KEYS TO GREATER PROFITS

In the 17th Annual Government Contractor Industry Survey released Monday by Grant Thornton LLP, the"failure to seek compensation for out-of-scope work contributes to low profit rates."  The vast majority of respondents to the survey said their procedures for identifying possible claims were either somewhat effective or not effective at all.  Eighty-one percent of the surveyed companies said they received requests for extra work without a contract modification.  As Grant Thornton says:  "Such requests by government personnel are not consistent with the government's own procurement regulations, and the frequency of such requests should be a matter of serious concern among government officials."

Grant Thornton also reported that the relationship between contractors and government officials had deteriorated during the past year and only 22% of those surveyed said contract administration issues had been resolved efficiently.

This is not good news but it is consistent with our experience over the years.  As the government contract management workforce is reduced (as it has been), contract management efficiency and effectiveness deteriorates.  Moreover, as experienced contract people move on and are replaced with the less experienced, contractors find the workforce becomes undereducated on the complex rules governing government procurement.

As we have often said before, the antidote is available if the contractors will just use it.  Contractors may not have much if any control over the depth and knowledge of the federal procurement workforce but they can control their own behavior.  Contractors need to increase their knowledge of the rules and exercise their rights to enforce them.  Pure and simple.  Know the rules and have the guts to enforce them.  "The failure to seek compensation for out-of-scope work contributes to low profit rates."  There is a changes clause in these contracts and it is meant to be used.  Don't do extra work without a modification or if you do, submit your claim and insist that a modification be negotiated.

There are efficient and economical ways to resolve claims for additional compensation.  One way, short of litigation, is described in detail at our consulting services web site, www.spriggsconsultingservices.com/resolve_disputes_shtml.  We also have strategies and formulas for moving your claims through the appeals process smoothly and quickly.  To learn more, contact us at bill@spriggslawgroup.com.

bill@spriggslawgroup.com