To prepare your business for the next hard market (market when insurance costs go up) we have learned over the last 20+ years that professionally completing an insurance application can and usually does lead to a favorable result when the market for insurance is trending cost upward.

Underwriters want to see fully completed applications, claim reports with summaries, supplemental information relating to quality control, training and pre-employment screening and the background owners have in the security industry. Taking the time to fully complete an application for insurance will help you protect your business and your bottom line by giving your broker or agent the information they need to evaluate your exposures to loss and match up insurance coverage to your exposures. It also tells insurance company underwriters that you are serious about your business and protecting it from lawsuits, employee injuries, auto accidents and employment related grievances.

FAPIIS was created pursuant to the FY ’09 Defense Authorization Act and became operational in April 2010.  FAPIIS contains information (going back five years) from various sources that contracting officials use to evaluate the integrity and performance of prospective contractors in order “to protect taxpayers from doing business with contractors that are not responsible sources.”  Information in FAPIIS includes; past performance reviews, excluded parties lists, non-responsibility determinations, contract terminations for default or cause, agency defective pricing determinations, administrative agreements entered into by suspension and debarment officials and contractor self-reporting of criminal convictions, civil liability, and adverse administrative actions.  As mentioned above, FAPIIS is maintained by the General Services Administration.

Currently FAPIIS is only open to “appropriate” acquisition and agency officials as well as the top lawmakers on relevant congressional committees.  Contracting officers are required to review the information in FAPIIS in connection with contracts over the simplified acquisition threshold (currently $100,000) for the purpose of making a responsibility determination,   They must also document the contract file to explain how the information in FAPIIS was considered in any responsibility determination–as well as the action that was taken as a result of the information.

There are concerns that opening the FAPIIS website to the public could lead to public pressure (potentially politically motivated) that could improperly influence a contract award decision, and create a situation where certain vendors targeted by public groups could become “radioactive” and essentially “blacklisted” from future contracts.   A more practical and wide-ranging concern is that making the contractor information in the FAPIIS public could result in the disclosure of proprietary contractor information.

GSA is currently working on the regulations to implement the provision.  There was no timetable or deadline provided by the legislation and GSA has given no indication when FAPIIS will be open to the public.  GSA though has indicated that it will address concerns related to the disclosure of proprietary data.

Under the Patient Protection and Affordable Care Act, employer plans are shielded from certain requirements, such as providing full coverage of preventive services, if they meet certain requirements. For example, employers must maintain current coinsurance requirements and cannot raise employees’ premiums by more than five percentage points. Changing insurers also invalidates a plan’s grandfathered status.

According to the Hewitt Associates Inc. survey of 466 employers representing 6.9 million workers, 90% of respondents expect their plan to lose its grandfathered status by 2014—the majority in the next two years.

“Most large employers would rather have the flexibility to change their benefit programs than be tied down to the limited modifications allowed under the new law,” Ken Sperling, leader of Hewitt’s health management practice in Norwalk, Conn., said in a statement.

Seventy-two percent of employers expect their health care plans to lose their grandfathered status because of design changes. Changing premium subsidy levels, changing insurers and consolidating plans are among other actions employers expect to result in their plans losing grandfathered status.

Fifty-one percent of employers with self-funded plans expect their plans to lose grandfathered status in 2011, and 21% expect that to happen in 2012. Forty-six percent of employers with fully insured plans expect to lose grandfathered status in 2011, and 18% expect that in 2012.

Next Upcoming Webinar – National Parking Association

September 15, 2010 at 2:00 PM EDT, 1:00 PM CDT, 12:00 PM MDT, 11:00 AM PDT

First Observer™ is a national Terrorism Awareness program that uses the skills, experiences and “savvy” of Americans who spend a good part of their working day in America’s surface transportation arena.  For more information and to register, please go to: http://eo2.commpartners.com/users/npark/session.php?id=4843

MARKET  «  MARGINS  »  MULTIPLES

JULY 2010

Highlights of developments since the last report (July 2009): Only one major transaction in the US security guard sector:  Tri-S Security sold its sole operating subsidiary, Paragon Systems, Inc. to Pinkerton Government Services, Inc.; a wholly owned subsidiary of Securitas AB. Margins for large and small security guard companies continue to slide. Industry and financial buyers continue to be aggressive and seek quality acquisitions.  The multiples paid and being offered continue to hold. Several concerns on the horizon for owners of security guard companies: Unions are given more freedom to organize the security personnel. New healthcare bill signed into law continues to confuse, but definitely means more cost to employers. Operating costs on the rise, especially healthcare and unemployment taxes. Federal income taxes are expected to increase starting in 2011, which will make owning (and selling) a company a lot more expensive Reports and surveys indicate that the security guard market will continue to grow in the low single digits for the next 3 years. More security guard companies are looking to companion markets as a way to offset their shrinking margins on traditional standing security guard services. Click Here to Download the White Paper

]]> http://www.valiant.com/security/white-paper-on-the-security-guard-industry/feed/ 0 http://www.valiant.com/authors/legal-legislative/provision-in-pending-fy-%e2%80%9911-defense-authorization-bill-could-spur-federal-government-insourcing-above-and-beyond-recent-obama-administrative-insourcing-guidance/ http://www.valiant.com/authors/legal-legislative/provision-in-pending-fy-%e2%80%9911-defense-authorization-bill-could-spur-federal-government-insourcing-above-and-beyond-recent-obama-administrative-insourcing-guidance/#comments Fri, 30 Jul 2010 00:04:46 +0000 Steve Amitay http://www.valiant.com/?p=950 For the past several months, the government contracting community has been focused on the OMB draft policy guidance released in March that seeks to clarify for federal agencies when  outsourcing of services is, and is not, appropriate pursuant to recent laws passed by Congress.  The guidance, which is expected to be finalized in the fall, creates a single definition for “inherently governmental” (which specifically excludes “building security”) and establishes criteria to be used by agencies to identify other functions and positions that should only be performed by federal employees.  Hundreds of interested parties, including NASCO, submitted comments by the June deadline.   OMB specifically asked for comments on how “security” related functions should be classified, and this issue has garnered much governmental and media attention.

The contracting community raised various concerns with the OMB guidance (lacks clarity, not enough specificity and required agency consideration in  determining which functions should not be outsourced, lacks an agency requirement for cost-comparisons before insourcing, etc. )  However, given the Administration’s political disposition against outsourcing and contractors, overall the proposed OMB policy was considered rational.  When the guidance was published, the Professional Services Council (PSC), a leading government service contractor association, noted that the   ”The proposed policy is balanced, founded in sound management strategy rather than ideology, and …offers meaningful and relevant guidance to agencies in making the determination of what work, other than ‘inherently governmental functions,’ is best performed by federal employees and what is appropriate for contract performance.”

In stark contrast, in May, with little notice and no Committee consideration, an amendment, by Rep. John Sarbanes (D-MD) was added on the House floor to House FY ’11 Defense Authorization bill (H.R. 5136), that will require federal agencies to “devise and implement guidelines and procedures” for insourcing and to ensure that ”special consideration” is given to insourcing certain types of functions.  Hailed by the AFGE after its passage, if enacted, which is very likely, this new required insourcing policy for agencies will go well above and beyond the insourcing guidance to agencies contained in the March 2010 OMB draft guidance.  Using the above quoted Professional Services Council as a barometer of the contractor industry concern, here is what the PSC said about the Sarbanes provision.  “The provision creates a preference to use federal employees and lacks a holistic, well-designed sourcing strategy…this sends a nonstrategic and unhelpful message to the community …and, it’s a terribly imbalanced amendment. There seems to be no recognition of the management challenges agencies face and how they should be approaching this.”

The provision (Section 850 of the bill) requires that agencies “shall devise and implement guidelines and procedures to ensure that consideration is given to using, on a regular basis, Federal employees to perform new functions and functions that are performed by contractors and could be performed by Federal employees.”  Decried as “institutionalizing insourcing” the provision goes on and specifically mandates that  ”special consideration” must be given to using federal employees for any function that has been performed by contractor in the following four categories;  (1)  “has been performed by Federal employees at any time during the previous 10 years”; (2) “is a function closely associated with the performance of an inherently governmental function”; (3) “has been performed pursuant to a contract awarded on a non-competitive basis”; and (4) “has been performed poorly, as determined by a contracting officer during the 5-year period preceding the date of such determination, because of excessive costs or inferior quality.”