Three Ways an ERP System for Government Contractors Helps Project Managers

Posted by Annette Grotz on May 23, 2018

ERP for Government Contractors Project Managers

While time, scope and cost are commonly thought to be the three pillars of project management, project managers working on government contracting projects face the additional challenge of having to meet contractual compliance requirements.

From accounting to resource management to timekeeping, compliance requirements are tightly woven throughout the entire lifecycle of the project. Compliance is not something you can go back and deal with later due to rigorous tracking and audit requirements.

Communicating all contractual performance issues to the customer is a key responsibility for project managers, regardless of project type. Unlike commercial customers, however, the US Government has the right to audit at any time. Data relating to work performed under a government contract should be recorded within contractual obligations and include an audit trail from bid, through changes, to delivery. Project Managers need an ERP system that accurately captures and reports on all of this data.

How an ERP System for Government Contractors Can Help Project Managers Improve Resource Planning

Project managers need to have a detailed knowledge of the project requirements and the resources available to meet those requirements. For resource planning, they must also understand compliance requirements that often include additional necessities such as meeting certain security levels or country of birth requirements. Having a system in which project managers are able to filter resources by the necessary credentials or skills is important.

Having the flexibility to plan by resources or by project ensures project managers are optimizing their resources, since it gives them the ability to see different views of a plan and to efficiently allocate resources to projects that have been awarded.  The ability to plan and allocate resources to projects in this way, helps to ensure that project resource prioritization matches the project prioritization of the company.  Additionally, a system that provides the visibility to forecast resource needs on future government contracts helps project managers determine when to hire subcontractors should key skill sets not be available in-house.

Utilization reports provide the information project managers need to ensure there are no lulls and that burnouts are avoided. They can also help with customer relations if a customer asks for specific resources by name.

When all past, current, and prospective government contract project information is in one system, project managers have better visibility for gauging costs, managing to budgets and determining resource availability.  This visibility also helps them to anticipate change impacts prior to activating changes.

How an ERP System for Government Contractors Can Help Project Managers Improve Reporting for Better Visibility

Communication skills are a must-have for project managers. Most commonly they are communicating about project data. It is critical that the data is both accurate, complete and up-to-date. They need a system that pulls in all of the information pertinent to their project and at the same time lets them access and report on this data in a number of ways in order to effectively communicate with their teams, their executives and their Government Contracting Officer.

Project managers also need powerful reporting tools to help them control expenses. They should be able to monitor project budgets and backlog at any project level.  By running estimate to completion (ETC) reports and estimate at completion (EAC) reports, they can flag expenditures that will exceed authorized funds, and correct as needed.  This capability is extremely helpful when working with subcontractors. They also need the ability to see pending charges to ensure that the project is on budget and to avoid surprises such as labor cost. Pending charges reports can prevent errors and overages that may otherwise negatively impact invoicing due to correction delays.

While project managers need to demonstrate profitability internally, they also need to show the Government Contracting Officer that the budget is in-line and forecast to be in-line with contractual obligations.

Project managers need a dynamic reporting tool that provides business intelligence. For example, rather than a project status report (PSR) merely showing the revenue recognized by the project, labor and non-labor directly charged to the project, indirect costs allocated to the project, and profitability of the current project, they need a PSR that does all of this at different levels of the project and on past, current and future or projected stages of the project.

How an ERP System for Government Contractors Can Help Project Managers More Easily Meet DCAA Timekeeping Requirements

Defense Contracting Audit Agency (DCAA) timekeeping requirements apply to all companies with federal contracts. This means that your customer, the US Government, may surprise you with a floor check audit at any time. This audit tests the compliance of timekeeping policies, labor charge controls and the accuracy and integrity of employee timesheets.

Project managers must ensure that labor costs are recorded and accumulated correctly and that all timesheet changes are documented with reasons for the changes. Additionally, employers should be able to answer questions about their timekeeping procedures and demonstrate their timesheets are following those procedures.

Project managers and others in the organization should be able see the time and expense charges, burdens and revenue generated from timesheets daily in real-time, versus having to wait until the timesheets are processed and posted.  Getting information into what is happening on their jobs even before information is posted can reduce errors and help government contractors avoid payment delays.

An ERP system that is designed to help record compliance data and ledgers at both the organizational and project levels, is the best way to automate the data collection needed to help meet government contractual obligations.

Learn more about DCAA Compliance. Read the blog, "What is DCAA Compliance?"

Summary

Keeping track of time, costs and resources and accurately reporting on all of this data is critical for project managers working on government contracts. Implementing an ERP system for government contractors can help project managers improve visibility and efficiency, maintain compliance at all times, and manage projects for profitability.

  • Learn how Costpoint Project Manager software helps government contractors
  • Watch this webinar to learn how Costpoint addresses key compliance requirements, maximizes resource utilization, and aids in contract management.

About the Author

As a Product Marketer, Annette Grotz shares the exciting story behind Deltek Costpoint and what makes it the industry leading ERP solution for Government Contractors.