Doing Business with the Federal Government

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Doing Businesswith the Federal Government

• Everyone Can Win!!

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Charles Sadler, CHSC, CHSPExecutive
DirectorSGMP

• 703-549-0892
• Charles.sadler_at_sgmp.org

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Strategies and Solutions

• ? Federal Funding/Authorizations
• ? Comptroller General Decisions and Agency
  Discretion
• ? Food and Beverage
• ? Proposal, Contracts Negotiations
• ? Attrition, Cancellation, Industry
  Standards
• ? Ethics

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Value of Government Business

• . . . even with rules, regulations restrictions
• ? Represent a solid business opportunity
• ? Saved hospitality industry after 911
• ? Not usually adversely affected by economy

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Where Do We Get Our Money??

• Appropriated Funds
• Nonappropriated Funds
• Representation Funds
• Sponsors

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Where Do We Get Our Money??

• Source of money dictates what an agency can and
  more importantly CANNOT procure
• How does a government agency handle operations
  during a
• Continuing Resolution?

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Agency Discretion

• Rules, regulations, restrictions and laws govern
  the way agencies can spend money
• An agency can make a regulation more strict
• An agency cannot make a regulation more lenient

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Any Questions???

• ? ? ?

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Who Is the Comptroller General?
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Comptroller General

• ? Head of General Accountability Office
• (GAO) Legislative branch of the government
• ? GAO issues decisions on expenditure of
  appropriated government funds including
  spending funds for food and beverage
• ? Decisions are published and can be
  referenced when procuring certain items

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Update of CG Decision

• . . . In 2000, the Federal Travel Regulations
  (FTR) maintained by General Services
  Administration (GSA) provided authorization for
  agencies to pay
• for light refreshments during meetings.
• . . . Early in 2003, the GAO said GSA does not
  have that authority . . .
• . . . In 2005, GAO issued a decision in response
  to request from NIH regarding paying for coffee
  breaks . . .

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Where are the donutsand the cookies?
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Creative baking

• Included in meeting room charge

• Negotiated

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a rose by any other name
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When Can Government Pay for F B with
Appropriated Funds?

• ? F B for Meetings and Conferences
• ? Training
• ? Awards Ceremonies
• ? Working Meal Reduced per diem for the
  government traveler
• ? Cultural Awareness Celebrations
• ? Ethnic Celebrations
• ? Combined Federal Campaign Activities

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When Can Government Pay for F B with
Appropriated Funds?

• For certain types of events, it is no longer
  necessary to include food and beverage
• in meeting room charge
• Line item in contract
• For funding authorization, cite applicable
  Comptroller General Decisions, Federal Travel
  Regulations (FTR) or Federal Acquisition
  Regulations (FAR) - GSA

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What About Alcohol??
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What About Alcohol??

• Nows the time for negotiations

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Contracts Negotiations

• ? Negotiations
• ? Placing the Order
• ? Attrition
• ? Damages vs. penalties
• ? Industry Standards
• ? Prevailing Government Rate
• ? Methods of Payment

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Negotiations

• ? Negotiations are the process to
  reach an agreement that is acceptable to both
  parties.
• ? A contract should represent a win/win deal,
  but compromises must be made on both sides.

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Proposal ?Contract

• Proposal is an Offer
• Contract is a binding agreement which can be
  upheld in a court of law
• when signed by both parties.

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Negotiations

• According to John Foster
• ? If you ask for something before the contract
  is signed, this is called negotiating.
• ? If you ask for something after the contract
  is signed, this is called begging!

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Negotiations

• Negotiate for Items that Cannot be Paid for with
  Government Funds
• These items might include
• Food and beverage
• Alcohol and reception food
• Meeting room fees
• Entertainment
• Allowed items the agency prohibits

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What is Negotiable?

• ? Find out what the hotel is willing to throw
  in and throw out what you dont need or want
• ? Dont be afraid to let the hotel know what
  they need to do to make the deal
• ? Be careful not to accept frivolous add-ons
  and forfeit what you need

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What is Negotiable?

• Menu items/prices
• Price structures
• Gratuities/service charges
• Corkage Fees
• Restaurant/bars service hours
• Table decors/themes
• Meeting/Exhibit Space
• Meeting room amenities
• Mark up on AV charges
• Guarantees
• Cut-off dates
• Attrition

• Parking
• Airport Shuttle
• Copies/FAXes
• Newspaper Delivery
• Local Telephone Calls
• Walkie-Talkies
• Fitness Facility Charges
• Business Center Charges
• Sleeping Room Upgrades
• Early departure charges
• VIP amenities
• Mutual cancellation conditions
• Discount for prompt payment!!

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If the basic needs cannot be met

• ? Dates
• ? Rates
• ? Room Block
• ? Attrition and Cancellation Clauses
• ? Issues unique to this event
• Negotiation is not necessary!!

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Importance of Meeting History

• ? Provide complete history of previous
  meetings
• ? rooms book
• ? rooms picked up
• ? FB
• ? Arrival Departure Pattern
• ? Explanation of requirements, if unique

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Industry Standards for Profit

• ?Suppliers Often Prefer Not to Negotiate Room
  Rates
• ? Highest profit margin
• ? Would prefer to give a 10 breakfast
• ?Lower profit margin

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Reasons to Lower Room Rate

• ? Long time client
• ? Filling a hole in the schedule
• ? Money is being made elsewhere in the meeting

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Planner

• ? Room Rate
• Generally most important
• Most noticeable by all attendees
• ? Attendees dont generally know costs of FB
  and AV
• ? When negotiating FB charges
• Upgrade cheaper dish rather than skimping on a
  more expensive dish

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How Do We Place the Order?

• RFP ?
• ? Proposal
• ? Negotiations
• Letter of Intent ?
• Purchase order ?
• Contract
• ?deal?

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Procurement

• ? Micro Purchase
• ? Simplified Acquisition
• ? Contract

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How Do We Obligate the Money?

• ? Letter of Intent
• ? Purchase Order
• Credit Card Guarantee

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Letter of Intent

• ? Identifies responsibilities of
  hotel/venue
• ? Outlines government agencys agreement to
  purchase from hotel

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Attrition Cancellation

• ? A government agency cannot pay for goods
  and services not received
• ? Many government agencies will not agree to
  attrition and cancellation clauses in their
  contracts
• ? Force majeure clause has been amended to
  include terrorism and an increase in the
  national security level by the Office of
  Homeland Security.

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Attrition

• Designed to protect the venue
• ?Venue makes revenue projections based on room
  block
• ? Venue cannot always count on last minute
  bookings to fill a gap
• ? Both planner and supplier should agree to
  review the pick-up at certain intervals
• ? Adjust numbers based on pick-up

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Industry Standard Profit Margins

• If paying attrition and/or cancellation
• ? Sleeping Rooms 75 - 80 profit
• ? Food Beverage 20 - 25 profit
• ? No tax or service charge on
  attrition/cancellation percentages!!!

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Damages vs. Penalties

• A hotel is entitled to damages when the
  attrition falls below the negotiated percentage.
• This is not a penalty
• Penalties are not enforceable in court
• These damages represent a loss of profit
  which is not 100 of revenue

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Prevailing Government Rate

• Make Sure Prevailing Government Rate
• is Stated in the Hotel Agreement and Letter of
  Intent
• ? Government rate may change between the
  contract signing and the event
• ? Venue and planner would be bound by the rate
  in contract

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Increased Per Diem

• At the discretion of the agency,
• per diem can be increased up to
• 150
• OR
• Conference Lodging Rate allows
• 25 increase of lodging rate

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Increased Per Diem

• Example of Increasing Per Diem 150
• Hotel Rate 100
• MIE 50
• 150
• x 150 225
• Less MIE - 50
• Total Hotel 175 maximum lodging

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Increased Per Diem

• Example of Using Conference Lodging Rate
• Hotel Rate 100
• x 25 25
• Total Hotel 125 maximum lodging
• Less than Increased Per Diem
• Does not factor in MIE allowances

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When writing a proposal . . .

• Eliminate or modify the boiler plate language
• Reduces confusion misunderstanding,
  particularly on the part of the novice

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When writing a proposal . . .

• Use numbers/dollars, not percentages
• Room block is 100 rooms with 20 attrition.
  Rate is 100/night.
• or
• If agency picks up less than 80 rooms . . agency
  will pay 75 for each room under 80.

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When writing a proposal . . .

• Use actual dates
• 30 days from what date?
• Date proposal is written?
• Date contract is signed?
• Rates are guaranteed until March 29
• Contract will be reviewed on April 15 and room
  block can be adjusted
• Room list is due May 1

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How Do We Pay the Bills?
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Prompt Payment Act

• ? Payment within 30 days of the receipt and
  approval of the invoice.
• ? Interest assessed
• ? Consider negotiating discount for prompt
  payment

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Planner/Supplier

• Short vs. Long Deadlines
• If you are looking for space 2 months out or
  less, you might stumble upon a great deal
  filling a hole in the venues calendar
• If you are looking for space 5 years out, you
  might have less flexibility in negotiating unless
  you represent repeat business

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Ethics for the Government Event Professional

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Overview

• Definition
• Websites
• Office of Government Ethics
• Prohibited Source
• Gifts
• Conflicts of Interest
• Ethics Quiz
• Professional Etiquettte

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Ethics . . .

• According to Webster
• The discipline dealing with what is good and
  bad with moral duty and obligation
• The principle of conduct governing an
  individual or a group

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Ethics . . .

• Ethical
• Conforming to accepted professional
  standards of conduct

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Ethics Websites

• U.S. Office of Government Ethics
• www.usoge.gov
• Ethics Resource Center
• www.ethics.org

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Office of Government Ethics

• Created by the Ethics in Government
  Act of 1978
• Established position of Ethics Officer
• Provides guidance to executive branch of
  government

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Office of Government Ethics

• Sets policy for government employees
• Interpreted by individual government
  agencies

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Office of Government Ethics

• Conflict of Interest
• Procurement Contracting (and FAR)
• Gifts and Travel
• (and FTR)

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Prohibited Source

• Anyone seeking to do business with the Federal
  government is considered a
• Prohibited Source

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Gifts from Prohibited Sources

• Threshold

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Acceptable Gifts

• Gifts from prohibited source, but based on
  friendship or family relations
• Based on outside business or employment
  relationships
• Discounts, rewards and prizes
• Gifts of little intrinsic value

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Acceptable Gifts

• In Kind

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Everyone Else is Doing It!

• Is the item, gift, or service from a prohibited
  source offered to everyone and not just to
  government event professionals?

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Gifts That Cannot be Accepted

• Return the gift
• Pay the market value
• Perishable gifts with approval
• Not practical to return . . .
• Share with office
• Give to charity

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Washington Post Test

• Are your event and your professional behavior up
  the scrutiny of the media? Do you want your
  event and actions publicized on the front page of
  a major newspaper?

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• Conflicts of Interest

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Conflicts of Interest

• You must not use public office for personal gain

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Conflicts of Interest

• According to the
• Office of Government Ethics
• . . . An executive branch employee is prohibited
  by federal criminal statute from participating
  personally and substantially in a particular
  government matter that will affect his own
  financial interests . . .

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How to Avoid Conflicts of Interest

• Remain impartial in performance of official
  duties
• Recusal or disqualification
• Waiver by authorized official when conflict of
  interest is not substantial

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Contractors in Workplace

• Contractors generally not subject to same
  general principles of ethical conduct and
  specific ethical standards
• but . . .

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Contractors in Workplace

• They are subject to other restrictions imposed
  by
• Regulation
• Law
• Contract
• Contractors themselves

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Contractors in Workplace

• If an act is illegal/unethical for a government
  employee,
• It is illegal/unethical for a contract employee
  to do on behalf of the government.

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• Ethics Activity

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Ethics Activity

• As a Federal government meeting planner you
• are permitted to accept the following
• YES
• NO

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Ethics Activity

• Meal at the hotel/venue with the hotel sales
  person?

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Ethics Activity

• Meal at hotel/venue without hotel sales person

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Ethics Activity

• Dinner with the hotel sales person at a local
  restaurant

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Ethics Activity

• Comp sleeping room

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Ethics Activity

• Limousine service to and from the hotel
• on a site visit

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Ethics Activity

• Gifts from the hotel staff

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Ethics Activity

• Money

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Ethics Activity

• Airline frequent flier miles

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Ethics Activity

• Hotel Points

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Ethics Activity

• Airline tickets or voucher when bumped

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Ethics Activity

• FAM trip