Over the course of the last year, GSA has announced several changes to the Contractor Assistance Visits (CAVs) performed by its Industrial Operations Analysts (IOAs). What amounts to perhaps the biggest change yet, that IOAs will review task orders issued under GSA professional services contracts to ensure that the resources performing work on GSA orders meet minimum labor category qualifications, was announced in the fall 2014 issue of “GSA Steps”.
While this announcement serves as specific notice to GSA Schedule contractors to pay credence to the way the price, sell, and staff their projects, it also speaks to a broader trend that all professional services contractors should be aware of: the Government is paying close attention to the services that it buys, and the Government’s enforcement community is focusing in on the qualifications of the resources providing those services as well as the pricing of those services.
Instant analysis: What does this mean to you?
The government has placed an increased focus on the services it purchases
Pricing, compliance with contract terms and conditions, qualification of resources, and performance on professional services contracts has come under increased scrutiny for all contractors, no matter what contract vehicle they are selling through and no matter what government entity they are serving. Audit findings, disclosures, and qui tam claims related to these types of issues are becoming more common. Professional services contractors need to be aware of this, and they should ensure that they have well thought out policies, processes, and systems for staffing their projects and tracking the qualifications of their employees. Proper documentation and consistent and effective record keeping policies are also very important. Contractors should be aware of how the Government assesses pricing on services contracts, and of any specific contractual requirements regarding their pricing.
Pre- and Post-Award Audit scope is creeping into Contractor Assistance Visits
For quite some time CAVs have been relatively benign reviews. In preparing for these visits, contractors who gathered all requested information in advance of the CAV (which was typically limited to a handful of invoices and orders, contract documents, and answers to a limited number of questions that sometimes required supporting documentation), paid their Industrial Funding Fee correctly and on-time, and could generally demonstrate the effective administration of their contracts, were typically rewarded with excellent ratings on the report cards they received following the visit. With an increased focus on a broad array of contract compliance issues, contractors facing a CAV now must be prepared to respond to more cumbersome data requests and increased scrutiny on pricing and labor category compliance, among other things. As a result, CAVs are slowly starting to creep into territory that has traditionally been addressed in Office of Inspector General (OIG) pre- or post-award audits. While this may serve to better prepare a contractor if they are selected for an audit, the unfortunate reality is that IOAs may lack the experience and knowhow to tackle more complex (and often subjective) issues such as labor mapping.
Broader scope during CAVs could lead to findings or penalties
Recently, we have seen IOAs report findings to a company’s Procurement Contracting Officer (PCO) that have included a request for a refund/payment to address what the IOA viewed as contract compliance issues. With broader and more comprehensive CAVs and an additional focus on labor category compliance, it seems possible that these types of findings could become more common. For contractors who are preparing for a CAV, particularly those who offer professional services through their Federal Supply Schedule contracts, it is more important than ever to be well prepared for the visit. A thorough compliance review performed in advance of the CAV can help to identify and proactively address any issues before the visit takes place.
Findings during CAVs could expose a contractor to additional audit scrutiny
Whether you are facing a CAV, preparing for an option exercise, or performing routine management of your company’s GSA Schedule contract, you should always understand your compliance obligations and take the steps necessary to ensure that your company is fulfilling those obligations. The expanded focus of CAVs serves as a reminder of what some of those compliance obligations are. For professional services contractors, the effective management of labor category pricing and labor category mappings are two of many increasingly important obligations. Contractors should take note that findings from a CAV can lead a company’s PCO to request a full audit, and with compliance in this area coming under the spotlight, it is a good time to review your policies, practices and systems to ensure compliance, or if necessary, to proactively address and remediate any issues.