This week on NVTC’s blog, Jim McCarthy of member company AOC Key Solutions Jim McCarthy of member company AOC Key Solutions shares suggestions for not only surviving, but also thriving amidst the occasional dysfunction in government contracting.


When you win, government contracting is among the most satisfying of careers. Unfortunately, the crucible we call a Proposal Center can, at times, degenerate into a witches’ brew of dysfunction. One where there exists a dark confluence of long hours, suboptimal working conditions, relentless deadlines, hidden agendas, political infighting, rampant egos, intractable issues, morose review teams, cranky bosses, and cold pizza. No wonder proposals sometime magnify the worst in us. But, when handled correctly, dysfunction can also spark the finest in us. Here are suggestions for not only surviving, but thriving, amidst the occasional toxicity endemic to Government Contracting.

1. Be a Part of the Solution, Government Proposals are hard enough. Commit from day one not to be part of the problem. Be part of the solution—a breath of fresh air in the war room. Offer constructive suggestions.  Be a problem solver, not a problem compounder.

2. Regard It As an Opportunity to Learn. Get metaphysical. Discern why you are going through this time of adversity and testing. What lesson are you being taught? Be open.

3. Remember the Mission. Your company is bidding an important contract. By helping it win, you help your company help others. Take solace that you are part of something worthwhile that matters.

4. Focus on Positives, Not Negatives. Radiate enthusiasm. Don’t be a black hole absorbing all light and energy from the proposal. Count continuously the things going right.

5. Help a Colleague. Make it about others, not you. Volunteer. Help those sharing the foxhole with you. Look for another person—perhaps younger than you, and commit to making him or her a success. Helping others animates even the most grueling proposal.

6. Support Your Boss. Under pressure? Imagine what confronts your leader. Help ease the hard times squeezing the boss. Be loyal. Give the boss the benefit of the doubt. Speak highly of him or her.

7. Don’t Take It Personally. Problems are endemic to life, business, and proposals. Check your ego at the reception desk. Be objective rather than internalizing the dysfunction.

8. Examine Yourself First. Before playing the blame game, reflect on how you may be part of the problem. Anger, resentment, frustration, and finger-pointing are infectious. Often, we are most critical of others in the very areas where we are weakest.

9. Change What Is Under Your Control, Accept the Rest. Stress and worry contribute not one iota to solving anything. Fix what you can. Change how you think about everything else. Shifting one’s attitude typically brings about altered behavior.

10. Watch Your Mouth.  Don’t whine, gossip, backbite, nitpick, rumor monger, second-guess, engage in character assassination, question another’s motives, or utter any comments that erode the sense of the proposal team. Don’t pour gasoline on the fire. Bad karma in a proposal center eventually dooms your efforts.

11. Take the Pause That Refreshes. As you near a crescendo or breaking point, leave. Take a walk. Grab a cup of coffee. Sit in your car. Breathe. Use a quick break to center yourself. Once renewed, rejoin the fray and redouble your efforts.

12. Maintain Work Life Balance. You cannot perform your best when you feel your worst.  Diet, exercise, spirituality, family involvement, quiet time, hobbies, reading, healthy sleep habits—first take care of yourself. Only then are you equipped for the proposal grind.

13. Set a Good Example. People are watching you. You are either a good role model or a bad one.  It really does come down to the choice you make.

14. Sweat Not the Small Stuff. And, as author Richard Carlson says on occasions, “it’s all small stuff.”

15. Invoke Your Pressure Release Mechanism.  Tamp down on the valve to discharge steam when needed.  Keep your outlook positive, not pressurized. If you don’t have a release mechanism, find one.

16.  Act Gently and Cultivate Empathy. Never pile on. Don’t tread on those are already weighed down. Lighten another’s load. Observe your teammates, allies, critics, and rivals–you may think you know what they are going through, but you don’t. Like you, everyone is on a private journey with rocky patches. Everyone stumbles—if not today, then soon. Be an encourager.

By applying these suggestions, you emerge from adversity, stronger, more resilient, and better equipped to handle the next challenge. Surely, it will come—not if, but when.


Jim McCarthy is the Founder & Principal of AOC Key Solutions, a proposal consulting firm dedicated to helping companies win government contracts. Mr. McCarthy’s career spans over 30 years of proposal development, market strategy, and oral presentation coaching to federal contractors. Learn more at www.aockeysolutions.com

 

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This week on NVTC’s blog, member company Venable shares “The Limitation on Subcontracting and Small Business Subcontracting Plans,”part 1 of their five part series on the SBA’s Proposed Rules to Implement the 2013 NDAA. 


The current limitation on subcontracting rule, or the “50 percent rule,” requires small business prime contractors on set-aside services contracts to incur no less than 50 percent of the cost of performance for labor. A similar methodology applies to materials and construction contracting. To implement requirements of the 2013 NDAA, the SBA proposes to alter the rule as follows:
No more than 50 percent of the amount paid by the government to the prime may be paid to firms, at any tier, that are not similarly situated, and in addition

  • Any work that a similarly situated entity subcontractor further subcontracts to an entity that is not similarly situated will count toward the 50 percent subcontract amount.
  • A similar 50 percent limitation applies to the amount paid by the government for supply contracts; a 15 percent limitation is applied to the amount paid by the government for construction contracts.

Accordingly, under the new rule a small business prime is barred from subcontracting more than 50 percent of the amount paid by the government under the prime contract, unless a subcontract is to a similarly situated entity, i.e., a subcontractor with the same small business program status as the prime contractor. Thus, a HUBZone small business prime contractor can subcontract to another HUBZone small business subcontractor without it counting toward the 50 percent limitation. That HUBZone small business prime contractor, however, will have to count a subcontract to a woman-owned small business toward the 50 percent limitation, because it is not a similarly situated entity.

The SBA has gone a step further from Congress. The 2013 NDAA focused only on prime contractor restrictions. This limitation, however, could allow a similarly situated subcontractor – to which the 50 percent limitation does not count – to further subcontract some or all of the value of its contract to a large business. Thus, on a $100,000 set-aside, a HUBZone small business prime contractor could subcontract $75,000 of the amount paid by the government to another HUBZone small business. That subcontractor, in turn, could subcontract some – or all – of its subcontract to a large business. The SBA proposes to block that loophole by imposing limitations to contractors at any tier, and specifies that subcontracts to entities that are not similarly situated will count toward the rule’s limitations. This would bar the HUBZone small business subcontractor in the example above from subcontracting too much work to a large business subcontractor.

The wording of the proposed new rules also would dramatically simplify the methodology for determining how the percentage of subcontracting is calculated. For both services and supplies, the percentage is calculated simply as a percentage of the amount paid by the government to the prime. This is a substantial change from the current calculation methodology, as services contractors who have spent time and effort determining the “cost of contract performance incurred for personnel” will attest.

The SBA has proposed significant penalties for small business prime contractors that misrepresent compliance with the rule. Those penalties include imprisonment for up to 10 years, and a fine that is the greater of $500,000 or the dollar amount spent in excess of the permitted levels for subcontracting.

The Bottom Line: What You Should Know

Under the SBA’s proposed rule, small business primes must be vigilant in tracking the amount of work subcontracted throughout their subcontracting chain, particularly the work subcontracted by similarly situated entities. Failure to keep track of subcontracting could result in the contracting team exceeding the 50 percent limitation on subcontracting without the prime contractor’s knowledge, and risk an accusation that the prime misrepresented compliance with the rule.

Small Business Subcontracting Plan Requirements

The SBA proposes to toughen up requirements pertaining to small business subcontracting plans, which could have significant consequences for large business prime contractors.

  • Reporting Fraudulent Activity or Bad Faith: The SBA proposes to allow small business concerns and commercial market representatives (CMRs) to report fraudulent activity or bad faith behavior by large business prime contractors with respect to their subcontracting plans. Reports would be made to the SBA’s Area Office where the firm is headquartered.
  • Strengthening Corrective Action Plans: Large business prime contractors failing to provide a written corrective action plan after receiving a marginal or unsatisfactory rating for their subcontracting plans will be subject to material breach of contract, which will be considered in the contractor’s past performance evaluation.
  • Data Collection and Reporting: The SBA proposes to require agencies to collect, report, and review data on the extent to which each contractor meets its goals and objectives as set out in subcontracting plans.

This proposed rule, coupled with the recent rule allowing small business subcontractors to communicate directly with contracting officers about a lack of payment, will affect how large business prime contractors and their small business subcontractors interact. Failure by a large business prime contractor to reconsider a strained relationship with a small business subcontractor could lead to an allegation of fraudulent activity or bad faith with respect to small business subcontracting plan compliance. This proposal by the SBA leaves no recourse for the prime contractor to respond to allegations of fraudulent activity or bad faith, which could have significant adverse effects for contractors.

The Bottom Line: What You Should Know

Under the SBA’s proposed rule, large businesses must be aware of increasing scrutiny about small business subcontracting. The SBA’s proposed rule does not specify that any of the data collected on its subcontracting plan will be limited. Therefore, representations as to plan compliance under one contract must be consistent with plan compliance under another contract, or a large business prime runs the risk of allegations of making false statements to its agency customers.

Submitting Comments

Contractors wishing to submit comments on these proposed rules can do so through regulations.gov by searching for RIN: 3245-AG58. Comments are due by February 27, 2015.


Continue following Venable’s Small Business Series for additional analysis and take-aways from the SBA’s proposed rule implementing the 2013 NDAA. If you have any questions about how these proposed rules could affect your business, please contact any of Venable’s authors: Keir Bancroft, Paul Debolt, Dismas Locaria, Rob Burton, Rebecca Pearson, James Boland, Nathaniel Canfield, or Anna Pulliam.

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