And the Supercircular is Here

2 CFR 200

26 Dec 2014

The Office of Management and Budget (OMB) published the interim joint rule implementing the Uniform Guidance (2 CFR 200) in the Federal Register today.  This action ensures that the Supercircular takes effect on schedule on December 26. 

OMB did not indicate any surprises in its release – the bulk of the announcement includes agency implementing regulations.  However, Federal managers, pass-through entities, and non-federal entities will need to review the OMB-approved exceptions included today.  These exceptions are often driven by a Department or Agency’s authorizing statutes or other congressional mandated items. A list of all agency exceptions is found here.

A few important items we noted during our initial review:

  • Procurement Grace Period Included (200.110). 2 CFR 200 provides non-profit organizations and institutions of higher education (IHEs) a one-year grace period to implement the new procurement standards. OMB will include additional information in the 2015 Compliance Supplement.
  • DUNS references updated to “Unique Entity Identifier.”  This change signals that OMB moving away from using DUNS in Federal awards – in line with DATA Act implementation efforts.
  • New Suspension and Debarment section added (200.212).  Non-federal entities and contractors must also ensure they do not use Federal funding to do business with “certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.”

Please note that will be updated once the regulations go into effect on December 26.

We will continue to review the full publication to make sure that our upcoming 2015 Federal Grants Update sessions are up to date.

An Organization Knitted Together – by a Mustache

MustacheFederal agencies are by their very nature complex organizations with a wide variety of highly specialized functions that often do not interact with each other as part of day to day work. This creates the perfect environment for unintended silos and a workforce that doesn’t feel connected with others working somewhere else in their agency.  My organization has found a way to remedy this type of situation by building stronger, broader networks through community awareness activities.

Our #Movember team recently completed our month of unabated facial hair growing. For those who are not aware, Movember is a movement that encourages men to grow mustaches (or other facial hair) to help raise awareness of men’s health issues: this year’s focus is on prostate cancer, testicular cancer, and depression.

Men typically aren’t comfortable talking about these ailments, and so this is a way of encouraging them to get screened annually, or otherwise managing these and other men’s health issues. If you looked around, you may have seen more facial hair than at other times of the year during November. If you did, it may have been because others are participating in Movember.

Word of mouth is how our Movember team was built.  Human Resources sent out an email announcing my co-worker Ethan’s interest, and asked if anyone was interested in participating. As Ethan walked around the office doing his regular work (providing IT support), he reinforced the message and did some light recruiting. “Hey, you look like you need a mustache!” he said, or, “A beard would go well with that caterpillar.” Ethan can be pretty engaging, and pretty soon, we had a team of nine men from across the organization, plus a few outsiders, participating in this year’s facial hair grow-a-thon.

What is interesting is how the team came together. I have seen most of the guys in the hallways, recognized a few, know some by name, but didn’t really know them well because most of us work in different divisions. Now, as the Movember challenge winds down, we recognize each other in the hallways, comment on the progress being made or make friendly jests about progress not being made), and generally greet each other with a smile. Relationships are being formed – nascent ones, I’ll grant you, and based only on the willingness to try and grow facial hair and raise some money for a charity, but all relationships start somewhere.

And that is the point.. Someone with a bird’s eye view of the entire organization served as the catalyst that drew us together, regardless of where in the organization we worked.  Who can predict how this experience may pay dividends to the organization in the future, when an opportunity calls for us to work together on a new initiative.  Because of Movember, I met colleagues whom I did not already know, and may never have met without this experience.

Bottom Line:  Informal social projects can help create a sense of community, and that may help grow the organizational culture into one that is more collaborative, engaged, and fun.


The Supercircular is Coming, the Supercircular is Coming!

Grants News_Blog Image_130816In less than two weeks, the much discussed planned changes to Federal grants administration become reality. On December 26, 2014, 2 CFR 200 – Uniform Guidance: Uniform Administrative Requirements, Cost Principles, and Audit Requirements – will apply to all new Federal awards.  The Office of Management and Budget (OMB) and Federal awarding agencies are expected to release implementing regulations and additional guidance on or around the same day. To help you and your entity prepare for this exciting day, we created the Management Concepts Top 10 Important Items to Know about the Uniform Guidance.                  

  1. The Uniform Guidance, sometimes referred to as the “Supercircular or Omni Circular,” is found online at the electronic Code of Federal Regulations.
  2. The administrative requirements and cost principles in the Uniform Guidance will only apply to new awards issued on or after December 26, 2014 – or – to any funding increments made with modified terms and conditions. Grant recipients should always consult the Federal award document when in doubt to which requirements apply to their awards.
  3. All Federal awarding agencies will need to implement a pre-award risk assessment and comply with the merit review process outlined in 2 CFR 200.
  4. The recipient’s fiscal year drives when the Uniform Guidance for audits takes effect.  The table below shows a few examples of when your auditors will start following the updated rules.

    Fiscal   Year Dates

    Guidance   for Audit Requirements

    1/1/2014   – 12/31/2014

    OMB Circular A-133

    7/1/2014   – 6/30/2015

    10/1/2014   – 9/30/2015

    1/1/2015   – 12/31/2015

    Uniform Guidance

    7/1/2015   – 6/30/2016

    10/1/2015   – 9/30/2016

  5. You should carefully review the changes to procurement procedures, compensation for personnel services, and indirect (F&A) cost rate policies. 2 CFR 200 makes significant changes to each!
  6. The Uniform Guidance provides a list of specific responsibilities for pass-through entities.
  7. Non-Federal entities will have a full fiscal year grace period to implement the new procurement policies and practices under 2 CFR 200.
  8. Non-Federal entities will need to revise internal policies to define “gratuity violations” that could affect Federal awards.
  9. Non-Federal entities with awards under both 2 CFR 200 and previous guidance may, as of December 26, 2014, implement entity-wide system changes for all awards to comply with the Uniform Guidance.
  10. 2 CFR 200 requires non-Federal entities take reasonable measures to safeguard personally identifiable information (PII).

 It’s certainly an exciting time for the grants community!  Management Concepts looks forward to assisting with all your training needs, including delivery of our Federal Grants Update for 2015. Stay tuned for our Supercircular New Year’s Resolutions!

Want to Make Better Decisions? Ask Better Questions.

QuestionsWe’ve all heard the adage, “There’s no such thing as a bad question”… but let’s be honest – we have all been subjected to a question at some point that prompted a mental response of “Are you kidding me?!” This reaction is usually accompanied by rolling of the eyes, shaking of the head, feelings of disgust, and so on.

On the other hand, masterfully worded and perfectly timed questions have the ability to provoke deep thought, challenge previously held beliefs, reveal new unimagined solutions to problems, or even alter the mission of an entire organization. While the goal of most questions is typically not this lofty, it is worth taking into consideration the power that such a simple act can have.

The behavior of asking questions is something we figure out at a very young age. It comes quite naturally. However, asking effective questions that allow you to make informed decisions requires a bit more thought. Before formulating a question, make sure you consider 1) Purpose and 2) Audience.

  1. Purpose – why you are asking the question and what you hope to achieve with the results.

Always remember to focus on one topic at a time. Mixing purposes can be confusing to the audience and will lead them to provide inaccurate or inconsequential feedback. When you have a single, concrete purpose, the subject knows exactly what is being asked of them and can deliver the most precise information.

To start, you should be able to answer the following questions about yourself:

  • What do I need to know? Keyword being “need.” Avoid wasting others’ time by asking “nice to know” questions about things you will not act on.
  • How am I going to use this information once I have it? The decision or action being made should drive the line of questioning. Be certain of what you want to accomplish before initiating your inquiry.
  • What is the best way to obtain this information? Don’t always assume that the easiest way is the best way. An email or instant message may take less time and effort, but is often misinterpreted or even ignored. A phone call or face-to-face conversation demonstrates sincerity and can produce a more detailed, meaningful response.

Once you can answer these three questions, you should have a clearly defined purpose. For example, I want to find out the level of effort for a previous project in order to create an estimate for a project plan involving a similar task. To accomplish this, I will go talk to my colleague and see if he will send me the level of effort figures from his recent project.

  1. Audience – the target individual or group from whom you hope to gain a response.

Assessing your audience is a crucial prerequisite for any form of communication. You want to ensure the individual or group is comfortable providing information and is aware of how this information will be used.

Consider the following audience perspectives:

  • What motivates them to respond? You want to make it clear to the audience the reason you are asking for their feedback and what you plan to do with it.
  • How might they respond differently based on the question phrasing? Put yourself in the shoes of the interviewee and brainstorm ways in which the question could be misinterpreted. Your language should be as clear and concise as possible to obtain the desired response.
  • What is their competency level and/or willingness to provide information regarding the subject in question? Knowing this ahead of time is not a guarantee, but an assessment of your audience’s background can help identify whether they are the “right person” to go to.

Remember that this is a two-way exchange; the more you put in, the more you get out. When you’ve done your research to increase audience motivation and buy-in, it definitely shows. This is most important in non-face-to-face settings, such as emails, texts, or discussion boards. These forms of inquiry often fail to yield meaningful results because people feel disconnected. Good questions should simulate a conversation and prompt the respondent to share his/her experiences and ideas on a relevant topic.

Questions are universally critical to success across all organizations and roles. Not only do they help you gather new information, learn new skills, and establish new relationships, questions help enhance your credibility.

You’re not always going to hold all the answers, so knowing how to ask the right questions as well as who to ask will put you at a serious advantage. Get started on your way to knowing more and expanding your influence by asking better questions today!

Federal Acquisition Report: DoD Approves Use of a Blended Rate for Calculating Executive Compensation

repnov13.inddWith increasing public scrutiny of both high executive compensation and the performance of Federal contractors, Congress included in the Bipartisan Budget Act of 2013 a provision to lower the amount of executive compensation for which Federal contractors may be reimbursed.

The December issue of the Management Concepts Press Federal Acquisition Report explains how the DoD’s decision to allow contractors to use a blended rate will ease the transition to the lower cap.  Here’s an excerpt:

The Department of Defense (DoD) will allow contractors to use a blended rate to calculate executive compensation as the department transitions to a new reimbursement limit, according to a memorandum issued by Defense Procurement and Acquisition Policy Director Shay Assad. The use of blended rates is intended as a “practical and cost efficient solution” to ease the transition to a lower executive compensation cap, the memo provides.

Section 702 of the Bipartisan Budget Act of 2013 (P.L. 113-67) lowered the executive compensation cap—the maximum amount of contractor-paid executive compensation that the federal government will reimburse on cost-based contracts. The cap was reduced from $952,308 to an initial limit of $487,000 per year. The figure will be adjusted annually to reflect the change in the Employment Cost Index calculated by the Bureau of Labor and Statistics.

The new executive compensation cap was implemented in the Federal Acquisition Regulation through an interim amendment that applied the $487,000 cap to all contracts awarded, and cost incurred, on or after June 24, 2014.

In light of the challenges that will surely arise among contractors that hold contracts awarded both before and after June 24, the memorandum allows affected contractors to use a blended rate approach to calculate executive compensation. Each contractor would propose their own rate based on a calculation of the volume of contracts awarded before June 24 and on or after that date.

The directive emphasizes that contractors are not required to use the blended rate approach; those that choose otherwise may calculate executive compensation on each contract based on the applicable rate, or adopt the lower rate for all contracts regardless of award date.

Those who do wish to use the blended rate method will use an initial rate for interim billing that is based on the estimated cost breakdown; then, when establishing final overhead rates, a final rate will be calculated using the actual proportion of contract costs for the current year for contracts issued before and on or after June 24.

The memo specifies that contractors who employ the blended rate method must submit an auditable calculation of the blended rate. “An audit will ensure that only the total allowable compensation is billed to the government for the fiscal year based on the different authorized caps,” the memo reads.

Contractors must also execute an advance agreement under FAR 31.109 in order to use the blended rate method. The agreement will document the process to be used, the auditable data submission requirements, and an expiration date for the use of the blended rate.

The October 24 memorandum notes that the Defense Contract Management Agency (DCMA) will issue implementation guidance on the use of blended rates, in coordination with the Defense Contract Audit Agency (DCAA).

Note that the blended rate approach has only been approved for Department of Defense contractors and subcontractors. Contractors that hold contracts with other federal agencies must continue to apply the compensation caps applicable to each contract and subcontract, unless an agency specifies otherwise.

Excerpted with permission from the Federal Acquisition Report.  © 2014 Management Concepts Inc. All rights reserved.