CPAs and Advisors with Your Growth in Mind

Congress Extends Size Computation Period for Revenue Based Size Standards to Five Years

For government contracting purposes, there are two tests for determining whether a concern is a small business, a revenue test and an employee test.  For the revenue test, SBA rules (13 CFR §121.104) have required that a concern’s size status be determined by the average revenue of the concern and all its affiliates for the last three fiscal years of the concern.  This revenue test was based on a section of the Small Business Act, 15 U.S.C. §632, which provides in part that no Federal department or agency may prescribe a size standard for categorizing a business concern as a. Read More.

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Important New Acquisition Provisions in the 2019 NDAA

By: Eric Poppe , Senior Manager The John S. McCain 2019 National Defense Authorization Act (“NDAA”) was signed into law on August 13, 2018. It includes several broad provisions on acquisitions and compliance for both the Department of Defense and the overall Federal government. Below are some key provisions that impact contractors. Under Section 820, the Secretary of Defense is now required to submit a new report to congressional defense committees. This report will provide definitions of service contracts, as well as outline the policies, roles and procedures for individuals involved in the acquisition of services. Section 822 requires the Secretary of. Read More.

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Important New Cyber Provisions in the 2019 NDAA

By: Curt Smith , Manager and Neal Beggan , Principal The National Defense Authorization Act for Fiscal Year 2019 (“NDAA” or “the Act”) was signed into law on August 13, 2018. The 2019 NDAA includes several broad provisions on cybersecurity that will interest government contractors. Generally, the Act in Section 1636 establishes a more aggressive policy on cyberspace, cybersecurity, cyber warfare, and cyber deterrence stating that the U.S. should “employ all instruments of national power, including the use of offensive cyber capabilities, to deter if possible, and respond to when necessary, all cyber attacks or other malicious cyber activities of foreign powers that target. Read More.

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Section 199A: Detailed New Proposed Regulations and Their Impacts on Government Contractors

By: John Carpenter , Principal and Rick Schneider , Partner The Treasury Department and the Internal Revenue Service recently issued proposed regulations on the new Section 199A pass-through deduction created by the Tax Cuts and Jobs Act, available for tax years beginning after December 31, 2017, and before January 1, 2026. Section 199A is a wholly new regime established to generate a non-cash tax deduction to alleviate the disparity between the 37% individual tax rate and the new 21% corporate tax rate. Section 199A permits a deduction of up to 20% of qualified business income (“QBI”) from a domestic pass-through business, plus 20% of. Read More.

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SBA Issues Amendments and Clarifications of Regulations

The U.S. Small Business Administration (“SBA”) amended its regulations to incorporate a provision of the National Defense Authorization Act of 2018 (“NDAA 2018”) and to update and provide technical corrections to SBA’s current regulations. The rule was issued on March 26, 2018, and became effective on May 25, 2018. The NDAA 2018 amended the Small Business Act by replacing the fixed dollar amount thresholds with references to the micro-purchase and simplified acquisition thresholds contained in the FAR. The NDAA 2018, signed into law by President Trump on December 17, 2017, now defines the micro-purchase threshold for products as $10,000; a. Read More.

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So You Think You Are Ready for Due Diligence?

At the stage of a company’s development where it is advantageous to think about the sale of all or part of the business to a financial or strategic buyer, management teams are generally prepared to undergo a certain amount of due diligence from the buyer organization. Government contractors expect to undergo close examination of their accounting records, contract files, HR files, legal contracts, and other files and records. Many government contractors do not think that their tax files and practices will present areas of great concern, but often these areas can lead to unpleasant surprises for selling organizations. Specifically, here. Read More.

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