2021 GAUGE SNEAK PEEK REVIEW - Presented by: Christine Williamson, Partner, CohnReznick LLP Rich Wilkinson, Director, Unanet
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2021 GAUGE
SNEAK PEEK REVIEW
• Presented by:
Christine Williamson, Partner, CohnReznick LLP
Rich Wilkinson, Director, Unanet
•
BEFORE WE BEGIN
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PLEASE READ Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax- related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or Implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on It. 3
MEET THE PRESENTERS 4
Sneak Peak
Preview for
your eyes
only!!
2021 REPORT
Creating A Winning
Proposal
Change cover/add color
5TH EDITION
Industry Roadmap of Benchmarks and Trends for Government
Contractors
Why should companies consider benchmarking as part of their business strategy? What exactly is the GAUGE Report? How is the information gathered annually? What sets the GAUGE apart from other surveys?
What is the GAUGE, and why do we do it?
GOVERNMENT CONTRACT COMPLIANCE
ACCOUNTING
UTILIZATION
GROWTH
EFFICIENCIES
Survey respondents fell into four
broad categories based on company
revenues:
Up to $10M, >$10M-$25M,
>$25M-$50M, and >$50M
GAUGE 2021 7
Why is this Survey Unique?
To benchmark your The GAUGE is theme based:
organization against 2017 – Budgeting Strategies
fact-based data 2018 – Small to Large/Sub to Prime
2019 – Internal Controls Best Practices
2020 – Leveraging Technology
Crystal Ball – looking 2021 – Creating a Winning Proposal
forward and backward
Report is broken down
into 5 categories
GAUGE 2021 8
Use Internal and External Benchmarks
Benefits of Benchmarking
Gives a perspective of Makes you more competitive
the overall industry
Helps you win more business
Provides an understanding of and grow your organization
what others are doing
to be successful
Produces ideas
for improvement
GAUGE 2021 9
Report Highlights
Government contractors are constantly looking for work and there is lots of it, so
that’s why our respondents were 71% optimistic.
Personal relationship with partners and customers 88% Very Optimistic 19%
Market intel tools (FedBizOpps, GovWin, Fedmine, Pulse, etc.) 68% Cautiously Optimistic 52%
Public notices 18% Neutral 21%
Virtual events and conferences 18% Somewhat Pessimistic 6%
Google searches 3% Very Pessimistic 2%
Industry reverse days 2%
Other 3%
GAUGE 2021 10Report Highlights
But GovCon’s worry too about the budget and funding constraints, cost of compliance,
and lack of qualified talent.
What issues are the most concerning to your GovCon organization currently?
GAUGE 2021 11Report Highlights
What issues that “keep you up at night” have dramatically changed from 2020 to 2021?
Issues that “Keep you up at Night”
Increasing Competition for Contracts 26% 23% 12% 12% 10% 7% 7% First
Resource Recruiting / Retention 18% 15% 20% 12% 11% 13% 9% Second
Operational Efficiency 13% 18% 15% 14% 16% 13% 10% Third
Fourth
Overall Economy 9% 14% 13% 16% 16% 19% 11%
Fifth
Cybersecurity 11% 9% 15% 19% 16% 17% 12%
Sixth
Political Environment 10% 10% 15% 14% 16% 14% 19%
Seventh
COVID Pandemic 8% 9% 8% 12% 14% 16% 31%
> Seventh
0% 20% 40% 60% 80% 100%
GAUGE 2021 122020 & 2021 - Unprecedented Years in Our Lifetime
ESG, infrastructure,
tax increases, work
from anywhere,
inflation………
what's next?
GAUGE 2021 13Government Contract Compliance
For which of the following does your company provide annual
training? (select all that apply)
Code of Conduct
16% are not providing any of
these annual trainings
71%
2018 2020
Conflict of Interest 59% 21% ESG Programs
Conflict of Interest 53% 65%
Code of Conduct 82% 81%
Unallowables 25% 34%
2021
Whistleblowers 34% 45%
Business Systems - 46% Diversity and Inclusion 53% 23% Unallowables
Business Systems 41% 36% Whistleblowers
GAUGE 2021 15What was the amount of questioned costs from your
company’s last Incurred Cost Submission?
Amount of Questioned Costs From Last Incurred Cost Submission
2021 80% 10% 4%5%
>$100K in Costs
2020 67% 13% 9% 12% $50K -DCAA Audits
Incurred Cost Submission is the most common DCAA audit endured among respondent
companies last year, followed by Accounting System/Post Award and Pre-Award
Accounting/SF1408.
DCAA Audits
(Select All That Apply)
Incurred Cost Submission 26%
Accounting System/Post Award 17%
Pre-Award Accounting/SF1408 16%
Proposal 14%
Forward Pricing 9%
Labor Floor Check 9%
CAS 5%
Property System 5%
Purchasing System 5%
Estimating System 5%
MMAS 2%
Defective Pricing 2%
Earned Value System 1%
Which of the following DCAA Audits did your company endure last year?
GAUGE 2021 17Which business systems do you anticipate being point winners
on recent or upcoming RFPs?
Business Systems Anticipated as Point Winners for Recent/Upcoming RFPs
(Select All That Apply)
Accounting System/Post Award 62%
Pre-Award Accounting/SF1408 49%
Estimating System 27%
Purchasing System 25%
Earned Value System 19%
GAUGE 2021 18Audit Challenges
Rates followed by Timekeeping are the top audit challenges respondents’ companies faced
last year.
Most Significant Audit Challenges
Rates 40% 24% 15% 12% 7% 3% First
Timekeeping 23% 22% 22% 15% 13% 4% Second
Billing 10% 22% 23% 23% 15% 7% Third
Unallowable Expenses 7% 16% 19% 26% 22% 10% Fourth
CAS Compliance 13% 9% 10% 14% 11% 44% Fifth
Executive Compensation 7% 6% 11% 10% 31% 34% Sixth
0% 20% 40% 60% 80% 100%
Rank the following audit challenges for your company from the most to the least significant last year.
GAUGE 2021 19Accounting
What is your approximate Days Sales Outstanding (DSO)?
Days Sales Outstanding
1% 6% 4% 8%
8%
32% 24% 23% 16%
60 More than 60 Days
16%
46-60 Days
45 36%
41% 43%
36% 31-45 Days 39%
30
15-30 Days
28% 28%
15 Less than 15 Days 29% 24%
28%
12% 12%
5%
DAYS 2018 2019 2020 2021
GAUGE 2021 21Invoice Cycle
One-third of respondents have an average invoice cycle of between 6 and 10 days.
What is your average Invoice Cycle in days (last day of the month until the last invoice is out the door)?
GAUGE 2021 22Financial
Rank the following financial challenges for your company from the most to least
significant challenges.
Most Significant Financial Challenges
Organic Growth 30% 24% 22% 11% 9% 3% First
Uncertain Federal Spending 29% 16% 16% 17% 13% 8% Second
Increasing EBITDA 18% 21% 24% 17% 13% 7% Third
Cash Flow 11% 19% 14% 20% 18% 17% Fourth
Executive Alignment 9% 15% 15% 19% 14% 28% Fifth
Managing Invoice Process 2%4% 9% 15% 32% 37% Sixth
0% 20% 40% 60% 80% 100%
GAUGE 2021 23CARES Act Funding
Two-thirds of respondent companies received funding from the Payroll Protection
Program. How will these affect your indirect rates if at all?
Respondents by CARES Act Funding
(Select All That Apply)
Payroll Protection Program 66%
FFCRA 19%
Employee Retention Credit 16%
3610 Funding 10%
Social Security Deferral 7%
EIDL 5%
What sort of CARES Act funding did your company receive?
GAUGE 2021 24Which of the following do you use as a basis for your
overhead rates?
Primary Revenue
2020 Annual Revenue NAICS Code
Source
Other
Comp. Mgmt/Sci/ Scientific Prof/Sci/
$0 - $10 - $25 - Aerospace & Archt Systems Tech Research Tech
Total $10M $25M $50M > $50M Gov. Comm. Mfg & Engr Design Consult. & Dev Svcs.
Location 34% 33% 37% 35% 33% 37% 18% 30% 57% 23% 38% 42% 41%
Function 29% 23% 28% 35% 33% 30% 25% 50% 13% 38% 20% 21% 30%
Product/Service 22% 28% 23% 6% 22% 18% 39% 10% 22% 21% 36% 11% 15%
Customer 9% 3% 11% 16% 9% 10% 4% 0% 4% 13% 4% 21% 11%
Standard Costing
7% 13% 2% 6% 4% 5% 14% 10% 4% 4% 2% 5% 4%
(Manufacturers)
GAUGE 2021 25Utilization
What change in your company’s workforce size do you expect in
the upcoming year?
Expected Change in Workforce Size
(Select One)
We will increase it significantly 24% 28% 24%
33%
40%
Increase Significantly
We will increase it slightly 53%
Increase Slightly
53%
Remain the Same 44% 52%
It will remain the same 19%
49%
Decrease Slightly
We will decrease it slightly 4%
Decrease Significantly
19% 18% 19%
11%
4% 4%
We will decrease it significantlyRank your human resource challenges in order from the most
to least significant.
Recruiting 38% 27% 14% 14% 5% 3% First
Positions Unfilled 20% 24% 15% 17% 14% 10% Second
Compensation 13% 23% 27% 22% 11% 4% Third
Management Skills 15% 15% 24% 24% 16% 5% Fourth
Remote Work Policies 5% 9% 12% 14% 41% 19% Fifth
Aging Workforce 8% 3% 8% 8% 14% 59% Sixth
0% 20% 40% 60% 80% 100%
GAUGE 2021 28For each of the following functions, list full-time equivalent
(FTE) headcount.
Primary Revenue
2020 Annual Revenue NAICS Code
Source
Other
Archt Comp. Mgmt/Sci Scientific Prof/Sci/
$0 - $10 - $25 - Aerospace & Systems / Tech Research Tech
$10M $25M $50M > $50M Gov. Comm. Mfg Engr Design Consult. & Dev Svcs.
Total (A) (B) (C) (D) (A) (B) (A) (B) (C) (D) (E) (F)
Business Development 4.4 1.6 2.9 5.5 9.2 4.2 5.3 7.7 3.3 4.1 4.2 3.2 3.4
Accounting 4.3 1.7 2.5 4.2 9.9 4.2 4.8 6.7 4.5 2.9 3.6 3.2 2.9
IT 3.7 1.2 1.9 4.5 8.5 3.7 4.2 6.3 2.8 3.3 3.0 2.6 2.6
Project Controls 3.3 1.0 2.0 4.4 7.3 3.2 4.0 5.5 2.6 2.4 3.2 1.5 2.4
Human Resources 2.9 0.8 1.7 2.6 7.4 2.8 3.0 5.2 2.6 2.0 2.2 2.2 1.9
Contracts 2.8 1.0 1.6 2.2 7.1 2.9 2.5 7.4 2.3 1.5 2.4 2.1 2.0
Recruiting 2.3 0.5 1.4 2.3 5.8 2.3 2.1 3.9 1.3 2.0 2.2 1.2 2.0
Compliance 1.8 0.8 0.7 1.7 4.5 1.6 1.9 4.5 0.9 0.8 1.5 1.0 0.9
Legal 1.3 0.2 0.2 1.0 4.4 1.2 1.3 3.3 0.3 0.4 1.3 0.2 0.7
Internal Audit 1.1 0.3 0.3 0.6 3.5 1.0 1.0 3.1 0.1 0.3 0.9 0.3 0.6
GAUGE 2021 29Growth
Win Rates – Actual and Projected
One-third of companies won 25% or less of the contracts they bid on in the past 12
months. Some are optimistic their win rate will climb over the next year.
Actual Win Rate Over Past 12 Months Projected Win Rate Over Next 12 Months
76 - 100% 7% 76 - 100% 6%
51 - 75% 18% 51 - 75% 25%
26 - 50% 43% 26 - 50% 51%
0-25% 32% 0-25% 18%
What is, or do you project, your proposal win rate to be over the following time periods?
GAUGE 2021 31Importance of pre-RFP activities from a business development
standpoint?
Concentrating on key differentiators 31% 29% 25% 10% 5% First
Second
Aligning win themes throughout the project stakeholders 22% 23% 19% 19% 16%
Third
Completing a SWOT analysis 18% 16% 18% 23% 24%
Fourth
Preparing features/benefits/proof points 14% 20% 23% 28% 14%
Fifth
Focusing on cost saving or efficiency improvements 14% 10% 15% 20% 41% > Fifth
0% 20% 40% 60% 80% 100%
GAUGE 2021 32Which of the following capture challenges do you plan to
address this coming year?
(Select All That Apply)
Target smart – upfront vetting of new opportunities 65%
Look early and often for partners to team with 57%
Push more resources to our business development and capture teams 49%
Develop a clearer understanding of bidding strategy 48%
Look for a mix of commercial and government work 31%
Purchase (or start using) a CRM/Proposal automation tool 13%
Look at less crowded agencies 10%
Other 2%
GAUGE 2021 33Capture/Gate Process
Almost half don’t have, or know if they have, a formalized capture or gate process for
federal proposals within their organization.
Formalized Capture/Gate Process for Federal Proposals
(Select One)
Yes 56%
No 34%
Don’t know 11%
Do you have a formalized capture or gate process for federal proposals that is followed within you organization?
GAUGE 2021 34Efficiencies
What is your organization’s average indirect rates year over year?
Indirect Rates
2018 2019 2020 2021
Fringe Rate 27%
Fringe Rate 35% 33% 32% 27%
Overhead Rate for Contractor Sites 25% Overhead Rate for
33% 36% 33% 25%
Contractor Sites
General and Administrative Rate 19%
General
17% 17% 17% 19%
Administrative Rate
Overhead Rate for Customer Sites 17%
Overhead Rate for
28% 26% 23% 17%
Customer Sites
Material/Subcontractor Handling Rate 4%
Material/Subcontrac
12% 4% 4% 4%
tor Handling Rate
Wrap Rate without Fee = 1.81
Wrap Rate without
1.97 1.98 1.93 1.81
Fee
GAUGE 2021 36Indirect Rates – By Revenue and NAICS
Primary Revenue
2020 Annual Revenue NAICS Code
Source
Mgmt/Sci Scientific Other
Comp. i/ Tech fic Prof/Sci/
$0 - $10 - $25 - Aerospac Archt & Systems Consult. Research i/ Tech
$10M $25M $50M > $50M Gov. Comm. ce Mfg Engr Design . h & Dev Svcs.
Total (A) (B) (C) (D) (A) (B) (A) (B) (C) (D) (E) (F)
Fringe Rate 27% 26% 28% 24% 29% 28% 19% 25% 22% 26% 30% 31% 28%
Overhead Rate for
25% 18% 30% 37% 20% 24% 28% 23% 43% 16% 23% 33% 31%
Contractor Sites
Overhead Rate for
17% 13% 21% 21% 16% 16% 21% 14% 33% 12% 17% 20% 15%
Customer Sites
Material/Subcontractor
4% 5% 3% 3% 3% 3% 9% 5% 2% 3% 3% 2% 3%
tor Handling Rate
General Administrative
19% 21% 22% 20% 11% 19% 20% 15% 23% 19% 21% 19% 19%
Administrative Rate
Wrap Rate without Fee
1.81 1.74 1.93 1.93 1.65 1.81 1.76 1.70 2.03 1.69 1.85 1.95 1.89
Fee
GAUGE 2021 372021 Theme: Creating a Winning Proposal
7 Key Steps to a Successful Proposal
1. Make Effective Bid/No-Bid 5. Assemble a Winning Team
Decisions • Select subs and partners that are
• Perform a SWOT analysis differentiators
2. Research and Influence the 6. Perform Price to Win Analysis
Opportunity • Creative pricing can help make the
difference
• Review RFP requirements and request
changes 7. Support the Proposal Team
3. Develop a Sound Win Strategy • Management and other buy-in on
responsibilities
• Use Green, Red, and Gold Team review
process
4. Conduct a Competitive Analysis
• 12% say they assess the competition
well
GAUGE 2021 39How many proposals does your company prepare in a 12
month period?
Average Number of Proposals Prepared in 12 Month Period
23
20 19
Major Contracts (BPA, Task Orders Modifications
IDIQ, GWAC, etc.)
0-25% 10 11 10
Win Rate
26-50% 34 27 23
51%+ 19 18 22
GAUGE 2021 40To what extent are each of the following a challenge for your
company in preparing proposals?
Challenges Preparing Proposals
18% 24% 30%
Not a Challenge Currently
53%
Somewhat of a Challenge 54%
56%
Significant Challenge
30% 22% 14%
Too little communication with Unrealistic timelines Lack of clarity about
the customer or contracting from opportunity to proposal what the project
officer due date scope is
GAUGE 2021 41How well do you think your organization does assessing the
competition during bids?
How Well Organization Assesses Competition During Bids
Excellent 12%
Good 45%
Fair 36%
Poor 7%
GAUGE 2021 42What else didn’t we tell you about the 2021 GAUGE?
GAUGE 2021 43Now………lets preview our benchmark tool.
www.gaugebenchmarking.com
Download the 2021 GAUGE Report
via the resource widget on your
console.Christine Williamson, CPA, PMP Access to the 2020 GAUGE REPORT CLICK HERE Partner CohnReznick LLP Christine.Williamson@cohnreznick.com (703) 847-4412 Rich Wilkinson Director, Product Marketing Unanet rwilkinson@unanet.com (703) 429-1831 Thank you from CohnReznick and Unanet.
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