Case Study: Federal Resources Corporation

Professional Services Provider Automates Government Incurred Cost Submissions with SYMPAQ’s Integrated ICE Link

Starting a new business is always risky, especially in the crowded industry of providing professional services to the government. So when the management team of Federal Resources Corporation (FRC) founded the company in 1998, they knew they had to put the right infrastructure together to make this new business a success. They had an ambitious goal – to provide top notch assistance primarily to government agencies in professional disciplines such as strategic planning, accounting and financial services, IT services, management support services and engineering services. They already had extensive experience and expertise in providing this type of government support services and more than their share of industry expertise and contacts. Additionally, they knew that with the right set of professionals and the right, highly principled business methodology, they would be able to create a winning venture. Today, with numerous successfully fulfilled contracts and many more ongoing, FRC has proven to be the thriving business the management team had hoped it would be.

DCAA Compliance

Case Study: Federal Resources CorporationWhile an excellent professional staff, vast experience and extraordinary government and industry contacts are helpful to starting a business, having the right tools to make the business work is critical as well. From the FRC management team’s previous experience and their knowledge of the professional services industry, they were aware that a well-suited cost accounting solution that could guarantee successful DCAA (Defense Contract Audit Agency) audits was a must-have for FRC. Besides being DCAA-compliant, whatever cost accounting solution FRC selected had to be appropriate for the size and function of their company – and a good cost value. It would be used to track all the direct and indirect costs associated with conducting government contracting and be the base from which the company could capture their incurred costs for each contract.

Considerations and the Evaluation Process

As a small 8(a)-certified government contracting business, FRC had to succeed not only in the services it delivered, but also in accounting for the work of its professional staff – for their internal use and to bill the government for incurred costs. Additionally, the team had to have the confidence that, should they be audited by the DCAA, they would come through the audit with flying colors. As a result of their nine previous years of experience with the SYMPAQ cost accounting solution, made by Aldebaron, Inc., the FRC team was confident it would be an asset to the success of the firm. They knew it would guarantee success in any audit and would provide the company with an excellent value. After the team gave serious consideration to a few different solutions, they selected the one they knew would suit their short-term and as well as immediate-term needs – SYMPAQ.

When FRC was founded in 1998, the team was considering the implementation of a cost accounting system and also putting together their proposal for a substantial Cost-Plus Fixed Fee (CPFF) Navy contract. As part of their government proposal, FRC had to demonstrate to the client that they had the policies and procedures to manage the potential contract, and the systems that would pass a DCAA audit. That’s when the team embarked on the process of reviewing various cost accounting systems and selecting SYMPAQ. FRC successfully demonstrated their accounting to the client and won their first Navy contract in 1999.

A Major Time Saver – Automatic Linking of Accounting Data into ICE Format

One concern with which most government services providers must contend is the large amount of time required to input accounting data into the specific spreadsheet format required by the government for all cost-plus contracts – ICE (Incurred Cost Electronically). Most accounting systems cannot link general ledger data to spreadsheets because it is a complex process. Not long ago, however, Aldebaron introduced a new standard feature into its SYMPAQ solution that does just what government contractors like FRC need. By integrating a package called F9 into SYMPAQ, the software now has the capability to automatically export general ledger data to the ICE format.

FRC is highly successful and SYMPAQ has gotten us where we are today.”

Paul H. Jacobs, Senior Vice President, Chief Financial Officer, Federal Resources Corporation

FRC was an early adopter of this ICE capability and have realized great time savings as a result. Julie Wheeles, FRC’s Controller explained, “Before we had this capability, I had spreadsheet templates that I had personally spent a great deal of time creating a few years ago. When FRC got its first cost-plus contract, I had to use these to move our data into ICE. With them, it took about 10 days to get everything done, much of that time spent re-keying data and checking to make sure there were no mistakes. If I didn’t have those templates, I couldn’t imagine how long the process would take – probably weeks and weeks. And now that we’ve implemented the new linking capability in SYMPAQ, once everything was set up and ready to fly – mostly one-time set up operations – the actual linking of the data from SYMPAQ into ICE took a matter of minutes. I still spent about half a day checking the data, but that’s nothing compared with typing all the data or even using my personal spreadsheet templates.” Paul Jacobs, Senior Vice President and Chief Financial Officer of FRC, added, “I think the ICE module is quite good. We have found it to be a very important addition to our SYMPAQ system.”

Profitable Results

Making a profit when your company is primarily in the business of government contracting is a delicate matter. There are strict rules and guidelines by which all government contractors must comply – or risk long-term or permanent cancellation of all contracts. Although the DCAA audits contractors to ensure they adhere to the rules, FRC has always made a point of operating strictly by-the-book, while still significantly increasing their profits year after year. “I couldn’t have foreseen this increase and have the confidence that we have properly accounted for all costs without SYMPAQ,” Paul stated. “I know that everything is what it should be and I’m willing to sign my name to it as a CFO – with confidence,” he continued.

Audits are not a novelty to FRC. They regularly conduct self-audits, generally on a daily or weekly basis. “We have gone through two DCAA accounting audits and three outside independent industry audits by a CPA firm – in 2002-2009, 2003 and 2004 – based on the SYMPAQ system. The fact that an outside CPA will sign his name to his audit of FRC – that’s pretty impressive,” Paul stated.

Today’s Situation

“FRC is highly successful and SYMPAQ has gotten us where we are today,” Paul explained. With over 50 employees, most of whom are actively providing important services to government and commercial clients, FRC is profitable, significantly increasing their revenue every year resulting in a truly success story.