisition process by prohibiting the submission

of political contribution information as a condition of receiving a federal contract.

STATUS Approved by Oversight and Government Reform Committee on 6/15/2012. Related Bills: H.R. 1906, S. 1100.

H.R. 2146 DATA Act, Issa (R-CA)

Summary Would require broad contractor reporting of federal spending similar to requirements under the

American Recovery and Reinvestment Act. STATUS Passed House on 4/25/2012 by voice vote. Related Bill: S. 3600.

Transparency in Government Act of 2011, Quigley (D-IL)

Summary Would change the Federal Funding Accountability and Transparency Act to require a “look back”

period of 10 years in lieu of the current 5 year period.

STATUS Referred to Judiciary Committee on 8/25/2011.

H.R. 2340

H.R. 2665 Stop Outsourcing Security Act, Schakowsky (D-IL)

Summary

Would phase out the use of private military contractors in the federal government.

STATUS Referred to Armed Services, Foreign Affairs and Intelligence Committees on 7/27/2011. Related Bill: S. 1428.

H.R. 2880

Contingency Operation and Emergency Oversight Act of 2011, Tierney (D-MA)

Summary

STATUS

Would create an Office of the Special Inspector General for Overseas Contingency Operations, headed by a Special Inspector General, to conduct, supervise, and coordinate audits and investigations of the treatment, handling, and expenditure of amounts appropriated for overseas contingency operations.

Referred to Oversight and Government Reform Committee on 10/3/2011.

Summary

STATUS

Would limit the reimbursement amount for compensation paid to employees of government contractors at $200,000, the rate payable for Level I of the Executive Schedule.

Referred to Oversight and Government Reform Committee on 10/3/2011. Related Bills: S. 2198, S. 3254, S. 3301.

H.R. 2980 Stop Excessive Taxpayer Payments to Government Contractors Act of 2011, Tonko (D-NY)

H.R. 3116

Department of Homeland Security Authorization Act of 2012, King (R-NY)

H.R. 3850

Government Efficiency through Small Business Contracting Act, Graves (R-MO)

H.R. 3893

Subcontracting Transparency and Reliability Act of 2012, Mulvaney (R-SC)

Summary Includes several provisions designed to help DHS improve its acquisition planning, management

and oversight.

STATUS Approved by Homeland Security Committee on 10/13/2011. Related Bill: S. 1546.

Summary

STATUS

Would boost the annual governmentwide small business contracting goal from 23 percent—a goal rarely reached—to 25 percent. It would also increase the goal of awarding subcontracted dollars to small businesses from 35.9 percent to 40 percent. To hold top agencies accountable to meeting these goals, the bill would withhold bonuses from senior agency officials when small business goals aren’t met.

Approved by Small Business Committee on 3/7/2012. Related Bill: H.R. 4310.

Summary Seeks to ensure that federal contracting opportunities help legitimate small businesses and gives small contractors a voice when their work is being unfairly insourced.

STATUS Approved by Small Business Committee on 3/7/2012.

30 / Service Contractor / December 2012

Professional Services Council

Bill Tracker: 112th Congress-Second Session (2012) H.R. 3987

Summary

STATUS

H.R. 4081

Summary

STATUS

Small Business Protection Act of 2012, Walsh (R-IL) In response to recent efforts by SBA to create new size standards for deciding what businesses qualify as “small,” this legislation would only allow for the use of “common size standards” where each NAICS code included in the common size standard would have an independently justified size standard equal to the common size standard.

Approved by Small Business Committee on 3/21/2012. Related Bill: H.R. 4310.

Contractor Opportunity Protection Act of 2012, Graves (R-MO) Would redefine various terms related to contract bundling and provide SBA and the private sector with greater ability to protest contract bundling decisions by federal agencies. Also requires significant new steps agencies must undertake and justifications that must be provided prior to issuing a solicitation for bundled contract requirements.

Approved by Small Business Committee on 3/21/2012. Related Bill: H.R. 4310.

H.R. 4117

To prohibit the use of private security contractors and members of the Afghan Public Protection Force to provide security for members of the Armed Forces and military installations and facilities in Afghanistan, and for other purposes, McKeon (R-CA)

Summary

STATUS

H.R. 4118

Summary

STATUS

H.R. 4121

Would prohibit DoD from entering into a contract for the performance of security guard functions at a military installation or facility in Afghanistan at which members deployed to Afghanistan are garrisoned or housed, or employing the Afghan Public Protection Force to provide such security or to perform security guard functions at such a military installation or facility.

Referred to Armed Services Committee on 3/1/2012. Related Bill: H.R. 4310.

Small Business Procurement Improvement Act of 2012, Critz (D-PA) Seeks to encourage greater small business participation in multiple award contracts by requiring agencies to include small businesses in such contracts to the maximum extent practicable. Would also increase the small business reserve to $200,000 and would broaden its applicability to cover multiple award contracts and the federal supply schedule program.

Approved by Small Business Committee on 3/7/2012.

Early Stage Small Business Contracting Act of 2012, Schrader (D-OR)

Summary Would provide authority for agencies to set-aside contracting opportunities for “micro” businesses.

Defines such business as those with less than 15 employees and under $1 million in annual revenue.

STATUS Approved by Small Business Committee on 3/7/2012. Related Bill: H.R. 4310.

Federal Information Security Amendments Act of 2012, Issa (R-CA)

H.R. 4257

Summary

STATUS

Would update the Federal Information Security Management Act to focus information security controls based on automated and continuous monitoring. Such controls would be applicable to certain contractors.

Passed House on 4/26/2012 by voice vote.

H.R. 4259

End Trafficking in Government Contracting Act of 2012, Lankford (R-OK)

Summary

STATUS

Would require federal contractors to take a number of steps to ensure that they or any of their subcontractors do not engage in any trafficking in persons activities. Also would require contractor certification that none of their employees or subcontractors have engaged in any such activities.

Referred to the Foreign Affairs and Judiciary Committees on 3/26/2012. Related Bills: S. 2234, S. 3286, H.R. 4310.

Professional Services Council

Service Contractor / December 2012 / 31

Bill Tracker: 112th Congress-Second Session (2012)

H.R. 4310

Summary

STATUS

National Defense Authorization Act of 2013, McKeon (R-CA) Contains a number of provisions affecting the contracting community including provisions regarding total workforce management, small business contracting, private security contracting, and other areas.

Passed House (299-120) on 5/18/2012. Related Bill: S. 3254.

H.R. 5743 Intelligence Authorization Act for Fiscal Year 2013

Summary

STATUS

Would authorize appropriations for fiscal year 2013 for elements of the intelligence community; would require the development of a strategy and timeline for achieving reciprocity regarding security clearances; and would require DNI to inform the intelligence committees about how contractors are notified of classified contracting opportunities. It would also direct DNI to provide recommendations for how the process of informing contractors about contracting opportunities may be improved.

Passed House (386-28) on 5/31/2012. Related Bill: S. 3454.

H.R. 6278 Data Center Optimization Act, Connolly (D-VA)

Summary

STATUS

Would encourage greater planning and transparency regarding the federal government’s data center consolidation initiative and would require greater detail on cost savings as a result of data center consolidation.

Referred to Oversight and Government Reform Committee on 8/2/2012.

H.R. 6360 Oversight and Accountability in Wartime Contracting Act, Tierney (D-MA)

Summary Limits contract length during a contingency operation and places restrictions on subcontracting.

STATUS Referred to Foreign Affairs, Armed Services, Oversight and Government Reform, and Ways and Means

Committees on 8/7/2012. Related Bill: S. 3286.

S. 21 Cyber Security and American Cyber Competitiveness Act of 2011, Reid (D-NV)

Summary

STATUS

Would secure the United States against cyber attack, enhance American competitiveness and create jobs in the information technology industry, and protect the identities and sensitive information of American citizens and businesses.

Referred to Homeland Security and Governmental Affairs Committee on 1/25/2011.

S. 235

Lieutenant Colonel Dominic ‘Rocky’ Baragona Justice for American Heroes Harmed by

Contractors Act, McCaskill (D-MO)

Summary Would provide personal jurisdiction in causes of action against contractors of the United

States performing contracts abroad with respect to members of the armed forces, civilian employees of the United States, and United States citizen employees of companies performing work for the United States in connection with contractor activities.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 1/31/2011. Related Bill: S. 2234.

S. 236

Alaska Native Corporations Contracting Reforms, McCaskill (D-MO) Summary Would eliminate the preferences and special rules for Alaska Native Corporations under the

program under section 8(a) of the Small Business Act.

STATUS

S. 372

Referred to Small Business and Entrepreneurship Committee on 1/31/2011. Related Bill: H.R. 598.

Cybersecurity and Internet Safety Standards Act, Cardin (D-MD)

Summary Would reduce the ability of terrorists, spies, criminals, and other malicious actors to compromise, disrupt, damage, and destroy computer networks, critical infrastructure, and key resources.

STATUS Referred to Commerce, Science, and Transportation Committee on 2/16/2011.

32 / Service Contractor / December 2012

Professional Services Council

Bill Tracker: 112th Congress-Second Session (2012)

S. 633

Small Business Contracting Fraud Prevention Act of 2011, Snowe (R-ME)

S. 785

Freedom from Government Competition Act, Thune (R-SD)

Summary

STATUS

Would prevent fraud in small business contracting by making improvements to HUBZone and Section 8(a) programs and issuing an annual report in Congress outlining suspension, prosecution and debarment.

Passed Senate on 9/21/2011 by unanimous consent.

Summary Would require the government to purchase goods and services from the private sector. Provides exemptions, such as inherently governmental functions. Would require the use of competitive procedures as well as public-private competitive sourcing analysis in accordance with OMB procedures.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 4/12/2011. Related Bill: H.R. 1474.

Information Technology Investment Management Act of 2011, Carper (D-DE)

Summary Would require executive agency participation in real-time transparency of investment projects

as well as performance and governance reviews of all cost overruns on federal information technology investment project.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 4/12/2011.

S. 801

S. 991 CLEAN UP Act, Mikulski (D-MD)

Summary

STATUS

S. 1100

Would significantly broaden the definition of functions that the government must perform under law and prohibit the government from undertaking A-76 competitions.

Referred to Homeland Security and Governmental Affairs Committee on 5/12/2011. Related Bill: H.R. 1949.

Keeping Politics Out of Federal Contracting Act of 2011, Collins (R-ME)

Summary Would prohibit inserting politics into the federal acquisition process by prohibiting the submission of political contribution information as a condition of receiving a federal contract.

STATUS Approved by Homeland Security and Governmental Affairs Committee on 5/16/2012. Related Bills: H.R.

1906, H.R. 2008.

S. 1145

Civilian Extraterritorial Jurisdiction Act of 2011, Leahy (D-VT)

Summary Would clarify and expand federal criminal jurisdiction over federal contractors and employees outside the United States.

STATUS Approved by the Judiciary Committee on 6/23/2011.

S. 1363 American Jobs Matter Act of 2011, Rockefeller (D-WV)

Summary

STATUS

Would amend titles 10 and 41, United States Code, to allow contracting officers to consider information regarding domestic employment before awarding a federal contract.

Referred to Homeland Security and Governmental Affairs Committee on 7/13/2011. Related Bill: H.R. 1354.

S. 1428

Stop Outsourcing Security Act, Sanders (I-VT)

S. 1546

Department of Homeland Security Authorization Act of 2012, Lieberman (I-CT)

Would phase out the use of private military contractors in the federal government.

STATUS Referred to Armed Services Committee on 7/27/2011. Related Bill: H.R. 2665.

Summary

Summary Includes several provisions designed to help DHS improve its acquisition planning, management and oversight.

STATUS Approved by the Homeland Security and Governmental Affairs Committee on 9/21/2011.

Related Bill: H.R. 3116.

Professional Services Council

Service Contractor / December 2012 / 33

Bill Tracker: 112th Congress-Second Session (2012)

S. 1694

Defense Cost-Type Contracting Reform Act of 2011, McCain (R-AZ)

S. 1736

Acquisition Savings Reform Act of 2011, Brown (R-MA)

Summary Would restrict DoD’s ability to enter into cost-type contracts for the production of major defense

acquisition programs (MDAPs).

STATUS Referred to Armed Services Committee on 10/12/2011. Related Bill: S. 3254.

Summary Seeks to improve agency strategic sourcing, contract close-outs, and increase productivity

improvements and cost efficiencies in services contracts.

STATUS

S. 1747

Referred to Homeland Security and Governmental Affairs Committee on 10/19/2011.

Computer Professionals Update Act, Hagan (D-NC)

Summary Would clarify that certain computer or information technology occupations meet the “professional” exemption under the Fair Labor Standards Act. STATUS Referred to Health, Education, Labor and Pensions Committee on 10/20/2011.

Strengthening and Enhancing Cybersecurity by Using Research Education, Information and Technology Act of 2012, McCain (R-AZ)

S. 2151

Summary Serves as a comprehensive cybersecurity improvement bill that includes provisions on cyber

threat information sharing (including contractor requirements), FISMA reforms, and more.

STATUS Referred to Commerce, Science and Transportation Committee on 3/1/2012.

Commonsense Contractor Compensation Act of 2012, Boxer (D-CA)

Summary Would limit, governmentwide, the amount of reimbursable compensation to employees of

government contractors for a fiscal year to the annual amount paid to the president of the United States.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 3/15/2012. Related Bills: H.R.

2980, S. 3254, S. 3301.

End Trafficking in Government Contracting Act of 2012, Blumenthal (D-CT)

S. 2198

S. 2234

S. 3254

S. 3286

Summary Would require federal contractors to take a number of steps to ensure that they or any of their

subcontractors do not engage in any trafficking in persons activities. Also would require contractor certification that none of their employees or subcontractors have engaged in any such activities.

STATUS Referred to Homeland Security and Governmental Affairs Committee on 3/26/2012. Related Bills: H.R. 4259, H.R. 4310, S. 3286.

National Defense Authorization Act for Fiscal Year 2013, Levin (D-MI)

Summary

STATUS

Summary

STATUS

Contains a number of provisions affecting the contracting community including provisions regarding contractor compensation, contingency contracting, services contracting cuts, and access to internal audits.

Approved by Armed Services Committee on 5/24/2012. Related Bill: H.R. 4310.

Comprehensive Contingency Contracting Reform Act of 2012, McCaskill (D-MO) Seeks to address the recommendations of the Commission on Wartime Contracting. Includes contracting provisions regarding suspension and debarment, and trafficking in persons.

Referred to Homeland Security and Governmental Affairs Committee on 6/12/2012. Related Bills: H.R. 6360, S. 2234.

34 / Service Contractor / December 2012

Professional Services Council

Bill Tracker: 112th Congress-Second Session (2012)

S. 3297

S. 3301

Fiscal Year 2013 Financial Services and General Government Appropriations Act, Durbin (D-IL)

S. 3414

Cybersecurity Act of 2012, Lieberman (I-CT)

Summary

STATUS

Summary

STATUS

Summary

STATUS

Forewarn Act, Brown (D-OH) Would redefine terms under the WARN Act and would lower the employee threshold (to 75 employees) under which employers are subject to the WARN Act. It would also increase the written layoff notice requirements under the WARN Act to 90 days.

Referred to Health, Education, Labor and Pensions Committee on 6/14/2012.

Would require civilian agencies to insource “closely associated with inherently governmental functions” to the maximum extent practicable. Would also reduce the allowable compensation cap for contractor employees to a level no greater than the President’s salary.

Reported by Appropriations Committee on 6/14/2012. Related Bills: H.R. 2980, S. 3254, S. 2198.

Would establish a National Cybersecurity Council to conduct cyber risk assessments, coordinate and encourage voluntary cybersecurity practices, and would seek to proliferate cyber threat information sharing between the government and industry.

Referred to Homeland Security and Governmental Affairs Committee on 7/31/2012.

S. 3442

SUCCESS Act of 2012, Landrieu (D-LA)

S. 3454

Intelligence Authorization Act for Fiscal Year 2013, Feinstein (D-CA)

Summary

STATUS

Would authorize appropriations for fiscal year 2013 for elements of the intelligence community and would implement reforms to reduce the potential of intelligence information being leaked to the public.

Reported by Intelligence Committee on 7/30/2012. Related Bill: H.R. 5743.

S. 3600

Data Accountability and Transparency Act of 2012, Warner (D-VA)

Summary Would expand penalties for businesses that falsely certify their small business status and seeks to eliminate instances of fraud within the small business contracting programs.

STATUS Referred to Finance Committee on 7/25/2012.

Summary STATUS

Would require accountability and transparency in federal spending.

Referred to Homeland Security and Governmental Affairs Committee on 9/20/2012. Related Bill: H.R. 2146.

Stay up-to-date on the state of our industry with a Market & Policy Briefing by PSC staff or

subscribe to PSC’s quarterly industry updates on our YouTube channel.

http://www.youtube.com/user/ThePSCouncil

Professional Services Council

Service Contractor / December 2012 / 35

Policy Spotlight

by Alan Chvotkin Executive Vice President and Counsel, PSC

Challenging DCAA Access to Contractor Internal Audits

I

n 2012, contractors were faced with an aggressive Defense Contract Audit Agency (DCAA) seeking unconstrained access to a contractor’s internal audit reports and the working papers of a company’s internal auditors. DCAA claims they need access to this material to fully assess compliance with government regulations. Both the Government Accountability Office (GAO) and some in Congress have weighed in on this issue on the side of DCAA. PSC and others are vigorously opposing this effort to grant DCAA unlimited access to such information. At press time, however, several of the forums where this is being addressed are still considering the issue.

Today’s policies were first set in 1988, when the 4th U.S. Circuit Court of Appeals, in an unchallenged decision known as “Newport News Shipbuilding,”1 held that a specific provision of the Defense Department’s procurement law relating to government access to contractor records2 is narrowly focused and clearly aimed at providing DCAA access to only objective data supporting cost charges paid by the government. In a subsequent decision that same year that also went unchallenged, that same court ruled in another Newport News Shipbuilding case3 that this law provides the DCAA access only to the objective factual material useful in verifying the actual costs charged by companies performing cost-type contracts for the government. The objective data cited in these cases are clearly not internal audit reports. Over the last quarter-century since those decisions were issued, the law has not changed on this point and these decisions have served to define and constrain the government’s (and DCAA’s) access to contractor records.

In the intervening years, many companies have voluntarily provided DCAA with information about their internal audit plans and even used that information as part of their joint annual planning sessions with the government’s auditors. Some companies have voluntarily made the full text of their internal audit reports available to the government. Other companies

have made this information available because they are required by a legal agreement to do so. While each company makes its own assessment of the need and value of sharing this information, most companies with internal audit functions do not now make their reports available and almost no company voluntarily grants DCAA access to their internal auditor’s working papers.

In December 2011, GAO issued a report titled “Action Needed to Improve DCAA’s Access to and Use of Defense Company Internal Audit Reports,”4 representing the first of three recent actions to overturn Newport News. GAO opined that, notwithstanding the 1988 court decisions, they believe that the law does provide DCAA with a right to gain access to a contractor’s internal audit material if relevant to carrying out DCAA’s audit responsibilities.5 Based on their interpretation of the law, GAO urged DCAA to vigorously seek contractors’ internal audit materials.6 As a second initiative, in May 2012, the Senate Armed Services Committee’s reported version of the fiscal year 2013 National Defense Authorization Act7 proposed to amend

See Newport News Shipbuilding & Drydock Co., 837 F.2d 162 (1988) 10 U.S.C. 2313 3 Newport News Shipbuilding & Drydock Co., 862 F.2d 464 (1988) 4 GAO 12-88 (December 8, 2011, available at http://www.gao.gov/assets/590/586765.pdf 5 Ibid, at 22 6 Ibid, at 23 7 Section 843 of S. 3254, the Fiscal Year 2013 National Defense Authorization Act 1

continued next page

2

36 / Service Contractor / December 2012

Professional Services Council

the access to records law to specifically grant DCAA access to defense contractor internal audit reports and supporting materials “for the purpose of assessing risk and evaluating the efficacy of contractor internal controls and the reliability of associated contractor business systems.” The Senate provision further provides that a contractor’s refusal to permit DoD access to such internal audit reports and supporting material could be taken into account in any assessment of the adequacy of the contractor’s business systems. PSC has strongly opposed this legislative formulation because it undercuts a company’s internal management assessments, creates the risk of coercion if a contractor withholds internal audit reports or working papers regardless of the justification, and could override the recently finalized defense business systems rule by assessing “adequacy” factors that are unrelated to the underlying qualification of the contractor’s business system.

In a third action, taken on August 14, DCAA issued a memo to its field staff on the approach DCAA will use to seek internal audit material from contractors,8 which in PSC’s view stretches the scope of DCAA’s authority. The memo directs that DCAA audit coordinators shall obtain semiannually a list

of all contractor internal audits with “sufficient detail to determine whether the audit may affect government contracts.”

Audit personnel are then told to review this list and request “all internal audit material, including working papers, considered pertinent.” The guidance acknowledges that DCAA cannot request unlimited access to internal audit information but, notwithstanding the existing legal posture, it tells its field staff that they “should have access to materials relevant to its audit responsibilities.” Since it is still new, PSC has no information whether this guidance has resulted in increased demands for company internal audit material.

There are clear issues relating to the specific questions of whether DCAA has or should be given access to a company’s internal audit reports and the detailed working papers used in the preparation of those reports, and to what degree that access extends. This is also symptomatic of the broader shift of power in the acquisition community away from contracting officers and toward the audit and oversight regimes. Both present troubling trends that have PSC’s advocacy attention and PSC continues to actively oppose these efforts on Capitol Hill and elsewhere. 3

Memo for Regional Directors: Audit Guidance on Access to Contractor Internal Audit Reports, 12-PPS-019(R), August 14, 2012, available at http://www.dcaa.mil/mmr/12-PPS-019.pdf

8

Professional Services Council

Service Contractor / December 2012 / 37

Service Contract Act Training Complying with the Service Contract Act (SCA) is one of the most technically challenging aspects of administering a federal service contract. The SCA governs pay rates for many service occupations— get it wrong, and your company can face loss of reimbursement or even debarment. But getting it right is no small feat.

To comply with the SCA, the entire contracting operation—from executive leadership to business developer, from proposal writer to accountant, from project manager to human resources specialist—needs to be conversant with the requirements of the act.

PSC is pleased to offer the only SCA training conducted in partnership with the U.S. Department of Labor, Wage & Hour Division.

Upcoming sessions held at the NRECA Conference Center, 4301 Wilson Blvd., Arlington, VA: March 4-5, 2013 June 10-11, 2013 October 23-24, 2013 Program Overview

In addition to the basic provisions of SCA and related contract labor standards, the course will address: • • • • • • •

employee classifications; collective bargaining agreements under SCA Sec. 4(c); payment of wages and benefits, hours worked; compliance procedures; contract proposals and contract price adjustments; challenging Department of Labor decisions; and communicating contract labor standards issues with federal procurement officials.

Attendees will also be offered up-to-date information on issues pertinent to the most significant cost factors in service contracting.

Check www.pscouncil.org for full details!

Registration: Member Price Non-Member Price

Cost $945 $1095

Prices include breakfasts and lunches.

For questions, please contact Melissa Phillips at 703-875-8059 or phillips@pscouncil.org.

38 / Service Contractor / December 2012 1 / Service Contractor / Summer 2008

Professional Services Council Professional Services Council

Committee Corner:

Government Affairs Committee: The Best Information Exchange in Town

by Roger Jordan, Vice President of Government Relations, PSC

O

ver the years PSC’s Government Affairs Committee (GAC) has earned the moniker of “Best Information Exchange in Town.” The monthly meetings offer the best of two worlds—in depth discussions with key agency leaders and policymakers followed by an information exchange among industry only.

The discussions with the guest speakers provide a mechanism for policymakers to outline their top priorities and discuss the potential impacts in an informal setting with industry.

The information exchange focuses on current events on the legislative and regulatory front over the preceding 30 days.

The exchanges provide a forum for attendees to learn more about recent developments and how PSC has and plans to continue to respond to them. Additionally, the meetings are an opportunity for attendees to engage in a discussion with their peers and PSC staff about other actions the association could be taking to address important issues.

The guest speakers at the meeting include agency speakers and Hill staff from key congressional committees, such as the Armed Services Committees, Small Business Committees, the Senate Homeland Security and Governmental Affairs Committee, the House Homeland Security Committee and the House Oversight and Government Reform Committee.

Agency speakers have included several Heads of Contracting Activity from federal departments, leaders from the Office of Management and Budget, the Government Accountability Office, the General Services Administration, among others.

The meetings have led to valuable exchanges of information and ideas on a number of fronts, including cybersecurity, small business contracting, strategic sourcing, and broader initiatives seeking to drive efficiencies and cost savings into the federal contracting process.

Committee meetings occur on the first Friday of every month from noon to 2 p.m. and lunch is provided. The meetings are held at a PSC member company location in Washington, D.C. Teleconferencing is also available for members

Professional Services Council

outside of the Washington area or for those unable to make the meeting in person.

Simply put, if you’re not attending the GAC meetings you’re missing a great opportunity to interact with government leaders, network with your peers, and learn about and influence PSC action on the most important issues affecting our industry. For more information about the GAC, please contact any member of the PSC policy team. 3

Guiding growth. Securing success.

Providing

resPonsive legal counsel with a strong

focus on all asPects of government contracting, small business Programs and corPorate issues

PrinciPal Practice GrouPs Business and Corporate Law Government Contracts Law Small Business Programs Government Relations Services Labor and Employment Law Intellectual Property Law Native American Law Trade Association Law Litigation

Areas of Special Focus Mergers and Acquisitions Claims and Bid Protests Size and Status Protests Regulatory Compliance Mentor-Protégé Programs Joint Venture Agreements SCA Compliance

PilieroMazza PLLC 888 17th Street, NW, 11th Floor Washington, D.C. 20006 Nurturing 202-857-1000 www.pilieromazza.com is the pmpllc@pilieromazza.com

your business key to our success.

Service Contractor / December 2012 / 39

MEMBER NEWS Pragmatics Appoints Michael Zaramba Chief Financial Officer

Pragmatics announced in October that Michael Zaramba joined the company as Chief Financial Officer (CFO). In his role as CFO, Zaramba will be responsible for the company’s financial operations, including corporate accounting, financial strategy, and business planning. He will also oversee tax functions and corporate acquisitions. Zaramba’s expertise includes finance and accounting, strategic planning, mergers and acquisitions, and risk management and compliance. Zaramba served as CFO and later as chief strategy officer at Stanley, Inc. During his tenure, he was a key contributor to the company’s growth and was instrumental in transitioning Stanley from a privately held enterprise to a public company. Most recently, Zaramba was president of Altron, Inc., an information technology (IT) services firm serving the federal market.

As president, he orchestrated, negotiated, and closed the firm’s merger with Provident Analysis Corporation, chaired the Executive Committee, and served on the company’s Board of Directors.

Pragmatics Appoints Joe Brock as Chief Operating Officer

Pragmatics announced that Joe B. Brock, Jr. has been appointed Chief Operating Officer (COO) effective October 1.

As COO, Brock will play a critical role in delivering highquality products and services and effective operational performance on a leading portfolio of federal government contracts. He will leverage the company’s performance excellence and best practices to increase organic growth. Brock joined Pragmatics in 2001 as director of operations for the company’s IT Services Division. He has held increasingly responsible positions since that time. His most recent role was senior vice president and general manager of Pragmatics’ Federal Civilian Division, which focuses on delivering information technology (IT) services and solutions to federal civilian agencies. Before joining Pragmatics, Brock was a vice president at L-3 Communications and a senior manager at Titan Systems Corporation. Prior to that, he held several federal government positions involving the management of IT programs for the Army and Defense Information Systems Agency.

Sabre Systems, Inc. President and CEO Phil Jaurigue Joins Panel of Experts at “Successful Growth Strategies for Government Contractors” Event

Sabre Systems, Inc. President and CEO Phil Jaurigue served as a panel expert at the “Successful Growth Strategies for Government Contractors” event on Oct. 11 at the Avian Engineering Headquarters in Lexington Park, Md. The event, which was sponsored by BB&T, featured an in-depth discussion focusing on how the current environment of budgetary uncertainty is affecting government contractors and what companies can and should be doing today to increase the value of their businesses in the future. Jaurigue joined Kevin Switick, CEO, Avian Engineering; Tim Garrett, Partner, Avascent Group; and Greg Woodford, Managing Director, BB&T Capital Markets | Windsor to make up the panel of experts for the event. The group represented various

40 / Service Contractor / December 2012

viewpoints and discussed a wide range of topics including how market factors are affecting the value of government contractors, strategies for success from the perspective of the CEO, characteristics that acquirers are looking for in today’s market, and how sequestration is impacting mergers and acquisitions (M&A) activity.

Sabre Systems, Inc. President and CEO Mr. Phil Jaurigue Joins Advisory Council of Arcadia University School of Global Business

Sabre Systems, Inc. President and CEO Phil Jaurigue recently joined the Advisory Council of the Arcadia University School of Global Business. According to the Arcadia website, the School of Global Business provides students with firsthand experience in the global marketplace. As a member of The National Advisory Board, which provides guidance for the School of Global Business at Arcadia University, Jaurigue will provide mentorship to students; work with the dean in identifying candidates to present as part of the Executive Speaker Series; and serve as a liaison between the business community and the school, as a guest speaker, and as an advisor in terms of curriculum development.

JustinBradley Celebrates its 10th Anniversary

JustinBradley celebrated its 10th Anniversary on July 1.

Started by Beth Monroe in 2002 along with Khristie Andrus and Andrew Chase, JustinBradley has remained true to the fundamental vision set almost 10 years ago. Promoting a company culture based on ethics, professionalism and the highest degree of service, the company has grown from three employees in 2002 to 60 in 2012.

JustinBradley Becomes Three Time Winner of Inavero’s Best of Staffing™

JustinBradley announced that it has been named to Inavero’s 2012 Best of Staffing™ Client list. Best of Staffing, presented in partnership with CareerBuilder, is the nation’s only satisfaction award that recognizes exceptional client service within the staffing industry. Fewer than 1 percent of North American staffing firms have been named to the 2011 Best of Staffing Client List.

Marsh and Rutherfoord Establish Advisory Council to Provide Insight and Innovation

Continuing efforts to support the government contractor community, Marsh, in collaboration with Rutherfoord, a Marsh & McLennan Agency LLC company, has established an Advisory Council of former military leaders within the firms’ Government Contracting Practices. The council will help guide the development of innovative, industry-leading risk and insurance solutions for this specialized business segment. Lt. Gen. Francis “Frank” Kearney (Ret.) and Maj. Gen. James “Spider” Marks (Ret.), both U.S. Army, bring more than 65 years of military leadership and insight to Marsh and Rutherfoord’s new advisory council. Its establishment comes on the heels of Marsh’s launch, in collaboration with Rutherfoord, of a new Defense Base Act (DBA) Center of ExcelProfessional Services Council

MEMBER NEWS lence. The DBA is the primary workers’ compensation vehicle for government contract workers laboring overseas.

ENC Strategy wins Sloan Award

ENC Strategy has won the 2012 Alfred P. Sloan Award for Excellence in Workplace Effectiveness and Flexibility. The award recognizes ENC as a model employer for their innovative and effective workplace practices. The award is part of the “When Work Works” initiative, a nationwide project led by the Families and Work Institute and Society for Human Resource Management. ENC was rigorously evaluated based on confidential employee surveys and a review of the company’s programs and practices. As a result, ENC now ranks in the top 20 percent in the country for creating an effective and flexible workplace for employees.

ENC Strategy wins multiple Web Marketing Association awards

ENC Strategy recently won two WebMarketing Association WebAwards: the Government Standard of Excellence award for its work on NWBC.gov and the Marketing Standard of Excellence award for ENCStrategy.com. The Web Marketing Association’s WebAwards recognize outstanding individual and team efforts behind the design and development of some of the most effective and best websites on the Internet today. For NWBC.gov, ENC Strategy worked with the National Women’s Business Council (NWBC) to ensure its redesigned site would make it easier for the public and NWBC constituents to learn about the research and other work the Council conducts to help women entrepreneurs. For ENCStrategy.com, the website was redesigned and rebranded to better explain what ENC does and its mission and values.

Have a story for Service Contractor’s Member News section?

E-mail Bryan Bowman at bowman@pscouncil.org.

Spread Thin Managing SpreadSheetS? Discover Unanet, the complete project management solution for government contractors, supporting: •

Budgeting/Forecasting/Planning

•

DCAA Compliant Time & Expense Reporting with Federal Per Diems

•

Real-Time Project Reporting on Actual vs. Budget, Profitability/Costing, Employee Utilization, etc.

•

Billing & Revenue Recognition

For more information on Unanet, the spreadsheet terminator, visit www.unanet.com/psc or call 703.689.9440.

Professional Services Council

Service Contractor / December 2012 / 41

PSC: SCENE & HEARD

1

5

4

7

3

2

8

1

4

County Chamber of Commerce

Photo: Fairfax County Chamber of Commerce

2

5

Elliott Branch, deputy assistant Navy secretary for acquisition and procurement, accepts his Public Sector Partner of the Year Award from PSC President and CEO Stan Soloway at the 2012 Greater Washington Government Contractor Awards on Nov. 1. Photo: Fairfax

Greg Baroni, president and CEO of PSC member Attain (left), received the Executive of the Year (less than $75 million) award at the 2012 Greater Washington Government Contractor Awards on Nov. 1. Mike Mannix (right) of Holland and Knight presented the award.

Photo: Fairfax County Chamber of Commerce

3

Sotera Defense Solutions CEO John Hillen, PSC’s chairman, accepts the Contractor of the Year (greater than $300 million) award for his company at the 2012 Greater Washington Government Contractor Awards on Nov. 1. Photo: Fairfax County Chamber of

Commerce

42 / Service Contractor / December 2012

6

Joseph Martore, president and CEO of PSC member Calibre, accepts the Contractor of the Year ($75 million-300 million) award from Lynn McUmber of Marsh & McLennan at the 2012 Greater Washington Government Contractor Awards on Nov. 1.

Acting Assistant Secretary of the Army for Acquisition, Logistics and Technology Heidi Shyu talks with a PSC member prior to her Sept. 5 Dialogue Series Breakfast speech.

6

Acting Assistant Secretary of the Army for Acquisition, Logistics and Technology Heidi Shyu participates in a Sept. 5 PSC Dialogue Series Breakfast.

7 8

PSC President and CEO Stan Soloway discusses “The Sequestration Dilemma” at an Oct. 9 NVTC event.

Rep. Gerry Connolly, D-Va., talks with PSC members during a PSC PAC event on Sept. 12.

Capital Finance

With you when America is counting on you Ask a government contractor what they are counted on to do, and you’ll get a lot of answers. Whether protecting and encrypting information, training our troops, or developing tools to enhance international relations, these contractors all have challenges to face and issues to solve.

If working capital challenges prevent your business from doing what it does best, accounts receivable financing from the Government Services Group at Wells Fargo Capital Finance may help. Let’s work together on financing you can count on.

Wells Fargo Capital Finance wellsfargocapitalfinance.com/govt 703-462-2308 • wfcfgsginfo@wellsfargo

© 2012 Wells Fargo Capital Finance. All rights reserved. Products and services require credit approval. Wells Fargo Capital Finance is the trade name for certain asset-based lending, accounts receivable and purchase order finance services, and channel finance services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Bank, N.A.; Wells Fargo Business Credit, a division of Wells Fargo Bank, N.A.; Wells Fargo Credit,

44 Service Contractor / March 2010 Professional Services Council Inc.; /Wells Fargo Distribution Finance, LLC; Wells Fargo Capital Finance, Inc.; Wells Fargo Capital Finance, LLC; Wells Fargo Trade Capital Services, Inc.; Castle Pines Capital LLC; and Castle Pines Capital International LLC.