If your company was formed through the Small Business Administration's 8(a) Business Development Program, you're in excellent position to secure government contracts — just like major defense contractors.
That's the good news. The bad news? You'll be required to meet Defense Contract Audit Agency (DCAA) requirements — just like major defense contractors.
Get Your Foot in the Door (Without Getting It Slammed)
When people think of defense contractors, they tend to think of companies like Lockheed Martin, the international corporation whose core business is supplying sophisticated technology systems to the U.S. government. It's no surprise that Lockheed Martin has to contend with massive amounts of red tape. (The company is subject to 70 different DCAA audits.) But with an estimated 97,000 employees, Lockheed Martin is also large enough to maintain a dedicated staff to focus strictly on compliance issues.
The federal government also awards contracts to smaller businesses. That includes those created through the 8(a) Business Development Program, which was designed to give economically or socially disadvantaged entrepreneurs a foothold in government contracting. Sole-source contracts are among the benefits to which 8(a)-certified businesses are entitled.
Holding a sole-source contract doesn't mean, however, that your 8(a)-certified business is exempt from DCAA audits. Not having a staff trained in compliance issues won't get you off the hook, either. And the penalties for noncompliance can be severe. Recently, TSheets released a checklist to help business owners avoid losing coveted government contracts as well as the possibility of fines and even prison terms.
What Could Possibly Go Wrong?
Here are just a handful of the need-to-know items on the TSheets checklist:
- DCAA time-tracking rules apply to everyone in the company, including those not directly working on the government contract.
- Hours must be tracked in real time.
- Timekeeping and payroll responsibilities should be separated.
- The DCAA can conduct unannounced audits, or "floor checks," at any time.
Don't Worry — Help Is at Hand
If you're starting to think that a government contract wouldn't be worth the cost of implementing and maintaining DCAA compliance measures at your 8(a)-certified business, think again. An outsourced bookkeeping services provider can provide the support you need to stay in compliance with DCAA requirements while also enjoying the benefits that come with a government contract.