Introduction to Government Contracting

Date October 30, 2023
Authors Elizabeth P. Becherer
Categories

Domestic manufacturers engaged in research and development activities may want to explore how their efforts can align with government needs. Contracting with the government can not only help fulfill these needs but can also provide manufacturers with a source of funding. This prospect is especially appealing to companies specializing in fields such as software, biotechnology, electronics, and various science, technology, engineering, or mathematics (STEM) disciplines, as these often align with government-funded opportunities.

APEX Accelerators, formerly known as Procurement Technical Assistance Centers, offer a valuable starting point for manufacturers looking to delve into government contracting, whether at the federal, state, or local level. These organizations, spread throughout the country, were established by Congress in 1985 to bolster private sector involvement in government contracts. Their programs facilitate the registration process for companies seeking to participate in the government marketplace, guiding them in identifying agencies and offices that may require their products and services. APEX Accelerators routinely receive notifications of contract opportunities, serving as a crucial link between companies and the government agencies they aim to serve. To locate your local APEX Accelerator, visit this link.

The Small Business Administration (SBA) offers two primary programs to promote domestic participation in federal government research and development projects: the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs To explore government agencies with contract solicitations, visit www.sbir.gov.

Agencies providing contracting opportunities include the Department of Defense (including the Air Force, Army, NASA, Navy, Marines, and more), as well as the Departments of Health and Human Services, Agriculture, Commerce, Energy, and Transportation, along with the Environmental Protection Agency.

If a manufacturer identifies a viable need for their product or service among the agency solicitations, they enter the first of three funding phases.

  • Phase I involves establishing the technical merit and potential of the proposed research and development efforts, as well as defining quality specifications before awarding funding. At this level, awards ranging from $50,000 to $250,000 are available for periods spanning six months to a year.
  • Phase II builds on the efforts and successful projects of Phase I, providing awards typically amounting to $750,000 for two years.
  • Phase III, where applicable, helps businesses pursue commercialization objectives.
  • Eligible small businesses participating in government contracting retain intellectual property rights to their contributions. It’s worth noting that SBA funds are not loans, and no equity is taken from the company by the SBA or any other agency.

    For more information on eligibility requirements and the necessary steps to consider, please visit www.sbir.gov. To discuss issues specific to your manufacturing company, contact a member of HBK Manufacturing Solutions at manufacturing@hbkcpa.com.

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    Reflections on National Association of Manufacturers Outlook Survey – Q3 2023

    Date September 29, 2023
    Authors Elizabeth P. Becherer
    Categories

    Though respondents to the National Association of Manufacturers’ (NAM) third quarter 2023 survey reported outlooks less favorable than in the previous quarter’s study, their insights highlight several industry strengths and forecasts to watch as 2023 comes to a close. Business owners in manufacturing facilities of all sizes expressed less concern than previously about the likelihood of a recession, and notably, said they expect increases in sales and production in 2024.

    In NAM’s 24-question poll, more than 300 respondents contributed to the data accumulated for survey insights. Overall, they demonstrated less enthusiasm about future business than they expressed in the previous quarter’s survey; however, their expectations still exceeded the uncertainty of pandemic levels. Much of their concern appeared to be a side effect of general economic challenges, such as inflation and workforce shortages. Nonetheless, consumer spending has remained resilient throughout recent quarters. With inflation gradually improving in many sectors apart from food prices and energy, a recession appears more distant to many manufacturers.

    The upcoming 2024 presidential election also has the attention of most respondents, as many fiscal and production decisions hang in the balance due to potential regulatory changes. Many manufacturers categorized the current business climate as “unfavorable,” with regulatory burdens influencing their decisions to delay capital spending and/or increases in compensation levels. Relatedly, most manufacturers expressed a desire to reduce these same regulatory burdens to hasten the approval process for new projects.

    On an optimistic note, respondents reported that many supply chain challenges from the prior year have begun to subside, evidenced in the fact that most who took the survey anticipate shrinking inventories in the coming year. With less supply chain uncertainty, manufacturers say they are continuing to reduce existing stock and instead are buying to meet demand as it surfaces.

    Respondents projected sales and production increases of roughly 2 percent for the coming year, which, the survey indicated, would likely be channeled to new capital purchases and further attempts to increase their workforces. The greatest production challenge in recent quarters, employers’ ability to attract and retain competent works, remains strained. However, quit rates have declined from the prior year and unemployment remains at a low, around 3.5 percent. Creative hiring processes and retention strategies, such as employee benefit plans, continue to be seen as keys to healthy production levels.

    Overall, the Q3 2023 survey highlighted many key issues for manufacturers to keep their eyes on going into 2024. Regulatory changes, cost inflation, and the workforce pool remain front and center concerns as healthy production levels continue.

    To read the Q3 2023 NAM Outlook survey, visit https://www.nam.org/2023-third-quarter-manufacturers-outlook-survey/. To discuss issues specific to your manufacturing company, contact a member of HBK Manufacturing Solutions at 330-758-8613 or manufacturing@hbkcpa.com.

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    Labor Shortages? Technology Could Be The Solution.

    Date December 8, 2022
    Authors Elizabeth P. Becherer
    Categories

    Manufacturers are no strangers to the staffing shortages in today’s economy. Though the industry added 349,000 workers in 2021, the most since 1994, baby boomers are retiring, leaving many positions requiring experienced employees open. The need to attract new workers and train existing employees for career progression is more pressing than ever. As pressing as the issue has become for many manufacturers, labor shortages present a unique opportunity to venture into automation and other new technologies that may previously have seemed daunting or unnecessary. With the advent of a new year and no sign of staffing vacancies abating anytime soon, software advances and robotics are two ways employers can fill the void.

    After evaluating which aspects of their businesses are most affected by labor shortages, manufacturers can start addressing the vacancies by identifying repetitive processes that could be candidates for automation. Materials handling and assembly are common tasks that robots can perform and free up time for existing employees to learn other skills. More recently, small to medium-sized manufacturers have also had success with “cobots,” robots that use sensors to work alongside employees in a collaborative setting. Cobots are more flexible than traditional robots when there are interruptions in work and programming, and thus are often more cost-effective.

    For businesses where robotics are not applicable, software advances are another way to increase efficiency and free up time for employees. Enterprise Resource Planning (ERP) solutions use software to customize and automate daily activities like projection management, bookkeeping, and human resources. Though implementation of such systems will never be without challenges, ERP solutions ultimately allow workers to advance more easily into supervisory roles. Furthermore, programs like Ohio’s TechCred can also provide support with funding for training employees on business technologies.

    In addition to training reimbursement programs like TechCred, incorporating new technology into business processes provides opportunities for federal and state research and development (R&D) credits. Improving efficiency and safety through automation are key examples of qualifying activities and can offset R&D expenses by 20 percent or more.

    For many employers struggling to fill open positions, 2023 could be the year to tackle these challenges with creative technological solutions.

    For more information on manufacturing issues like R&D credits and implementing ERP systems, contact a member of the HBK Manufacturing Solutions team. Email us at manufacturing@hbkcpa.com, or call us at 330-758-8613.

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