Feral Jundi

Thursday, February 18, 2010

Industry Talk: Independent Contractor Or Employee? Something Companies Better Get Squared Away

Filed under: Industry Talk — Tags: , , , , , , — Matt @ 12:47 PM

   I wanted to get this out there, because in this industry, independent contractors are what companies use to fill out their work force overseas.  But doom on the company that has improperly classified their workforce as independent contractors.  If you are a small business owner, or even one of the larger companies, it looks to me like the government is now on the war path to square this stuff away and get some revenue.  What will be interesting is to see how the IRS is able to re-interpret gray areas, to get that revenue.  Hopefully companies have done their homework and are squared away, but just a heads up, they are on the hunt.

    Of course actions like this will impact business and their ability to hire more folks.  And in a climate where jobs are a premium, I wonder if this is kind of a form of robbing peter to pay paul again?  But all in all, I like the fact that the government is trying to clamp down on these practices, because at least this will force companies to pay into government systems that were designed to support folks when they retire. (medicare, social security, etc.)  That’s if these companies are using folks more like employees, and less like IC’s.  We will see if this turns into a which hunt, or they actually do catch folks who are cheats.

   On the flip side, you now have another tool in your kit to get back at companies that are screwing you over.  Especially if you are a 1099 guy.  If your company is not playing by the rules, and has been playing some unethical games with you, then I am sure the IRS would love to hear what you know. Of course do it anonymously to protect yourself, and mention any intentional misclassification actions that your unscrupulous company is performing.  lol

   And hey, for those CEO’s and managers that are reading this, or even those contractors that think I am anti-PMC or something stupid like that, think about this.  I want companies to do things right and treat their people with respect.  I also want companies to be successful and profitable.  But I do not want companies to break the law or get unethical in the way they do business, all because they think they have to do that in order to succeed. Not to mention that when you get caught, then the industry gets another black eye because of your actions.-Matt

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Obama Cracks Down on Use of Contractors

The IRS plans to audit 6,000 companies over the next three years in a bid to crack down on companies that erroneously classify employees as independent contractors.

By Courtney Rubin | Feb 18, 2010

President Barack Obama’s proposed 2011 budget suggests tough times ahead for employers who rely heavily on independent contractors in order to keep down labor costs.If the budget is approved, the Internal Revenue Service will add 100 new enforcement personnel as part of a $25 million plan to crack down the misclassification of workers as independent contractors. Though it’s a mere drop in the $3.8 trillion spending plan, it’s expected to more than pay for itself: Obama claims stronger misclassification enforcement will add $7 billion to the federal bank account over 10 years. (more…)

Quotes: Norm Augustine’s Prediction For 2010–Industry More Competitor With Government

Filed under: Industry Talk,Quotes — Tags: , , , , , , — Matt @ 11:03 AM

   The way he worded this quote and the points brought up are certainly compelling.  That private industry is a competitor with government, over the ninety percent of assets out there that are privately owned.  Think about it this way, would you rather have the TSA guarding your business, or a company like Triple Canopy?  If you have the money, and you are really concerned about who you want to use for security services, do you ‘hope’ the government can protect you, or do you go for the sure thing and go with private security? And can you even depend upon what limited resources the government has, to be everywhere at once?  How about for oil companies or refineries?   Or how about information technology or internet giants like Google?  Who do these folks turn to for protection, the government or private industry?

     My favorite one is the media.  Did they beg the government to protect them as they gallop across the world, reporting on disasters or events related to our military and the war?  Maybe for the embeds they are able to depend upon the military, but for the most part, they just hire former Special Forces guys to protect them.  You won’t hear about the media contracting with the big companies, because they have to have someone to take a giant crap on with sensational stories.  So they turn to individuals or small teams to get their high dollar security.

      Either way, interesting words coming from the former CEO of Lockheed Martin. Check it out. –Matt

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Norm Augustine

Industry More Competitor with Government (From ExecutiveBiz)

Norm Augustine’s 2010 Prediction:

“The issues facing the nation and the world increasingly transcend the ability of either government or industry to solve alone. For example, the government clearly has overall responsibility for homeland security, yet 90 percent of the assets to be protected currently reside in the private sector.

“At the same time, as the federal debt grows along with the non-discretionary part of the federal budget, heightening fiscal pressures will be placed on the procurement process. As a consequence, industry is unfortunately likely to find itself more and more a competitor with government than a partner … with proven bad ideas rising from the ashes yet another time (e.g., fixed price research and development contracting).  The problem will be exacerbated by the inability/unwillingness of qualified individuals with industry experience to serve terms in government.

“As one who has spent a significant part of his professional life in each government and industry, I truly hope the above is wrong but that would not be how I would bet.”

(Norm Augustine is retired Chairman and CEO, Lockheed Martin Corp.)

 

Wednesday, February 17, 2010

Afghanistan: Contractors Under Control In Afghanistan, Says Senator McCaskill

Filed under: Afghanistan,Industry Talk,Iraq — Tags: , , , , , — Matt @ 4:34 PM

   It’s nice to hear that she is pleased with the job of the folks in Afghanistan.  No word though on if the 600 positions for monitoring contracts have been filled yet, and I am speculating that it has not happened because of the problems going on in Iraq.  Fill the positions, and then get back to us about how well the accounting is going in Afghanistan or Iraq.  Until then, you guys have no one to blame but yourselves if companies are not doing what you want them to do. –Matt

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Contractors under control in Afghanistan, senator says

But Iraq has a way to go to tame its wild west image

By Matthew Weigelt

Feb 16, 2010

Sen. Claire McCaskill (D-Mo.) said today U.S. military forces based in Afghanistan are doing a much better job of tracking contracts and purchases than they did in Iraq.

Military officers and officials from other agencies are coming together regularly to look at their auditing work, McCaskill said. Members of what are considered auditing committees are checking their audits to make sure they were done correctly. The committees are hunting for gaps in auditing oversight, but also avoiding the duplication of each other’s work, she said in a conference call from New Delhi, India.

In Iraq, however, contracting oversight has been essentially nonexistent, McCaskill added.

“It was the wild west,” McCaskill said about what she found on a trip to Iraq in 2007. She said she was unsure military officers realized they had a problem with overseeing their contracts.

Today though, the military has improved slightly regarding audits and contracting oversight, according to McCaskill. The military has structures in place and they are now making an effort to track what they buy and keep account of that equipment, she said.

(more…)

Leadership: Dealing With Crisis–A Look At Toyota, Tiger Woods, And The Secret Service

Filed under: Industry Talk,Leadership — Tags: , , , , , , — Matt @ 3:50 PM

     The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.-Martin Luther King Jr.

*****

    I wanted to look outside of the industry today, and see what I could learn from other companies or organizations that are going through crisis.  Specifically, organizations that have typically been looked at as solid performers and highly dependable.  I talk about Toyota a lot on this blog, and Kaizen is an immensely inspirational concept here.  Tiger Woods and the Secret Service are also leaders in their industries, and have been held up to a high standard as well.  What they all have in common is that they have all faced ‘problems’ that have negatively impacted their reputations.

   What I wanted to highlight with all cases, is that the actions of the CEO or leaders of these organizations during times of crisis, is absolutely vital.  And in all cases, minus maybe the Secret Service, these groups are taking some serious hits because the leaders are not doing enough to either apologize or to make amends for the actions of their organizations. Perception is everything, and all of these groups listed below are taking some big hits for their actions, or lack there of.

   So what can we learn from them?  Well for Toyota and Tiger Woods, the verdict is still out.  But at the very least, we can deduct that the media and public want some honesty and they want some apologies for not living up to their ideals.  The public has a vision of what these companies are supposed to be, and it is up to those companies to live up to that image.  After all, these guys did not start off with bad reputations and in fact have sterling reputations.  These two companies have mad a lot of money off of that reputation, so it is up to them to do what they can to live up to it.

   It’s the same with the Secret Service, but Mr. Sullivan had to answer to congress for the actions of the Secret Service and the Secret Service does not work for profit.  But they do work for the tax payers and the President, and they are accountable.  With the Iraqi shoe incident under President Bush, and with the Salahi incident with President Obama, these two incidents were very public embarrassments that the USSS had to deal with. There were some in the media that were calling for Mr. Sullivan’s resignation even.  Although I think some public trust has been diminished with these incidents, for the most part, the USSS has recovered and are out of the limelight.  What took the edge off, in my opinion, was Mr. Sullivan getting out front about it all and taking full blame.

    Which begs the question? Why wasn’t there dismissals or reprimands for this incident?  I suspect that because this is government, that firing people or reprimands are just ‘too stern’ and harsh for the Secret Service. Firing some folks would have added some action to the apology given, but in today’s touchy feely government, probably too extreme.

     Or maybe it was because Mr. Sullivan was up front and took the blame right off the bat, that the public really didn’t apply the pressure necessary to force a punishment?  He is still in that position, and still tasked with the protection of the President.  I also don’t see a push for his removal from any kind of massive outrage from the taxpayers.

   So what can we learn from this? Having some humility in the face of crisis, is something that leaders need think about when it comes to dealing with the public.  Of course you also want to be a source of strength and stability for your company, but you also want to show that you care what the public thinks.

     Maybe all of these groups got too comfortable with their position, and maybe bleeding a little was good for them?Maybe the leaders will get humble again, and try to redeem themselves? A lot depends upon the leader, and how they deal with crisis, and this industry certainly has had it’s fair share of that.  Learning from other companies, and how they deal with crisis, is an excellent idea if you care about ‘being prepared’ for future incidents. Interesting stuff, and I would like to hear what you guys think are the lessons learned? –Matt

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Toyota and Tiger Woods: Kindred spirits

By Alex Taylor III

February 11, 2010

NEW YORK (Fortune) — The question is being raised more and more: Can Toyota recover its reputation?

There is no simple answer. The automaker once enjoyed exceptional renown. In addition to being the largest and most profitable auto company on the planet, Toyota was the most studied and copied. Its production system became a benchmark and a model for competitors to emulate around the world.

On top of that, Toyota was known for always putting the customer first, hence its passion for building cars with the highest quality and reliability. The automaker obsessively studied car buyers to find out what they wanted and then provided it for them. It became a leader in new vehicle segments like crossovers, and new technologies like gas-electric hybrids.

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Industry Talk: DynCorp International Awarded Mentoring And Training Contract In Afghanistan

Filed under: Afghanistan,Industry Talk,Training — Tags: , , , , , , , — Matt @ 1:41 PM

   Boy, that is 275 more jobs for contractors out there, not to mention the support crew required to run the thing, and that is great news. It will not be great news, if the service given sucks.  So if anyone at DC headquarters is reading this, please do not cut corners on implementing this contract, and definitely take care of your people.  The Afghani MoD deserves better, the US taxpayer deserves a good value for their dollar, and your IC’s definitely deserve all the support and assistance that you can give them. You have a real opportunity with each and every contract you win, to promote all that is good with your company by delivering a quality service or product.

   Every time a company wins a contract in this war, I continue to think back about what Eeben Barlow mentioned with his company. DynCorp should be thankful for every contract it wins, and certainly show it’s gratitude by delivering on it’s promises and giving a quality service. Here is the quote from Eeben’s blog:

Question- Why was EO (Executive Outcomes) so successful and what makes EO so different from today’s PMCs? 

Eeben Barlow- My answers were that EO had to earn its contracts as it did not have any government-backing from SA – as you know today’s PMCs are mainly government-backed. Secondly, EO was contracted to win wars in as short a period as possible at the least cost.

    Most of all, you guys should be applying Kaizen to all aspects of your operations, and never just assume that everything is going peachy.  Get some shared reality Mr. Ballhaus, and see for yourself what is going on out there.  I would also suggest getting some ‘mystery employee’ action going on, so you can further explore the efficiencies and inefficiencies of your company, and correct what you can. Or you can actually reach out to your contractors, and listen to what they have to say.  People will support, what they help to create, and the company needs to make that first step in order to get that feedback.  Just some ideas. –Matt

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DynCorp International Awarded Mentoring and Training Contract in Afghanistan

February 17, 2010

FALLS CHURCH, Va.–The U.S. Army Research, Development and Engineering Command (RDECOM) has awarded DynCorp International (NYSE:DCP) a $232.4 million cost-plus-fixed fee contract to assist the Combined Security Transition Command-Afghanistan (CSTC-A) and NATO Training Mission (NTM) by providing mentors and trainers to develop the Afghanistan Ministry of Defense (MOD.) This new contract has a 2-year base period valued at $157.8 million, including a 60-day Phase-In period to full performance. The total potential contract value is $232.4 million if the one year option period is exercised.

“We are honored to have this opportunity to contribute to the security transition in Afghanistan”

Under this Afghanistan Ministry of Defense Program Support contract, DynCorp International will provide dedicated in-depth mentoring, training, subject matter expertise, and programmatic support to CSTC-A staff and the Afghanistan MOD. The program supports development of organizational capacity and capability to assist Afghanistan MOD and Afghan National Army (ANA) forces in assuming full responsibility for their own security needs. DynCorp International will provide an estimated 275 qualified personnel to support the CSTC-A staff across numerous functional areas.

“We are honored to have this opportunity to contribute to the security transition in Afghanistan,” said DynCorp International President and CEO William L. Ballhaus. “This new contract builds on our extensive in-country experience training and advising the Afghan National Police, as we support the U.S. government’s efforts to bring security and stability to Afghanistan.”

(more…)

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