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Executive Spotlight: Mark Danisewicz of AMERICAN SYSTEMS

Mark Danisewicz, AMERICAN SYSTEMS

Mark Danisewicz, chief financial officer of AMERICAN SYSTEMS, recently spoke with GovCon Executive about regulatory requirements and other industry challenges. “You can spend a lifetime building your reputation as a great contractor, but that reputation can be ruined in a moment if you let down your guard.” Fortunately, for AMERICAN SYSTEMS—a well-established government contracting firm in Chantilly, Va.— and its employee-owners, Danisewicz has helped ensure the company understands and complies with changing regulatory requirements. Danisewicz shared some of his insights into current and pending regulations and how he’s helping AMERICAN SYSTEMS to maintain its reputation.

GovCon Executive: What’s a key area of focus for you these days?

Mark Danisewicz: The False Claims Act. As a government contractor, we submit invoices to the government every working day, and DCAA is increasing its scrutiny of contractor billing to ensure it is compliant. At AMERICAN SYSTEMS we’ve remained vigilant to ensure our billing practices comply with requirements, and as CFO I recognize that this area must continue to be a major focus. Our intent is to make certain that our billing system fully and adequately captures cost and hours to ensure we bill the government accurately, so that when we do bill the government we get it right and avoid exposure to the False Claims Act.

GovCon Executive: What latest measures help your finance team stay diligent?

Mark Danisewicz: We double-check invoices, and we’ve incorporated an attestation process. Each year, a big four accounting firm audits the company, and we have to provide them our management representation letter, which is a six-page document that attests to the fact that we have been fully forthcoming. Our CEO, COO, controller, VP of finance, and I each sign it. Recently, we’ve decided to move this requirement to our level-two management, to division leaders, and eventually to the project managers and the project controllers. By heightening awareness of the attestation process, pushing it all the way down the organization, on a quarterly basis, we feel that we are going to get better results.

GovCon Executive: Looking to this year, what are some upcoming industry challenges?

Mark Danisewicz: DCAA regulations will continue to increase, which means incurring costs to ensure we remain compliant. Now it’s more of a pass-fail environment. You have to pass the billing system review; if you don’t, they can suspend payments. It’s real and it’s scary and you’ve got to be very, very diligent. This situation creates a conflict for any business. To beat the competition your operations and back office must be as lean as possible, but you must also maintain a highly effective back office to ensure you continue to comply with regulations. My job is to balance all of that.

GovCon Executive: What other measures are coming into effect to address this more challenging pass/fail environment?

Mark Danisewicz: We are doing a lot of things to ensure our employees can attest that what they are doing is right. One of the core messages we communicate both inside the company to our employees as well as to our clients and competitors, and to the community, is that we are an ethical company, and another major focus of mine is to drive that message down to all levels of our organization. Our Learning Management System helps to do that. It’s a very good intranet site. Every quarter we send out an email to all employees instructing them to access a videotape called ‘Ethical Moments.’ After learning about a specific topic about ethics, the employee is required to answer a few questions, and we track each employee’s progress using the Learning Management System. Every year each employee is required to take ethics refresher training, and when we update our ethics policies, each employee is required to sign a statement that they have read and understand the policy. You’ve got to bolster accountability from every angle and at all levels of the organization.

GovCon Executive:: Turning to additional industry issues — international accounting standards will hit public companies in about two years. How is AMERICAN SYSTEMS planning for this?

Mark Danisewicz: That’s true, international standards are spreading—and generally accepted “American” accounting principles will go away in the United States. Government contractors are going to do what their customers require, and so we are moving to international standards. AMERICAN SYSTEMS employs numerous professionals who are either stationed overseas permanently or who are traveling back and forth from the States to their assignments. Although they are working under U.S. government contracts and for the most part are stationed at U.S. embassies or military installations, we make sure that we comply with the tax and reporting requirements of the countries in which they are working.

GovCon Executive:: How else are you staying ahead?

Mark Danisewicz: We do work in almost all 50 states, and the sales and use tax laws are all different. I’ve got people who are good generalists in tax issues, but when you really need the answer you’ve got to go where you can get the best answer and the right answer. So, it’s a mix of using your internal resources and your external resources. Our outside experts often help us with specific sales and use tax issues.

GovCon Executive: Any final thoughts on what we can expect from your team this year?

Mark Danisewicz: Bottom line: We are going to continue to make sure that we’re compliant. We can’t and won’t cut corners in this regard.

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