Winning a contract in a new state can present many challenges, not least of which is ensuring that your company is compliant with the state’s tax code. The worst approach to state tax compliance is assuming that the taxes your company may be subject to and the tax treatment of your company’s activity will be the same as in other states. This is especially the case when it comes to Hawaii. It’s not surprising that many government contractors venturing into Hawaii overlook the General Excise Tax (GET), as it’s often assumed that the GET is essentially the same as most other states’ sales and use taxes. However, the unique nature of the GET can catch many businesses off guard, and the Department of Taxation’s penalties can be quite unforgiving.
2017 is a significant year for Department of Defense (DoD) contractors, as Defense Federal Acquisition Regulation Supplement (DFARS) compliance is required “as soon as practical, but no later than December 31, 2017 (252.204-7012.ii.A).” DFARS clause 252.204-7008 addresses requirements for safeguarding covered defense information controls in government contractor systems. Covered defense information is a broad term for unclassified controlled technical information or other Controlled Unclassified Information (CUI), which has protection and dissemination requirements. Clause 252.204-7012 expands on these safeguards to include cyber incident reporting requirements. These mandatory controls are detailed in the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171: Protecting Controlled Unclassified Information in Non-Federal Information Systems and Organizations.
Significant regulatory changes instituting small business subcontracting improvements have been incorporated into the Federal Acquisition Regulations (FAR), imposing additional small business-related obligations on large prime contractors (“Prime”). Although these changes went into effect on November 1, 2016, businesses may not experience their full impact until later this year. Existing government systems, such as the Electronic Subcontracting Reporting System (eSRS), need to be modified to accommodate several of these compliance requirements.
The GSA has started incorporating the updated FAR clauses containing these provisions into its Schedule solicitations via refreshes and mandatory modifications. The most significant changes being implemented are as follows:
Federal contractors, don’t forget that three important reporting deadlines are coming up this month! For GSA Schedule contract holders, the deadline for 72A Sales Reporting and IFF remittance is Sunday, October 30th. You must report, even if you have zero sales in the preceding quarter. Log in to the 72A Reporting website to complete these action items.
For contractors who have an approved small business subcontracting plan on an active federal contract, the Individual Summary Report (ISR) and/or Summary Subcontracting Report (SSR) must also be submitted by Sunday, October 30th. Reports are required regardless of whether there has been any subcontracting activity. Log into the eSRS system to complete your ISR and/or SSR.
Finally, companies with service contracts containing FAR 52.204-14 or 52.204-15 (which includes GSA Schedule holders), must complete their Service Contract Report (SCR) in the System for Award Management (SAM) by Monday, October 31st. You can find more detailed information about the SCR requirements, including submission instructions, in this blog.
A failure to meet service contract reporting requirements may result in the government finding a contractor non-compliant. In accordance with FAR Subpart 4.1704,“If the contractor fails to submit a report in a timely manner, the contracting officer shall exercise appropriate contractual remedies…[and] make the contractor’s failure to comply with the reporting requirements a part of the contractor’s performance information” in the Contractor Performance Assessment Reporting System (CPARS).
Should you have any questions or concerns regarding these reporting requirements or deadlines, please contact Jennifer Aubel at firstname.lastname@example.org 301.231.6253.
Not following the terms and conditions of your GSA Schedule Contract can cost you big $$$!
Scenario One: You receive an RFQ from a Federal Government procuring agency that will utilize your GSA Schedule contract on a re-compete for work your company is already performing for this customer. The RFQ lists the labor category title, education and experience requirements for the work, including a Senior Network Engineer that requires a Bachelor’s Degree and 10 years’ experience. Your Senior Network Engineer GSA labor category requires a Bachelor’s Degree and 8 years’ experience, but the person you are proposing in the category is familiar with the work being performed at the agency. The agency’s personnel are familiar with this resource and like the work that she has done in the past. The agency personnel say, it’s fine if you use your person with 8 years’ experience as a substitute for our agency requirement of a person with 10 years’ experience. It sounds harmless enough. The agency has agreed, so you’re in the clear, right? Wrong!