Source: Winvale – GSA Schedule Blog
Source: Winvale – GSA Schedule Blog
Source: Winvale – GSA Schedule Blog
Are you a government contractor using QuickBooks? Do you struggle with tracking GSA’s Industrial Funding Fee (IFF)? QuickBooks is not set up to track GSA’s IFF. However, features within the system can assist in making this task painless.
Let’s first define what GSA’s IFF is. GSA’s Industrial Funding Fee (IFF) is a fee paid by government contractors to the GSA to cover GSA’s cost of operating the Federal Supply Schedules program. The fee equals .75% of your total GSA sales (government sales made through a GSA Schedule Contract) and it is paid every quarter to GSA. There are two processes that can be used to accurately report the IFF to GSA.
The first method is to create a report, but building reports within QuickBooks can be difficult. Once the report is developed, reporting the IFF can take a few minutes. First, we will look at the method that works for a government contractor reporting on an accrual method under the GSA Schedule Contract. This method is straightforward but requires updating the report every time a new contract is awarded. Go to Reports→ Sales by customers’ → Customize Reports → Filters → Name → Select Multiple Names and then select the names of the customers you need to report the IFF on. Finally, you will want to memorize the report and update it with new customers when new contracts are awarded.
The second method is not as difficult and has worked very well for my company, Winvale, a reseller of IT solutions to federal, state and local governments. We report our IFF on the cash receipts basis (you are allowed to use this methodunder the accrual method of reporting). We useour Profit and Loss statement, change it to a cash basis by quarter and export this report to Excel. Once the report is exported to Excel, we take advantage of the pivot table function and create pivot tables by name and SIN category and we are done!
These reports will work for many of the government contracts but not all. If you are dealing with a cost reimbursable contract, DCAA requires your accounting system to be compliant with their guidelines found on their website during the pre-award stage of the contract. While QuickBooks alone is not DCAA compliant, together with integrated time capture and reporting tools, it can be DCAA compliant. Intuit does not offer any products to make QuickBooks DCAA compliant. However, there are some third party tools and resources available on the internet that can be researched and explored to determine best appropriate tool to make QuickBooks DCAA compliant.
If you are diligent and put in the necessary effort, you may find that your QuickBooks can be adapted for all types of government contracts.
For contractors offering products and/or services to the government through the General Services Administration’s (GSA) and Veteran’s Affairs (VA) Multiple Award Schedule program, keeping up with Industrial Funding Fee (IFF) payments is a critical component of GSA contract compliance and contract maintenance. Government agencies prefer to procure through the MAS program and incur the IFF because of the resulting benefits, particularly compared to the cost of the customer staff time needed to award a new procurement. By selling through GSA’s Multiple Award Schedule and paying the IFF, GSA & VA contractors will have easier payment options, hassle-free volume purchase prices, flexible purchasing options, and no order limitations among additional benefits.
The Industrial Funding Fee is a fee to cover GSA’s cost of operating the Federal Supply Schedules (FSS) program. This fee is a fixed percentage of reported sales under GSA &VA Schedule contracts that is paid quarterly by contractors. The IFF on Schedule 599 for Special Item Number (SIN) 599-2 is $1.50 per transaction. The IFF for all other SINs and Schedules is 0.75% of sales. The IFF is included in the price that government agencies pay the contractor when they purchase items from a MAS contract. Quarterly IFF reporting and payments are due by the 30th day of January, April, July, and October. Contractors must still report sales for each quarter even if no sales occur by entering “zero” (0) in the sales report. To avoid overpayment, it is important that the contractors only report sales for products or services on their Awarded GSA Pricelist to avoid overpayment of the IFF and ensure accuracy. Contractors can only send the IFF payment after sales have been reported. Once sales are reported, the IFF payment can be made by check, electronic funds transfer, or credit card. For more information on how to make an IFF payment online in the 72A Quarterly Reporting System, visit the instructions page.
As the first quarter of Fiscal Year 2014 (FY2014) is wrapping up and the year’s first Industrial Funding Fee payment is due January 30th, MAS contractors should be preparing to report their first quarter sales and make the necessary IFF payment to remain in compliance with their contract. Making quarterly IFF payments is only one factor in GSA contract compliance. To learn more about IFF compliance, you may want to consult with MAS contracting professionals and verify that your firm is not overpaying or underpaying this required fee.
GSA contractors can mail their IFF Payments to the mailing address listed below,
Industrial Funding Fee Mailing Address
General Services Administration
ACCOUNTS RECEIVABLE BRANCH (6BCDR)
P.O. Box 979017
St. Louis, MO 63197-9017
If you are a contractor that provides products and/or services to the Federal government through the General Services Administration (GSA), it is important to know how the shutdown impacted the GSA and ultimately your company. Since the Federal government was partially shutdown for 16 days, many government services and agencies were closed, suspended, or impacted in certain ways.
Until congressional leaders and the President reached an agreement on a resolution to reopen the government, a significant number of government services and agencies were affected by the shutdown. During any government shutdown, only governmental functions and employees deemed to be essential to government activity continue to operate. GSA is a non-appropriated agency and the Federal Supply Schedules (FSS) branch of the GSA is supported by the Industrial Funding Fee (IFF), so the shutdown did not affect them to the same degree as many as other agencies. However, some areas of GSA that were affected during the Federal government shutdown included the legal and technical teams.
GSA provides over 12 million products and services necessary for other agencies to better perform their missions. If a contract was fully obligated before the shutdown and the goods or services were still required, the contract remained in full effect and no additional actions were required. However, GSA did not accept any new orders for these products or services, so there is currently a backlog of unprocessed orders. If the contract was for recurring services, contracting personnel had to verify whether the goods and services were needed at the same levels during a shutdown of government operations and could have issued a stop work order or termination for convenience (full or partial). It is the duty of GSA Contractors to work with the government to continue work once more on these recurring GSA contracts. The websites USA.gov and GobiernoUSA.gov remained available during the shutdown but were not updated, except in emergency situations. GSA did not maintain other websites providing government information and services to citizens. If the products and/or services your company provides to the government were recurring, it is important to get in contact with the appropriate contracting personnel to determine if your offerings will still be needed and to what extent.
To read more about how to work with the GSA during a government shutdown,download the GSA Shutdown Plan.
In order to cancel a GSA MAS Contract, a company must write a letter with thirty days notice to GSA stating that they are cancelling their MAS Contract. The actual cancellation is very simple. But, it is very important when cancelling a MAS contract to make sure all compliance issues are closed out up to that date. The GSA places compliant clients in higher value compared to those that do not remain compliant, therefore in order to properly cancel a MAS contract, it is important to stay compliant. This includes making sure the company still reports sales and pays the Industrial Funding Fee (IFF). If the company has subcontracts, it is important for them to notify the procurement officers of their effective cancellation of their contract. It is extremely important to continue to report and pay fee of what has already been done up to that date because the cancellation is only for the future, not for what has already been done.
The General Services Administration’s is considering reducing the industrial funding fee (IFF) surcharge it applies to some contract purchases, potentially providing a boost to Barack Obama administration’s push for strategic sourcing.
The industrial funding fee is expressed as a percentage of the dollar value of orders placed. On Multiple Award Schedule (MAS) contracts, the industrial funding fee has been 0.75 percent since fiscal 2004. GSA can use the money to fund the Schedules program or another agency program.
“We think there’s already an opportunity for us to reduce fees,” Dan Tangherlini, acting GSA administrator, told Homeland Security and Governmental Reform Committee Chairman Sen. Joe Lieberman (I-Conn.) at a hearing held Sept. 12. The reduction of fee comes at a time where growing concerns arrive for the strategic sourcing of MAS contracts. Tangherlini further expressed his concern that the industrial funding fee was discouraging many MAS holders from taking the right course of action. Tangherlini believed that a possible reduction in the IFF would encourage agencies to adopt strategic sourcing contracts at a faster rate, and also save MAS holders money. Sen. Lieberman refuted Tangherlini’s comments by stating that “this is clearly a time in our federal government where every dollar counts” and GSA fees including the IFF were helping boost the reserve’s revolving fund.
Despite Sen. Lieberman’s comments, with a surplus on hand in the GSA Schedules program, the time may be ripe for restructuring the industrial funding fee, according to GSA’s leader, Read more about this possible change in GSA may lower some contract surcharges for agencies.