RSM builds on trust to get a federal construction contractor bid-ready

The U.S. federal contracts market presents an attractive business opportunity for construction contractors, especially amid the current focus and spending on infrastructure, but there are requirements to win the work. To bid on a cost-based government construction project, contractors must verify they have an adequate accounting system to ensure compliance with applicable project costing, timekeeping and cost-allowability requirements.

When an Engineering News-Record Top 400 middle market construction contractor with significant government revenue needed an independent third-party assessment of their accounting system to pursue a large cost-reimbursable contract, the CFO knew it was critical to work with the right team of advisors. His long-standing relationship with RSM US LLP for tax advisory and other consulting services led him to inquire about the firm’s capabilities in this area, and he was pleased to learn RSM provides government contracting consulting with an industry focus.

“We have always had stellar, best-in-class guidance from RSM and a very well-established relationship with our lead advisor, so we trusted that he would bring us quality people,” the CFO says.

While the contractor had been in compliance with accounting system requirements for some time, their certification was dated and a more recent assessment was a prerequisite for bidding on a critical target contract.

Government contracting regulations are mandatory across industries; however, applying the right sections based on contract type and acquisition method and the correct supplementary standards depending on the government agency involves a level of complexity and nuance that requires more than technical skill. Industry and market knowledge can be the key to avoiding a compliance misstep, which is why the CFO wanted an experienced provider.

“We wanted a team that would invest the time to understand our business and have the flexibility to design a solution that fits an organization of our size and ownership structure, not a predetermined template,” the CFO says. “We may not be some large publicly traded company, but our standards are just as high; our expectations are just as high.”

Staying ahead of the curve

RSM thoughtfully assembled a team of advisors with hands-on government contracts market experience and construction industry knowledge to perform the assessment and provide gap analysis and remediation if needed. They recommended areas of improvement based on industry-leading practices, detailing how the improvements would seamlessly fit with the organization’s current system while protecting business value in case of a government audit.

An inadequate accounting system for a federal contractor could lead to financial losses and reputational damage and create issues when bidding on future projects. Aware of these risks, the CFO wanted to ensure his finance and compliance teams remained current in cost accounting standards and system requirements and on regulatory changes and government audit trends.

RSM tailored a training program to address these needs using a people-centered pragmatic approach that included on-site instruction and Q&A sessions to answer staff questions. Additionally, an RSM advisor presented virtual training on cybersecurity.

“RSM advisors provided us with practical options to achieve 100% compliance certainty, without introducing processes that would be overly bureaucratic. Flexibility makes all the difference when you are trying to persuade an organization to embrace change,” the CFO says.

Having received government approval for their accounting system, the contractor can continue to bid on any cost-reimbursable federal prime contract and subcontract opportunity. Knowing that protecting the business from regulatory noncompliance is an ongoing commitment, the CFO is working with RSM to set up a suitable cadence for future assessments and internal training. Meanwhile, his teams have ready access to RSM advisors for help in navigating government contracts market complexities should they arise.