Recently we provided a blog post on how to identify stimulus project opportunities with the federal and state governments. In that post we discussed different websites to access to find projects as well as requirements as a contractor to qualify for certain projects.
Now that you have identified opportunities that fit your organization, are you ready to succeed with these projects. Success goes far beyond the actual earth moving or construction of the project. Success for stimulus projects ultimately lies with your ability to properly plan, preparation and recordkeeping for the project.
When preparing for government and stimulus related work, consideration of these three steps could be the difference between a profitable, efficient project and one that is layered with delays that ultimately impacts cash flow and possible termination of the contract.
1. Learn the Rules and Reporting Requirements
Contractors must have a clear understanding of the law to be competitive and profitable. Stimulus-funded projects require contractors to follow the same laws, policies and procedures as any other public works project. Understanding the Davis-Bacon act and the local prevailing wage policies for your area will ensure that wages and fringe benefits are paid and reported according to the law.
With the passage of the stimulus plan comes additional reporting requirements. These additional regulations were established to encourage competition, transparency and accountability:
- Quarterly online reports that show project status, number of jobs created, etc.
- "Buy American" requirements for materials used in construction and manufacturing
- Whistleblower protections for those who alert the federal government to contractors questionable use of stimulus funds; and
- Greater authority for the Government Accountability Office to audit any records of the contractor and subcontractor.
2. Streamline Accounting and Reporting Processes
The largest barrier standing between a contractor and government work is often the company's accounting system. Having a robust construction specific accounting system with good reporting features can help to resolve this possible barrier. Some accounting system necessities are:
- Multiple pay and employee tracking
- Prevailing and non-prevailing wage tracking
- Single time card entry system
- Unit price billing
- Robust job cost accounting
- Cash flow by job
Having an accounting system with these capabilities will provide for the reporting necessary to state departments of transportation and the federal government which will ultimately increase cash flow faster payment for services and less change for delay due to not having all the required information.
3. Use Historical Job Data to Identify Core Strengths
A job cost accounting system that can track a project by cost, phase or activity level allows contractors to identify their core strengths and weaknesses. Historical job data can give the contractor the precise information needed for better estimating. It also can point them toward the types of government jobs they have the opportunity to win.
By following these three steps, you will ensure that you are ready to bid and compete for federal and state stimulus work. For more information regarding this article, please contact David B. Blain at dblain@macpas.com.
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