3 Key Areas to Navigate U.S. Government Contracting

Published by BradyRenner CPAs | February 28, 2024

Government Contracting

The process of managing finances and securing contracts with United States government agencies presents a set of unique challenges. Balancing compliance and competitiveness can be difficult, given the strict demands and ever-changing regulations.

Businesses engaged in government contracting require a solid understanding of financial services. However, not all small businesses may have the requisite expertise to handle these processes in-house.

Fortunately, financial management services can be outsourced to BradyRenner CPAs and Business Consultants. Providing financial management solutions to government contractors is a specialty for BradyRenner as a Business Consulting firm.

This article is a must-read for contractors who want to achieve financial success. Here, we provide steps on how to navigate common accounting and procedural challenges associated with government contracts.

1. Sales Cycle Challenges

Government contractors may find it challenging to navigate the governmental sales cycle. Understanding the obstacles and how to overcome them is an important step to achieving success. The best way to secure a government contract is to be proactive about identifying and overcoming obstacles.

Let’s explore some of the most common sales cycle challenges government contractors face:

  • Understanding Requirements: Understanding the requirements set by the Financial Accounting Standards Board (FASB) and the key emphasis areas of the Defense Contract Audit Agency (DCAA).
  • Navigating DCAA Approval: Successfully navigating the challenges to DCAA approval and ensuring that contractors are fully compliant with all regulations.
  • Information Analysis: Utilizing existing data to gain a competitive advantage and drive strategic growth after compliance.
  • Managing Changes: Proactively anticipating and implementing changes as requirements evolve.
  • Government Audits: Keeping your organization ready for potential government audits.
  • Staffing and Training: Navigating government contract changes by hiring highly skilled personnel, implementing robust policies, and instituting measures to prevent errors; providing staff with real-time training as policy changes occur.
  • Adaptability During Change: Implementing a system to grow operations and ensure smooth transitions during personnel changes.

2. Keeping Pace with Changing Regulations

Government contractors frequently struggle to match their accounting methods with strict U.S. government demands. This can create issues in preparing for audits and adjusting to rule changes. Using financial service experts allows business owners to focus on their core business while experts handle the financial and auditing aspects.

Government contracts involve a great deal of implementation and monitoring of the contractor’s policies, procedures, and systems to maintain compliance. Compliance with government contracts requires a proactive approach and an ongoing commitment to education and training. Maintaining their reputation and staying on top of regulations will enable contractors to avoid penalties and fines.

A contractor needs expertise in the following areas to navigate the complicated world of government contracting:

  • Strategic Guidance: Insights into the nuances and practical applications of the Federal Acquisition Regulation (FAR) are critical for informed decision making.
  • Understanding Agency-Specific Supplements: It is crucial to understand agency-specific supplements to ensure compliance with all regulations. NASFARS, the Global Strategy on Agricultural and Rural Statistics, and the Defense Federal Acquisition Regulation Supplement (DFARS) are just a few examples.
  • Real-Time Training and Support: Real-time training is necessary for contractors to adapt to the changing DFARS Procedures, Guidance, and Information (PGI).
  • Understanding FAR Complexities: Getting an overview of FAR’s origins and someone to guide them through its many parts is important for contractors due to complicated regulations and the time it takes to fully understand them.
  • DFARS Insights: DFARS has been replaced by DFARS PGI to enhance accessibility and training for the Department of Defense’s transition. Contractors need assistance to navigate the changes.

3. Managing Finances for Government Contracts

Managing finances in government contracting is challenging due to the industry’s complexity. Understanding costs, managing expenses, and ensuring financial sustainability require specialized expertise.

Operating without the benefit of financial expertise can easily lead to increased expenses, inadequate cost management, and financial instability.

BradyRenner has identified three areas where government contractors may need assistance:

  • Identifying Costs: Identifying and managing the costs associated with pursuing government contracts.
  • Valuable and Informed Perspectives on Sustainable Practices: The challenges of government contracting require insights for sustainable financial survival.
  • Strategic Financial Planning: Assistance in developing strategic financial plans tailored to the unique demands of government contracts.

BradyRenner’s CPAs and Business Consultants understand the unique challenges government contractors face and offer proactive solutions to ensure seamless business operations.

Contact us today for assistance in shoring up the financial health and strategic vision for your government contracting business.

Stay tuned for our next insightful article — a case study featuring Jen Mohler, a physician assistant who fearlessly ventured into establishing her own primary care medical business. Explore the financial challenges and triumphs she encountered on her entrepreneurial journey.