1. Building a government contractor for the 21st century
By Carlos Garcia
Founder of nine federal contracting companies
President of Tlingit Haida Tribal Business Corporation

2. The world has changed for government contractors
Far greater number of regulations
Price becoming increasingly important
Larger contractors are consolidation
Proliferation of multiple award contracts
Change from cost plus to firm fixed price contracts

3. Far greater number of regulations
Department of Labor regulations are onerous
Contractors must certify far more items on a contract
More inspections by OSHA and other regulators
Fines can be very large
Paperwork requirements have increased
Retention of records increasingly important

4. Price becoming increasingly important
Congress is mandating that agencies save money
The requirements grow but the compensation does not
Most contracting officers gravitating to low cost offeror

5. Large contractors are merging and consolidating
Many large businesses have merged
This makes it difficult to gain traction for teaming and subcontracting
Frequent reorganizations make it hard to know who the buyer is
When two companies merge they may select legacy subcontractors from one of the companies
Individuals with whom relationships have been forged may leave company

6. Increasing number of Multiple Award Task Order Contracts (MATOC)
These contract vehicles do not guarantee work
Bid and Proposal costs do not end with award of MATOC
Risk that MATOCs may not be funded
Risk of protest at MATOC level and Task level
Customer may decide not to use MATOC

7. Change from cost plus to firm fixed price contracts
Price is more important than ever
More risk to contractors
Fewer equitable adjustments
Importance of understanding work load data
Need to deliver service efficiently
Time is money
Low G & A essential

8. Part 2
Winners and losers

9. Winners
Companies that focus on industries where they possess advantages
Companies that can manage service efficiently
Companies with low G & A rates

10. Losers Companies that lack focus
Companies in denial about the amount of sole source work they can generate
Companies with high G & A rates

11. Role of key executives in developing and implementing strategy
Part 3
Role of key executives in developing and implementing strategy

12. Role of key executives in developing and implementing strategy
Board of Directors
Selection of the Chief Executive Officer
Setting hurdle rates of return
Allocating capital to the Chief Executive Officer
Establishing other objectives for the Chief Executive Officer

13. Role of key executives in developing and implementing strategy
Chief Executive Officer
Develop strategy for the organization
Establish business plan to achieve objectives
Select key management team
Establish objectives for each member of the management team
Report to Board of Directors

14. Role of key executives in developing and implementing strategy
Chief Operating Officer
Manage operations
Ensure compliance with laws and regulations
Deliver operational results that meet budget
Provide inputs in business development process

15. Role of key executives in developing and implementing strategy
Chief Financial Officer
Leadership of finance and accounting
Oversight of tax and audit
Oversight of rate structure
Oversight of budget
Cash flow and capital expense management
Provide inputs in business development process

16. Role of key executives in developing and implementing strategy
Vice President of Business Development
Manage all business development initiatives
Manage bid and proposal processes
Manage inputs from other key executives in the business development process
Ensure that business development process aligns with strategic goals

17. Classic mistakes made by contractors
Marketing 8(a) status as their only competitive advantage
Thinking that contracts are simply job shop rebadging operations
Failing to understand the customer’s objective on each solicitation
Failing to budget sufficient time and money for key solicitations
Spreading Business development budgets over a large number of opportunities

18. Part 4
Budgeting

19. Challenges of budgeting in government contracting
Contract awards get delayed
Protests delay contract starts
Government shut downs
Changing customer priorities

20. Budgeting must be done
Most budgets are too optimistic on contract awards
Most budgets are too optimistic on revenue generation
Most budgets underestimate business development expense
Most budgets underestimate start up costs on contracts
Most budgets underestimate legal expense

21. Zero based budgeting is safe approach
Start each year’s budget with a blank sheet of paper
Start by listing only the most critical expenses
Then add the fixed expense
Finally add variable expense
Budget revenue expectation and associated costs separately and then combine them
Avoid backing into numbers

22. Teaming and partnering
Approach teaming carefully
Invest the time to get to know your partner
Understand your partner’s mission and objectives
Investigate their prior experience teaming
Look for opportunities to creating long term agreements
Check SBA and other regulations in entering into agreements
State in your agreements how companies can exit partnership

23. Conclusions

24. The landscape has changed for government contractors
The government will continue to spend money on contractors
Contractors will be under pressure to perform – on budget and on schedule
Firm Fixed Price contracts will continue to be the norm
Low Cost Technically Acceptable evaluation criteria will become the norm
More risk will shift to contractors so price accordingly

25. Contact Information
Carlos Garcia
Mobile (303)