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The Country Intelligence Report
Decoding the Fiscal Year: A Defense Contractor's Perspective Part 1
Wondering how to navigate the intricacies of the fiscal year in the realm of government contracting? We've got you covered! I'm your host, Spencer Bentley, joined by Devin Floresek and Tyrell Cummings. Together, we dissect the operational and personnel impacts of this period, shedding light on workload management and the paramount importance of unceasing communication with clients. We also delve into the unique dynamics at the end of the fiscal year in the federal government versus the private sector - it's a comparison that is sure to leave you with a fresh perspective.
Keeping track of time with precision is no small feat in government contracting, and that's precisely what we'll address in the second part of our discussion. We unpack the 'use it or lose it' model, revealing its implications, and share invaluable tips on maintaining open lines of communication with clients when billing time. Who knew that the end of the government fiscal year could be as exciting as a traditional company's year-end? Make sure to tune into our next episode for more tips on preparing for the end of the fiscal year. Trust us, you won't want to miss it.
- Hosted by: Terrell Cummings & Devon Florczak
- www.countryintel.com
Hello and welcome to the Country Intelligence Report podcast. We are your hosts, spencer Bentley, devin Floresek and Tyrell Cummings. In this episode we're going to be talking about how businesses can navigate the end of the fiscal year.
Speaker 1:In Department of Defense, contracting this time of year is always a bit hectic lots of sort of operational in the weeds, last minute sort of things that we have to get finished and tidy up before the beginning of the next fiscal year. We thought it'd be helpful to have a conversation about exactly what goes into the planning, the paperwork etc. Everything that we have to get done to make sure that we end the fiscal year strong. Let's start out with operational impacts and employee dynamics. How does the end of the fiscal year sort of rush affect not just business operations but those that are involved with making things happen? How can we sort of focus on a potential increase in workload as the government's year comes to an end and adapt to tighter deadlines and requests that may be coming in sort of at the last minute? I'll just throw that out to the group here.
Speaker 2:Yeah, I know this year at least has been all of ours third, fourth, fifth, sixth end of government fiscal year that we've been working with the DOD. I think that one thing that we can say for certain is that it seems like at the end of each fiscal year, there's always some sort of change going on. One thing that I know that we do pretty well is that we do this all year anyways, but it seems like we're in even more constant communications with our clients during this time. It seems like we're getting more FaceTime with them. We're reaching out to them more, making sure that we're in the loop with everything that's going on, and also making sure and letting them know that they need anything. That's what we're here for. We're here to be tasked by them.
Speaker 2:I think it's obviously it's always important to be front-facing and making sure that your clients know that you're there to support them, because that's why they hired you. But, especially as the year comes to an end, because it just seems like at every federal agency starts to plan for the following year and typically there's a lot of changes that come with that Whether that comes to policies that are changing, new guidance is coming out, just making sure that you're on top of that and the back-end pieces, that is, making sure that the people in your company are good with the workload and being in communication with your own team and making sure that everyone's workload is balanced and no one's really taking on the front-end of it. I know those are really generic, but especially around this time of the year it's a little bit different than traditional businesses where the end of the physical year is December. I feel like it definitely comes quicker at you, especially at the end of summer and beginning of fall, that you need to lock down and pay attention.
Speaker 3:Yeah, I definitely agree with that, devin, as far as that like so she would. You know those, those, those people within the company that have gone through different fiscal years before, when they do have a federal Government client, what not you know what to expect, kind of know, kind of that you know things for probably will probably be a little bit tighter With the client, or you might have a few more deadlines with the client, or you know, kind of wrap things up before it happens as far as everything there. So it's just something that you can't expect, you know, and you sounded those new individual teams kind of give them the heads up like a. This could be Probably a little more hectic than normal. As far as that, that's probably what. It's gonna be a little bit different than your own.
Speaker 3:No fiscal year just because especially have multiple government clients. You know there are multiple private boards do a similar type thing to wrap with those in the years they are. They may be busy or their leadership may be busy. We're trying to get that face-to-face contact with them. So it's just something that the small businesses especially set to prepare for know that it's gonna be probably a higher workload right there Into the summer, right there during the month of September because everybody in the federal government's trying to Lock things down for the year and get things taken care of and you know Usually once that happens then getting of the next year, then you're off and running things a little more free on therein and you know it's way to stop their shoulders. But before that it's definitely a little more hectic for sure.
Speaker 2:What do you guys think about? You know, because this was my you know first actual job. But for for both of you that have had more you know traditional jobs, how do you compare the end of the government fiscal year versus just you know, a traditional company? Because to me at least, it seems like you know traditional companies. The end of the fiscal year doesn't really matter, besides like the people in the front office. But you know, it seems like you know we're all praying more involved and more in tune with what's going on, at least with you know what's in the federal contract and space when the end of the fiscal year does happen.
Speaker 1:Yeah, I mean, that's Very true. This is the first job that I've had to actually even consider. You know what's going on at the end of the fiscal year and it's not, it's not the first leadership position that I've been in, but it's just not as Not as pressing an issue, for sure. Just, you know, structurally, you know the open market has a lot less considerations than the federal government does. So yeah, just generally, I think it's, you know it's. It's really not a big deal at all in the private sector At least, for you know everyone but accounting and maybe finance. But yeah, yeah, for sure, yeah, that's awesome.
Speaker 3:Say to you know, as far as like for the federal government, a lot of times they're trying to see okay, what budget did we have? What funds have we not used? Do we need fair our way to use those funds and what not there, except not if they have it was in their budget. They don't use it in that previous year, then the next year they probably won't get it, or the next contract they probably get to be cut out, said but okay, well, you did it last time without using these funds, you do it next time without using them as well. So, whatever budget they have, they're in trying to use every bit of that budget, or sure that we need more money for that Budget as far as doing that, so that's probably one thing, whereas, like you know, I guess I'll say I'll Try the open market companies or whatnot, or the small businesses.
Speaker 3:They maybe you said Spencer, they're counted by. We say we're out things, trying to wrap things up there. Make sure everything's reconciling properly and all that. That's what's most important to them. That says I'm important to the federal government and those, those companies within federal government, but that's the small business companies are looking at to make sure that everything's reconciling, make sure that they're I guess that their bottom line is in the positive ideally and Make sure that everything was done, done correctly. Because you know just one business if they have investors, those investors want to see Like everything is done there, and I'm sure there's a lot of the things behind the scenes the kind of apartment has to do to make sure that everything's done properly as well. So you know, as far as any workers, they may not experience the, the, the press, the pressure of end of year like something from accounting or finance department and in those open market companies, but that's probably a big difference as well.
Speaker 1:I Definitely so. Let's think about the strategic and administrative tasks that have to be handled at the end of the year, everything from ensuring contract compliance to accurate financial reporting, resource management, future planning for the following fiscal year. How are we to think about contingency plans and the importance of regular communications with our contracting office?
Speaker 2:Yeah, and I think, as you guys talked about, the difference between traditional businesses, so to speak, private businesses, those on the public market, versus working with the government is that it seems like there's a lot more people involved with resource planning and that even resource planning and where we're tasking time to as far as available hours and billable hours goes, we sort of have to consider that, being an employee as well and, I think, being an nutritional company, you don't really got to worry about that.
Speaker 2:You have your tasks going out, you just get paid.
Speaker 2:But there's obviously different task areas that you can build time to and that's definitely something you have to consider for sure, and at least for the end of the year I do know. Obviously we're always tracking our time and we're always sort of seeing how much time to be in build, make sure that the time that we're building is accurate towards what we're actually working and obviously it's very important to do all your long so that once this time comes and we do have to report out that we worked such and such hours towards certain task areas on the contract, that it's accurate and it's ready to go and it's also easily digestible from the contract in the office, because I'm assuming that as well. Obviously this is a busy time for the core as well, and especially if there's changes going on as far as new guidance coming out. A lot of moving parts, a lot of things are going on, but the easy stuff, like make sure the time is tracked accurately, is very important. It's something that contract and company should be doing all year accurately anyways.
Speaker 1:Yeah, for sure that makes a lot of sense that it is certainly a difference with sort of the all hands approach that federal contractors have to have when it comes to considerations for the fiscal year. So dovetails into the next topic actually, about the sort of phenomenon of the issue that you brought up to earlier, which is sort of the use it or lose it budget that companies and different organizations within the government have to sort of grapple with. How are we to think about the impact of those on considerations for fiscal year planning and any sort of evaluations that may happen, like performance evaluations or new training requirements that you have to deal with when it comes to planning for the fiscal year and having that dynamic to navigate around? How we do sort of think about that sort of looming issue that we all have to really take into consideration as we work with the federal government, right, and I guess, like I said before, the federal government has to work about what their budget is.
Speaker 3:That same thing for the contractor we have to worry about, like Devon said, make sure we're tracking our hours correctly or whatnot, and make sure that we're utilizing all the hours that we said we need to utilize to do the job.
Speaker 3:Because once again, if we report out less than what we said was going to be needed to do the job, then next time they put out the RFP they're going to say, well, we're going to do it in this amount of time, which can be less hours versus the hours we said before, because you obviously didn't need as many hours to utilize it.
Speaker 3:Or maybe it's one less FTE or full-time employee for the position versus what we had, because you obviously didn't need the full amount of time or the full confidence in employees as well. So that's the other thing where, like Devon said, tracking those hours, make sure you get those hours to the core properly and everything like that. That's going to be most important there for the current fiscal year and whenever that contract comes about for a reconpeit, you want to have to make sure those hours are at least there. If you're a part of that thing that I'm going forward. So that's another thing to think about, budget-wise and on your end, on the contract and not taking away revenue from your company that you would be having based on not utilizing enough hours or not, I guess, reporting enough hours to do the work that's required. So there's something to think about there as well.
Speaker 2:Yeah, I think that's more of a or.
Speaker 2:I think that's also a matter of ethics and being ethical in our recording as well is that when we're tracking how many hours we're billing to the client, we probably need to be sure that we're communicating with them if we think we're not billing enough time per what the contract states and if that's the case, we need to be up front and say more work needs to be given to us in these task areas so we could keep billing and make sure that we're making use of the time that's available to be billed from the contract.
Speaker 2:Because that's definitely a fear I think of contract groups, especially those with small business set-asides, is that they have X hours and they want to make sure they're obviously billing all the hours that are available, but they don't want to get to them the year and they only bill 80% of the time that they should have. And then the government comes back to them and says, hey, we think that you're not using the hours to the best of your ability or we're not tasking enough, and then they take away those hours and I feel like that just will cause some issues. So one way to avoid that is obviously tracking those hours accurately throughout the year as the year goes on and, like we said before, just being up front with the client saying we're looking for more tasks in these areas so we could do good work for you guys and be able to not only just bill hours but to actually make them useful and provide value. That way, Definitely.
Speaker 1:Yeah, that's a huge consideration we get harped on quite often for, you know, as a company, making sure that we're staying on top of our hours it's not some menial task. When you're talking about dealing with the federal government, every single hour has a larger implication towards potential future work, so definitely something to always take into consideration.
Speaker 2:Yeah, and I think that's something that the DOD is definitely trying to fight, to sort of use it or lose it functions that seem to just have been in place forever. For example, I know that a lot of the R&D contracting companies you know we're not really into these work too much, but I know that, for example, from some people, then some friends you know friends with through the engineering community and we're being billed through these R&D contracts is what called no year money. So essentially it's money that you know when they win a contract, they have, you know, four or five task areas and each task area is dedicated a certain amount of money and essentially there's no year attached to it. So the money just, you know, stays there and is in use until you know it's actually fully used and then, once it's used on, you know they have the discussion on whether or not to renew the contract or make an addendum and, you know, add money to the task areas. So I think things like that functions, like that being added to you know the DOD is a good thing.
Speaker 2:I feel like it's sort of archaic to you know, consider your budgeting, you know, as you know, some agencies do where, if you don't, you know, use that money, then they're just going to take it away from you. You know that that doesn't really seem to be, you know, advantageous toward towards anyone. So I thought, you know some of these functions I thought were kind of interesting. But you know, maybe that's something that small businesses and not just small businesses, but you know, the contacting industry as a whole can sort of work on them, on getting some of these different funding functions in place that don't really depend on, you know, the fiscal year.
Speaker 1:I agree the user to use lose it part of me model is, for lack of a better term, archaic and it also incentivizes a lot of just fluff, a lot of abuse. There's no reason for someone to act or operate in a more efficient manner if they know that it's potentially going to hurt the bottom line for them to come in below their budget and in fact it incentivizes wanting to sort of blow the budget up to justify asking for more money later down the road. So yeah, definitely it may have had its uses in the past, but as contracting for the government, especially the Department of Defense as a whole, has become more professionalized and more centralized among a few actors, essentially it's really sort of outlived its utility and it's sort of morphed into something I think nobody really expected honestly, and I'd say it's probably one of the driving factors behind the ever-increasing budget for the Department of Defense. But that may be another conversation for another time.
Speaker 2:Yeah, definitely.
Speaker 1:Yeah Well, this is great stuff and this will be. We're actually going to follow up this episode with a part two, where we will discuss more in the weeds about how country intel handles our end of the year fiscal challenges and and how we prepare for the next year and position ourselves to win more work. So stay tuned for that. Thank you for listening. Talk to you next time.
