Big things are on the horizon for government contractors this year.
After all, 2020 ushers in a new decade of new technological advances and legislative developments.
As laws catch up to technology, we are keeping our finger on the pulse of trends this year, so that our government contractor clients can maintain an advantage and continue securing work.
No one, even the most number-loving accountants among our ranks, loves the idea of an audit. However, they do serve important purposes and we love helping clients make sure the numbers match up!
Moreover, because last year the Defense Contract Audit Agency’s (DCAA) was so successful in reducing their Incurred Cost Submission backlog, government contractors should prepare for (and expect) more potential audits.
Types of audits to watch out for?
You’re probably already familiar with accounting system audits as part of the contracting process.
However, proposals audits may be newer to you. This type of audit helps Contracting Officers determine the realism of the price you will charge the government by proving that your basis of estimate has a leg to stand on…or in other words you’re not just pulling estimate numbers out of the air.
Planning for Data Privacy & Cybersecurity Risk Management
Data privacy has been in the news for the last few years with the widely known implementation of the California Consumer Privacy Act (CCPA) and Europe’s GDPR.
Although data privacy is nothing new, government contractors may need to upgrade the way they handle confidential data due to upcoming changes to the National Institute of Standards and Technology (NIST) Data Privacy framework.
Also coming this year is the rollout of the new Cybersecurity Maturity Model Certification (CMMC). CMMC replaces existing cybersecurity regulations and sets a new standard for technical practices and process maturity for government contractors.
In addition to any DCAA audits, before the DoD awards any proposals, contractors must achieve a specific CMMC rating (typically 3-5 out of a scale of 1-5), which demonstrates their level of preparedness for responding to cybersecurity risks.
The bottom line here is that to be awarded government work, contractors must have a plan in place to effectively manage and protect confidential information.
Vetting Supply Chain Management Partners
Vendor selection has always been critical for government contractors.
Now, it’s mandated.
To be awarded government contracts, companies must choose partners with a low security risk and appropriate CMMC ratings.
Moreover, last year’s EO 13873 focuses specifically on eliminating security breaches through IT products with backdoors. As a result, contractors may not use vendors deemed a national security risk.
Wrapping it Up
As legislation catches up to technology, government contractors who are prepared to react and adapt to new developments and fluid scenarios will have an advantage over those who do not have flexibility built into their businesses.
As a result, we highly recommend investing in Enterprise Resource Planning (ERP) software like Costpoint, Unanet, or Jamis. These scalable accounting software platforms allow for more functionality and automation, while support government requirements by design.
Want more detail on these trends? Grab our Government Contracting in 2020: Protecting Data Integrity eBook today!
WJ Technologies is a leading provider of accounting solutions for government contractors. We provide consulting, compliance, staff augmentation, and training services to support all government contractor accounting and finance functions. Our information technology services will help your organization navigate from outdated systems to powerful and integrated ERP software solutions. Contact us today to learn more!