ODYSSEY: The Leader in Defense Commerce Solutions Blog

Three Types of Government Contracts and What You Need to Know About Them

Posted by James Lusk on Tue, Aug 4, 2020 @ 14:08 PM

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If you are new to the DoD contracting space, it is important to understand that not all contracting work is created equally. Every business day, the DoD posts new contracts available for bidding, which to the untrained eye appear chock-full of industry jargon and convoluted language. Depending on the type of work you are bidding on, the government offers different types of contracts to negotiate your compensation for completing said work- each with its various nuances, benefits, and varying levels of risk. Before you dive in and grab up a contract of your own, you should know what you are getting yourself and your employees into. Doing this will help you mitigate any risk involved so you can plan ahead and maximize your profitability.

Fixed-Price Contracts

This is the most basic, standard form of contract. Fixed-price contracts are exactly how they sound. In this agreement, contractors are provided with a description of the project and asked to submit a bid for their price to complete it. While fixed-price contracts will sometimes include a clause to renegotiate the price, these clauses are not always present and should be considered an exception to the norm for this contract type. For the most part, it is up to the contractor to provide a competitive bid that will accurately cover the costs to complete the work.

 

In this contract arrangement, the contractor assumes a healthy amount of risk depending on his or her operations’ integrity. Additional costs incurred but not anticipated during completion of the work are often not compensated. For fixed-price contracts to be a profitable venture, it is essential that both parties are completely clear on project specifications and final deliverables. Accurate forecasting of costs and highly efficient execution of work are also paramount to success. While fixed-price contracts offer great opportunity, it is the contractor who runs the tightest ship that will fully reap the rewards of this work.

Cost-Reimbursement Contracts

On the other end of the spectrum is the cost-reimbursement contract. While certainly not devoid of risk, this contract type gives the contractor a greater chance to recoup unexpected costs that pop up during completion of the project. The cost-reimbursement contract allows a contractor to submit an upfront quote that establishes a cost maximum. Then, once this cost ceiling has been approved, the contractors proceed and can file for reimbursement of costs incurred as they complete the work.

 

While these contract types are often lower risk for contractors than the fixed-price contract, they also usually offer a lower profit margin, thus requiring contractors to be more competitive in their bidding. While the incentive for efficiency might not be as upfront as with a fixed-price contract, it becomes imperative if you wish to turn the biggest profit off a competitive bid.

Incentive Contracts

These contract types are created to allow the DoD to customize the project work by incentivizing one or more important aspects and focus the contractor on the areas that are important to the government. Incentive contracts will offer some sort of positive or negative incentive to complete (or failure to complete) a predetermined objective, whether it’s a completion date, reduced cost, or some other form of the project objective.

 

Incentive contracts offer an excellent opportunity for contractors who are fully aware and confident in their capabilities, as the objectives are clearly defined. However, care must be taken as these contract types are often chosen when it’s difficult for the DoD to determine the project’s exact cost or realistic timeline.

 

The one common characteristic of all DoD contract types is that creating as much efficiency as possible in your operation will always give you a competitive edge and increase your margins. To learn more about how Odyssey can help your business add efficiency to its DoD processes, contact us.

Topics: contract management, DoD, Odyssey DCS, department of defense, dod commerce solutions

Three Reasons Not to Fear Efficiency Tools

Posted by James Lusk on Mon, Jun 29, 2020 @ 11:06 AM

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Perhaps since the invention of the wheel, humankind has always sought a better way to get the job done. It’s our evolutionary drive that makes us want to find ways to work smarter instead of harder, and constantly seek better ways of doing things. When it comes to the workplace, innovation has made the impossible possible, enabling progress and levels of production never seen before.

However, somewhere in the process of innovation making our tasks easier and our outputs greater, some industries experienced this very technology starting to cut the human factor out of the equation. Workers found that the tools brought in to make their jobs easier were now fully replacing them. While this does in fact happen from time to time, it is essential for companies looking to maintain their competitive edge not to write off all technology that can help create efficiencies for fear of it replacing staff. Some technology was created to work alongside staff, enabling them to accomplish more and improve the overall productivity of the team, and Odyssey is a perfect example.

Here are three reasons not to fear efficiency tools like Odyssey.

Odyssey is just another tool in your tool belt 

Technology is inescapable today. From digital scanners and cash registers to desktop computers, it’s hard to find a workplace that doesn’t use some form of technology to help make things easier and faster. Yet accountants don’t fear Excel taking their jobs, just as reporters don’t fear Microsoft Word. Like Odyssey, these efficiency tools take some of the legwork out of workers’ everyday job functions, allowing them time back to perform additional tasks.

Having only one person able to perform a task is dangerous for the company 

It isn’t uncommon for employees to gravitate toward the tasks that complement their talents and skills. But specializing to the point where a single employee is the only one who can perform a function that is critical to the lifeblood of the company is a recipe for disaster. In these cases, avoiding using efficiency tools like Odyssey to “protect” one’s job has really only placed the entire company in jeopardy. Odyssey makes shipping and labeling processes transparent for the company, removing the dangerous logistical underground.

Odyssey needs someone to drive the bus 

Odyssey is not an autonomous program. Rather, it was designed to work alongside a team, removing errors and inefficiencies, giving the team a competitive advantage, and making the leader who implemented it look smart. Odyssey will always require users to initiate and complete its processes.

Especially in times such as these, it is unwise for any company not to use all the assets available  to streamline work processes, eliminate inefficiencies and make the company as competitive as possible- especially if your goal is to protect your staff’s jobs.

To learn more about how Odyssey can help your business add efficiency to its DoD processes, contact us.

Topics: DoD, Odyssey DCS, department of defense, dod commerce solutions, efficiency

Despite All the Shutdowns, the DoD Presses On

Posted by James Lusk on Thu, Jun 4, 2020 @ 11:06 AM

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While it can be hectic at times, government contractors have always enjoyed a certain degree of stability in the nature of their work. The COVID-19 pandemic that hit earlier this year caused turmoil for everyone, shuttering countless businesses for the unknown future. Some were saved with public loans, while others went bankrupt and were quickly forced to close for good. While some industries were deeply impacted, and it may be years before they return to their former glory, the Department of Defense carries on in its duties despite the difficult times. And likewise, the DLA continues to do business.

Historically, the DoD shows strong growth, year after year. From 2018 to 2020, the budget grew each year from $639B to $686B to $718B. In 2021, the DoD budget requested by the White House consisted of $740.5B for national security, $705.4B of that for the Department of Defense. While the budget growth might have flattened when compared to the previous years, it’s important to take note that these are funds already allocated for contract work.

Despite the current conditions and market volatility, the DLA continues to provide a very stable line of work. It can also be quite profitable if companies can make the necessary adjustments. The key to maximizing profitability from DoD contracts is efficiency. And while most commercial orders are easy, DoD contracts are notorious for having strict requirements for processing orders that must be followed precisely in order to receive payment on time. Making even the smallest error in following these requirements will cause delays to payments and reduce profit margins.

As others allow small errors to affect the profitability of DoD contracts and subsequently retreat to easier (but less stable) commercial work, now is the time for companies to invest in their DoD processes and capture the business others are leaving behind. Odyssey software helps standardize processing of orders while removing all the hurdles. Contractors can process an order flawlessly in 2 minutes, and with only 14 keystrokes.

Even in tough times such as these, the Department of Defense must continue doing its job to keep our country safe; and it will continue to depend on contractors’ support to accomplish its mission. By improving processes and implementing efficiency, DoD contractors can thrive during these times and come out ahead.

To learn more about how Odyssey can help your business add efficiency to its DoD processes, contact us.

Topics: DoD, Odyssey DCS, department of defense, dod commerce solutions, covid-19, coronavirus

Anatomy of an NSN

Posted by James Lusk on Wed, Apr 29, 2020 @ 14:04 PM

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Any contractor who has done business with the Department of Defense has surely seen the 13-digit numeric code used to identify a product as a standardized material item of supply. Known as NATO Stock Number, National Stock Number, or simply as NSN, this code is used by all countries in the NATO treaty, including the United States Department of Defense. Considering the sheer volume of items in the inventory of the DoD, let alone all other NATO treaty countries, the development of a 13-digit code to catalog all these items was no small feat. The following article takes a closer look at the history of the NSN, what its different components mean, and how this number is able to perform the massive task for which it was developed.

The NSN is the descendant of a long line of cataloging systems used by the United States government. In 1930, the US Army Ordnance Corps developed the Standard Nomenclature List as an index for general ordnance supplies, ammunition, weapons and other items. The US Army Quartermaster Corps, as well as the medical departments of the Army, Navy and Air Force each had their own systems to catalog items. Over the years, it became obvious that an inter-service system that could help manage items for all branches of the military would be useful. The Army-Navy Munitions Board was created to fill this need but was put on hold during the Second World War. After the war, the entity was reactivated and renamed the Defense Munitions Board, which created the Cataloging Agency in 1947. This subordinate organization was conceived to manage the Joint Army-Navy Catalog System. To do so, it used a unique 11-digit code assigned to each individual item. The code was eventually referred to as a Federal Stock Number (FSN), and it became the official codification system of the US military when the Defense Cataloging and Standardization Act was passed in 1952. Eventually, the FSN required an update and was replaced by the NSN in 1974.

Every NSN consists of 13 digits; a four-digit NATO supply classification group code, followed by a nine-digit national item identification number (NIIN).

The NATO supply classification group is comprised of the NATO Supply Group (the first two digits) and the NATO Supply Class (the second two digits). The Supply Group provides the general type of item (aircraft vs. construction machinery, etc.), while the Supply Class provides more detail of similar items in the group (fixed vs. rotary wing aircraft, excavators vs. cranes, etc).

The NIIN makes up the final nine digits of the NSN. The first two digits of the NIIN are the country code, used to identify the country that was the first to codify the item (and usually also the country of final manufacture). Each of the 29 NATO member countries, as well as the 34 NATO-sponsored countries, have their own unique country code. To recognize it as the inventor of the system, the U.S. received the 00-10 country code. The final seven digits of the NIIN are known as the non-significant number, and represent a random, unique code number for a specific item in that particular county code’s inventory. Once assigned, non-significant numbers are never reused or changed. The first three digits are the “interfix” number, indicating the batch where the item came from, and the final four digits make up the unique code of that specific item.

As a testament to its effectiveness, the NSN is still in use today and continues to help catalog and organize the incredible amount of equipment and supplies that is used by NATO countries across the world. But while it plays a significant role in the DoD supply chain, it can be a complicated element to manage for your business. The Odyssey platform can help make it easy to manage data and print labels from one solution.

Do you have more questions about the way the DoD does business? If so, Odyssey can help! To learn more, or for any other inquiries about our products and services, contact us.

Topics: Data Security, DoD, Odyssey DCS, department of defense, dod commerce solutions, NATO Stock Number, NSN

DoD Commerce Trends- What to Look Out for in 2020

Posted by James Lusk on Mon, Apr 6, 2020 @ 11:04 AM

2020 DoD Commerce Trends

Government contractors are no strangers to rapid change. Often driven by new legislation, emerging technology or worldwide trends, adapting to a constantly changing landscape is the cost of doing business with the U.S. Government. But besides being flexible, looking ahead and predicting upcoming trends can help contractors better align their businesses with what’s to come.

Buckle down on Cybersecurity

Winning contracts will require strict cybersecurity verification in 2020. Version 1.0 of the Cybersecurity Maturity Model Certification (CMMC) was introduced by the DoD in January, and contractors should expect to see CMMC requirements as part of requests for information as soon as June 2020.

CMMC provides a framework for the DoD to assess and enhance the cybersecurity posture of the Defense Industrial Base, ensuring appropriate levels of cybersecurity practices and processes are in place. CMMC will encompass multiple maturity levels that range from “Basic Cybersecurity Hygiene” to “Advanced.”

Contractors will coordinate with an accredited third-party commercial organization for CMMC certification, which will be based upon the contractor’s ability to demonstrate maturity in their capabilities and organizational maturity to the satisfaction of the certifying party. All companies, including subcontractors, will need to obtain CMMC certification.

It's a big year for the little guy

The FY2020 National Defense Authorization Act, which specifies the budget, expenditures and policies of the DoD, has passed- allocating $738 billion to the United States military.

Of the many implications, small business should take note of the expansion of the definition of “Disadvantaged Small Business Concern.” This permanently authorizes the DoD’s Mentor-Protégé Program, intended to increase participation of small businesses by encouraging mentorships with DoD contractors.

The Small Business Act has also been amended to require the Small Business Administration to report information regarding “best-in-class” awards to small businesses in its report to the president and Congress. 

In additional, 2020 marks the year that new legislation kicks in, classifying the small business designation by basing it on an average of earnings over five years instead of three. This will have significant impact on how small-business contract competitors are evaluated.

Contract consolidation 

The General Services Administration ushered in the new fiscal year by releasing its new consolidated Multiple Award Schedule contract. The contract takes the 24 different multiple GSA award schedules and consolidates them into one schedule with 12 categories. This new contract is designed to allow contractors to operate one single contract with one set of requirements, rather than juggling the needs of multiple contracts if they provide multiple products or services.

According to the GSA, reforming the schedules will improve customer service, make it easier for small businesses to access the schedules program, reduce duplication for all vendors, and allow GSA workforce to focus on delivering solutions.

With so many changes in the works, don’t let maintaining compliance with shipping, packaging, labeling and data entry standards make you lose sight of fine tuning your business for future performance and securing new contracts. Odyssey can help.

To learn more about Odyssey, or for any other inquiries about our products and services, contact us.

Topics: Data Security, DoD, Odyssey DCS, department of defense, dod commerce solutions, CMMC, National Defense Authorization Act

How Odyssey’s Transaction Services Is a Game Changer

Posted by James Lusk on Wed, Feb 26, 2020 @ 11:02 AM

Transaction Services

Contracts with the Department of Defense offer excellent opportunities for businesses. The chance to support members of the United States Armed Forces in their missions, coupled with a steady and consistent demand for supplies contribute to a rewarding and profitable arrangement. In addition, as part of its strategic goals and mission, the DoD actively seeks out opportunities to award contracts to small businesses. In fact, according to its small business procurement scorecard, over 24 percent of the DoD contracts awarded in 2018, an estimated $72 billion, were to small businesses.

But for small businesses who have recently landed a DoD contract without any prior experience, learning and complying with the stringent and numerous specifications required to successfully fulfill each shipment can make or break that business’s future. Specifications for packaging, labeling, tracking and shipping must be followed to the letter to avoid rejected shipments or delayed payments that could put the business in jeopardy.

Odyssey is changing the game for new and existing DoD suppliers with its new Transaction Services. Odyssey’s Transaction Services is a one-off service where Odyssey provides all the required MIL-STD 129 R and (if required) MIL-STD 130 N labels, and loads all required documents into the Defense Logistics Agency’s online invoice and tracking system, iRAPT/ WAWF, on the customer’s behalf. 

Odyssey Transaction Services act as an incubator to help companies that are new to DoD contract work and trying to build their business. The service can also offer support to companies that don’t do a lot of business with the government, perhaps only sending a handful of shipments per year, and simply don’t have the infrastructure in place to ensure compliance. Lastly, Transaction Services can offer existing Odyssey customers the opportunity to process awards that may be one-offs in their environment, such as MIL-STD 130 N UID or MIL-STD 129 R Item Level RFID. If a customer has access to Odyssey software, but not one of the add-on modules, they can engage Odyssey to complete the one-off transaction. This way, the customer avoids having to purchase the entire module. 

Odyssey understands the demands its customers face and created Transaction Services to help facilitate an easier shipping process. Signing up for the Transaction Services is simple, and requires minimum input from the customer. 

The process is as follows: 

  • Customers provide award information and shipment configuration
  • Odyssey provides a quote to perform the work
  • Upon receipt of signed quote, Odyssey will initiate work on the labels and contact the customer to fill in any unknown information (weights, dimensions, etc.)
  • Customer receives proof of labels for approval 
  • Upon approval, Odyssey ships labels to customer or other designated location
  • Customer provides the corresponding government invoice number
  • Odyssey uploads the Advance Ship Notice and Commercial Invoice via server-to-server integration, together representing a combo or any other form of submission required by the contract

There is a one-time fee for Transaction Services, plus charges for labels and shipping. Odyssey guarantees a 100 percent compliant process and will stand by the transaction until it is accepted in WAWF and the pay cycle has begun. 

To learn more about Odyssey’s Transaction Services, or for any other inquiries about our products and services, contact us

Topics: MIL-STD-129, DoD, Odyssey DCS, department of defense, dod commerce solutions, packaging

What You Need to Know About MIL-STD-129R and MIL-STD-130N

Posted by James Lusk on Wed, Dec 18, 2019 @ 10:12 AM

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If you’re new to doing business with the Department of Defense, a vital lesson to learn upfront is there are very specific requirements that you, as a contractor, are required to comply with to fulfill your contract and receive compensation. Failure to comply with the smallest specification can result in rejected shipments and delayed payments, which could cause major headaches for your business. 

An example of these requirements that frequently cause DoD contractors trouble are the two labeling standards MIL-STD-129R and MIL-STD-130N. These DoD-approved standards outline a set of directions for labeling and tracking the shipping of requisitioned supplies and equipment, as well as marking items purchased by the DoD (including text formatting, syntax rules, and where markings should be located). 

Before you begin work on your DoD contract, here’s what you need to know about MIL-STD-129R and MIL-STD-130N.

MIL-STD-129R

The current incarnation of this standard, R, is an update to MIL-STD-129 that was made in 2014. MIL-STD-129R replaces linear barcodes on identification labels with machine-readable PDF417 barcode symbols that allow the use of UID labeling (which can be up to 50 characters long – too long for a traditional, linear barcode). This allows large amounts of data to be securely stored on a 2D shipping label. DoD and defense contractors can scan these barcodes automatically, greatly simplifying asset management and tracking. 

The Defense Logistics Agency has created a checklist of 10 key components that must be present, in order, on the shipping label to be compliant with MIL-STD-129R standards. They are as follows:

  1. NSN/NATO stock number
  2. CAGE code
  3. Part Number (identified as PN or P/N)
  4. Item description and nomenclature, exactly as it appears on the contract, purchase order, or requisition
  5. Quantity and UI
  6. Contract number or purchase order number
  7. Military preservation method and date of unit preservation, if applicable
  8. Shelf-life markings, if applicable
  9. Serial number(s), preceded by the abbreviation SER NO
  10. Barcode markings, including NSN and CAGE, if required 2D (PDF417), and serial number

With so many inputs needed, the process of creating MIL-STD-129 obviously has many opportunities to go wrong, resulting in shipping mix-ups, delayed payments, possible non-compliance penalties, and damage your credibility as a preferred vendor.

MIL-STD-130N

After World War II, the organization that would eventually become the Department of Defense created Federal Stock Numbers to facilitate inventory control. These FSNs were 11-digit identifier codes that acted as unique identifiers to military assets. This method was further refined several years later with the Defense Cataloging and Standardization Act, which mandated a single catalogue system for the DoD. The system was successful. To make it official, the DoD published MIL-STD-130N in 1953 to require the uniform application of identification labels to military properties, providing a set of directions for proper marking of items purchased by the DoD. 

The most recent update to this standard, referred to as Change 1, occurred in 2012 and established the UID unique identifier data matrix requirement to allow for easier automated data capture. This unique identifier follows an asset throughout its entire lifecycle for easier tracking. This system greatly enhances inventory control and visibility. However, like MIL-STD-129R, the asset marking requirements set forth in MIL-STD-130N can be complex and difficult to manage.

What you need to know about managing these requirements

Managing MIL-STD-129R and MIL-STD-130N means reducing errors, and the key to reducing errors is limiting the opportunity for them to occur. If your current operations involve a great amount of manual data entry, consider introducing automation into this process to reduce human error and streamline information exchange. 

Odyssey’s products are made specifically for defense contractors trying to maintain MIL-STD-129R and MIL-STD-130N compliance. They automate data entry, label printing, UID validation and registry submission, and can even facilitate payments and future reordering. Learn more about how Odyssey can streamline your operations, reducing risk, and protecting your cash flow. Contact us today.

Topics: MIL-STD-129, DoD, Odyssey DCS, department of defense, dod commerce solutions, packaging

What Vendors Should Know About TLS Contracts, And How Odyssey's KOP Module Can help

Posted by James Lusk on Wed, Nov 20, 2019 @ 11:11 AM

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What's TLS?

The DLA’s Tailored Logistical Support program provides total logistics support and procurement for government customers. Vendors who qualify for this program are placed on a short list, and have the opportunity to bid and win contracts with the Department of Defense, federal agencies, state and local governments, as well as other authorized customers around the world. A wide variety of both military and commercial products, training and services are available for the TLS program. Examples include contracts for tactical equipment and supplies, safety equipment, hazardous material response training and maintenance, repair and operations.

What are the obstacles to success?

Being a TLS contractor is a coveted position! Future business, and plenty of it, is essentially assured- but only if you play by the rules. TLS contractors are required to send data in Electronic Data Interchange format, which on occasion can cause errors (especially if the contractor uses a separate enterprise resource planning tool). In addition, contractors are also required to conform to MIL-129 r labeling standards. Failure to abide by any of the rules can result in delays, refused shipments and unpaid invoices.

How can Odyssey help? 

To address these issues, and help ensure that TLS contractors’ business operations remain profitable, Odyssey developed the KOP Module. The module is a sophisticated, EDI-centric compliance and efficiency tool. It provides superb handling of exceptions, assuring contractors that all of their electronic transactions and MIL-129 r labels will be correct and result in paid invoices. 

Odyssey’s KOP Module is aided by an easy-to-use interface, which grants users the ability to see the entire transaction. Contractors have full visibility of all of their open orders, as well as detailed information on each specific order. Orders can be sorted and filtered by characteristics such as ID number, payment status and invoice amount. In the event of any inaccuracies resulting from human error or bad data, personnel can manually correct the errors without prior knowledge of EDI. 

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Since the KOP Module automates EDI transmissions, contractors can continue working in their own ERP and utilize the KOP Module as a point of reference or for exception handling. 

Contact Odyssey today to learn more about how our KOP Module can help your business make every TLS contract a profitable one.

Topics: MIL-STD-129, DoD, Odyssey DCS, department of defense, dod commerce solutions, packaging, KOP Module, TLS Contracts

What to Look for When Selecting DoD Software for Your Organization

Posted by James Lusk on Wed, Jul 12, 2017 @ 11:07 AM

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Since 2006, when Odyssey began, we have worked with many companies and have listened to them describe their day-to-day pain points. We’ve heard just about everything a company and its employees experience as they muddle through the ever-evolving mandates and compliance measures required to do business with the Department of Defense.

 Every organization can agree that DoD Commerce is no trivial matter and that choosing the right DoD solutions software can be difficult. We want to re-focus the way DoD suppliers and other organizations view DoD commerce, as well as demonstrate all that is possible through an integrated cross-departmental solution, specifically designed for DoD suppliers. We’ve listened to our customers and colleagues and have put together our best advice.

Companies should ask themselves the following questions when comparing DoD commerce software platforms.

Will it be a simple transition?

When researching software solutions, be sure the software you are reviewing doesn’t cause any stress on your organization’s internal IT department or force further management or overhead to operate. Fundamentally changing your process will cause more harm than good. A simple transition will guarantee employee buy-in and better results.

Is integration possible?

DoD tasks should not be seen as events occurring one after another. The most successful companies have integrated departments, resulting in efficiency and ensuring 100% compliance throughout the entire process. Look for a software solution where integration is possible from award to payment.

Is it scalable for long-term success?

Scalable solutions allow companies to grow and plan for future requirements that are not yet mandated or not yet impacting current business. When comparing software solutions, be sure to find one that can easily scale up or down, based on the myriad of criteria that could affect the organization in the long-term. Fully scalable solutions for DoD suppliers is key to successful business.

Does it unite your organization?

DoD commerce tasks should not cause discourse between departments and stakeholders. Ensure that a proposed solution brings your team together for a common goal and does not require part of the group to continue using unrelated software. A collaborative software solution will help organizations see the best results.

It’s important that internal champions within a company, just like you, care enough to seek new, efficient and effective ways to successfully complete DoD tasks in one solution. It takes leaders to change the way an organization views DoD Commerce. Understand the impact of change and convey your message to peers and authorities with conviction.

Also, be sure to keep these questions in mind when researching software solutions. If you have questions, or would like to learn about using Odyssey as your DoD-approved software and commerce solutions provider, we would be happy to speak with you. You can contact us here

 

Topics: DoD approved software, department of defense, dod software, dod commerce solutions