When business owners hear the words "government contract," many think of landing colossal agreements with federal agencies. Local governments are often overlooked, even though they also provide reliable, lucrative growth opportunities. City officials issue requests for proposals, commonly known as RFPs, to solicit bids from businesses that want to supply products and services to local government. Businesses can submit proposals to respond to the RFPs and be awarded contracts to fulfill a range of needs, among them office supplies, transportation, security services, web design, food service and marketing. Business owners who can't secure federal contracts may find better odds winning local ones.
Understandably, many entrepreneurs worry that government contracts are already slated for big business. After all, when local officials score bid proposals, at least 25 percent of about 100 points is typically awarded on price. As a result, larger businesses that can compete on price have an advantage. But while a competitive price helps, a company need not offer the lowest price to win.
Decision makers consider additional factors, such as your execution plan, key personnel, work experience and references. Here, small and women-owned businesses can position themselves to compete and win.
- Demonstrate expertise. Let's assume a procurement officer for an Office on Economic Development needs outside legal services to handle a construction dispute over a new retail development. If your firm specializes in construction litigation, then you offer a specialty service, while others only offer general law practices.
In another example, a procurement officer needs food and beverage concessions in a city-owned concert facility. While other bidders tout the breadth of their food-service capabilities, your company's proposal can explain how you've helped clients increase revenue through creative sales techniques. While the competition may have a slight edge on price, your proposal is value-added because you demonstrate results and expertise.
Local governments frequently lack internal expertise in specialized areas. So they contract for timely goods and services, but they also want your knowledge and professionalism. Make sure your proposal includes examples of strategies used to help past clients succeed.
- Establish reputation. Another way to make your business stand out is to be involved in the community already. For example, two similarly situated businesses bid on a contract to provide office supplies to the Department of Public Works. The ink pens and dry-erase boards offered by both companies are identical, and the difference on price is negligible. Yet one business owner is active in the community and known for being a stand-up individual with reliable business practices. The other business owner is from a neighboring county and relatively unknown.
Many small and women-owned businesses bid on contracts before establishing a reputation, then grow discouraged when they fail. To become more competitive, cultivate relationships in the community and establish your individual and corporate reputation for being a government-friendly, responsive enterprise. Consider participating in political events or community meetings to network and learn how to anticipate the needs of local agencies.
- Show you can deliver. A small catering operation isn't likely to be selected as a provider for stadium concessions, and a security company with five guards won't be picked to secure a sizable courthouse complex. Procurement officers must be able to weigh a business's instant capacity to deliver. While your business might not have enough employees by itself, you can demonstrate your capacity by teaming up with established businesses through joint ventures and subcontracting arrangements.
Many locales require a percentage of the work performed on sizable government contracts to be provided through small or local subcontractors. Other jurisdictions have small, minority or disadvantaged business statutes that require contracts under a certain value to be awarded to those businesses. Government-owned corporations, boards and commissions also present growth opportunities, particularly for smaller contracts that only require purchase orders rather than formal bid processes.
- Pay attention to details. Check your local contracting and procurement office and the websites of government-owned corporations and boards to learn about bid opportunities. When presenting your proposal, be careful to include an official copy of any business certifications to receive preference points.
Make your proposal reader-friendly by investing in quality laser jet printing and binding if permitted. Include every item precisely as requested, and in the order requested, in the RFP. Incomplete submissions are regularly disqualified. Be certain which items are included or excluded from the request for proposal, and take into account taxes, cost of goods and any overhead when calculating your bid. A poorly organized proposal detracts from your business image and may trigger doubts about your ability to deliver.