April 2013

Selling to the Public Sector

Selling to the Public Sector: Debunking the Myths

By: Kim Cullen

Selling computer equipment, parts, and providing services such as recycling, data destruction or a repair contract with to the public sector is vastly different than the private sector. You will not run into a public purchasing professional at ITEX or Interop in Las Vegas, take them out for a drink or two or win them over with tickets to a hockey game or other sporting event. For the most part, government agency purchasing professionals have to abide by public official rules and not accept gifts or bribes. Of course, there may be some exceptions, but I would like to think that the majority of our local and state government employees abide by the rules. Government agencies must publically post an opportunity to vendors. All requests for proposals (RFPs) and quotes for bid are available to any interested vendor. Your company can increase its volume of sales with a contract with a county, city or other groups of government agencies. Recently, I was speaking with an electronics reseller & recycler about expanding their business into the public sector. It occurred to me how foreign the public sector can be to those currently working with other businesses. It isn’t a scary process to do business with the government. There isn’t a large barrier to entry either; read on to unravel some myths and tips when doing business with local government agencies.

Government Purchasing Overview

The majority of your local government agencies, Federal and State Government departments will have a buyer or purchasing contact associated with the bid opportunity. Public sector purchasing can be either centralized or decentralized. Centralized agencies tend to have an entire purchasing department publishing all RFPs and quotes for bid and ultimately buying for all other government departments. Decentralized agencies do their purchasing per department (ie separate buyers for the Department of Public Works, Division of Information Services, etc.).

Opportunities available (ie RFQs, RFPs) from the government agency are “open” opportunities that are advertised in a newspaper, online with a purchasing group and/or to an agency’s current vendor list.

The terms and conditions attached to each contract will come within the original opportunity documents or may be adjusted with an amendment at a later date. Each opportunity will have a deadline date attached to the request; all vendors must comply with the terms and deadlines of submitting a proposal or quote to a government agency.

Certification to sell to the Government

One misunderstood component of doing business with the government is that your business needs to hold a special certification or adhere to special guidelines. This is false. Local Government RFPs do not require the bidder to have a GSA or other government contracting certification. On the federal level, you may need a GSA certification. There is a lot of available business on the local (county, city, school board) government agency and State levels that do not need GSA certification. Depending on the bid requirements, insurance requirements and other business certifications for your profession should be sufficient when working with the local government offices. Make certain that you read all of the documents and any amendments for the opportunity closely. It is important to ensure your business can meet the insurance, certification or other requirements within the contract along with providing the goods or services needed. Addendums (something added or changed to the original bid document) can change the requirements to both the opportunity itself and vendor certifications. Before responding to an RFP or quote, make certain that you have read all documents associated with that bid opportunity, including any addenda.

Time Intensive to Find Opportunities

False…but partially true if you are not using the tools available to streamline opportunities from multiple agencies. Finding the bid opportunities matching your business from local government agencies can be a challenge if you do it on your own. Time is one of the largest factors in your business’ bottom line. There are both local purchasing “groups” of government agencies that have all of their opportunities located online and bid aggregators to help cut down this time intensive process.  The bottom line, you have options that range from no cost to minimal cost per region of the country or nationally to find multiple agency opportunities and have them delivered to you automatically based on your computer, telecom, equipment and/or services your business provides.

Bids from Federal, State & Local Agencies through bid aggregator www.BidNet.com. Vendors will pay a fee for this service, however if your business is looking to get into government in multiple states or nationally, the time savings is tremendous.

Local Bid Systems with local Government Agency buyers uploading bid opportunities and documents. These systems have two vendor membership levels: Free Search and an upgraded $89 per year for opportunity matches delivered via email.

New York: 142 local government agencies: www.EmpireStateBidSystem.com

Michigan: 106 local government agencies: www.mitn.info

Colorado: 80 local government agencies: www.RockyMountainBidSystem.com

Texas: 22 local government agencies: www.TexasBidSystem.com

New Mexico: 20 local government agencies: www.NewMexicoBidSystem.com

Florida: 18 local government agencies: www.FloridaBidSystem.com

The Government isn’t Buying

False… the government IS buying. Yes, there have been cut-backs, however the public sector still makes up the largest customer within the United States. Local government agencies throughout each state are continuously looking for greater vendor response within their procurement departments. Counties and municipalities each have separate budgets for goods and services; RFPs and quotes are published daily for larger government agencies, while smaller municipalities may only have a few opportunities throughout the year. Vendors not currently doing business with the local public sector may have a huge opportunity with local cities, counties, school systems and special government districts to gain knowledge of bid opportunities and win business. Within the United States, there are 3,033 organized counties and 3,140 county-equivalents according to the 2007 Census. There are thousands more cities and school districts throughout all 50 states. Each of these local government agencies have goods and service bids waiting for a vendor contract. The government has the bid opportunities available, is your business taking advantage of these business leads?