How The Government Makes Its Choice

As a consumer, the United States can be quite meticulous in choosing where to buy products and services from. The qualifications for vendors are not something drawn from a magic hat or thought of at an instant like what a mom might do in choosing where to buy this Sunday's vegetables from. There are standard procedures for choosing vendors and buying commodities, and these rules are consolidated into a legislation called the Federal Acquisition Regulation (FAR).

The FAR is a set of regulations that federal agencies must conform to in acquiring commodities from suppliers. FAR details the procurement process step by step: from the time a government agency realizes its demand for a product or a service up until when that product or service has been provider for by a contractor.

Although FAR prescribes a fixed method for procurement, the government can employ different contracting processes when it wants to avail a product or a service.  Examples of contracting methods that the government may use are simplified acquisition procedures, sealed bidding, contracting by negotiation and consolidated purchasing vehicles are key contract methodologies used to purchase products and services.

What Kind of Business Are You?

In the business of government bidding and contracting, it is not only important to understand the market you're trying to enter, it is equally imperative that you define the kind of business you operate, so you know exactly where you stand and how to represent yourself. This becomes especially important when the time comes for you to submit your contract proposals. 

Procurement laws in the United States mandate government agencies to seek the service of different kinds of small businesses for a particular percentage. The standard size for small businesses is defined by SBA here based on the North American Industry Classification System (NAICS). Visit the link and find out if you qualify as a small business or not.

Women-owned Businesses

Government agencies have to tap women-owned businesses for at least 5% of their purchases. Women-owned businesses are defined as "a business that is owned and controlled 51% or more by a woman or women." If your company falls under this category, then you won't have to go through a certification process yet. Simply self-certify by checking the appropriate box. 

Read more about women-owned businesses here.


Veteran-owned Businesses

Veteran-owned business follow the same definition as women-owned businesses. That is, they are businesses owned and controlled at least 51% by a veteran or veterans. Procurement laws don't require a certification process for this type of business as well. 


Service-disabled Veteran-owned Businesses

Businesses under this category are controlled 51% by one or more service-disabled veterans. The Veterans Administration has to confirm the disability first though. If you own this type of business, government agencies have to provide you with 3% of their procurement opportunities.

Read more about veteran-owned businesses here.

Small-disadvantaged Businesses

Defined as "a firm that is 51% or more owned, controlled and operated by a person(s) who is socially and economically disadvantaged," small-disadvantaged businesses are typically owned by African-Americans, Hispanic Americans, Asian Americans, Subcontinent Americans, and Native Americans. Government agencies are required to tap into these businesses for 5% of their purchases.

Read more about small-disadvantaged businesses here.

HUBZone Businesses

HUBZone stands for Historically Underutilized Businesses Zone, and businesses under this category are under SBA's HUBZone Program, which aims to promote economic development and employment growth in depressed areas by providing them with opportunities in government contracting.  If you think your company qualifies as a HUBZone business, you will need to be certified to enter into the bidding process specially tailored and restricted to HUBZone enterprises. Procurement policies demand government agencies to seek your product and services for 3% of their purchases.

Read more about HUBZone businesses and how to apply here.

Getting to Know The Market

When we hear the word consumer, we usually think of the average mother at a grocery store or a young professional out on a shopping spree. While the public does make up a significant percentage of just about any market, you'd be surprised to know that it is actually the US government who spends the most money availing products and services. These purchases approximately amount to $200 B per year and vary from space vehicles to porterhouse steaks.

In other words, the US Government buys just about everything and anything.

If you own a small to a medium-sized business, you might be intimidated by large corporations as competitors in snagging government contracts. But don't worry! Procurement laws in the United States require federal agencies to tap small businesses for at least 23% of their purchases. This is a relatively small percentage, so you'll have to be extra creative in marketing your brand. Perhaps, I should quote this notorious maxim for its relevance:

Ask not what your country can do for you. Ask what you can do for your country.

So perhaps we're way out of context here, but the point I'm making is simple: let the government agencies know what you can do and how well you do it.

Entering into business with the government is quite like entering business with a private entity. Procurement policies for government bidding may require more effort to comply with than private negotiations, but they more or less operate the same way. Business techniques rarely depend on the playing field, so your marketing strategies in doing business with private corporations may very well work with your attempt at doing business with the government. The first thing to do is to get to know the market: how does government contracting work? Who is my customer? Who are my competitors? How might I get ahead of them? These are just some few questions you can ask before you begin looking for bids.

How does government contracting work?

A lot of factors have to be considered in answering this question as procurement policies differ from state to state, agency to agency. The basic bidding process is however quite simple once you strip away the complexities of geographical and commercial category. You can read about the basic bidding process here.

Who is my customer?

The government is branched out into a multitude of agencies, and any one of these agencies could be your customer. If you're a lumber supplier, you could be working for "The City of Florida" or "Idaho's Independent School District." The trick here is to get an operational  knowledge of the agency that is most likely going to hire you.

Who are my competitors? How might I get ahead of them?

Remember that you're not the only lumber supplier in the country. There are certainly one hundred more like you who are claiming to have the best quality lumber in the United States.  Distinguish your business through creative marketing and a reputable history. If you've been in the lumber industry since 1947, then use that bit to sell the quality of your product and the reliability of your service. If you're new, offer something that your old competitors haven't thought about yet. Be original. Show your government agencies that you deserve a shot.

It's formidable to think of the United States as your customer. You know you should do excellently the first try or you might not be able to get a second chance. There can be no room for juvenile business tricks here, especially that you're dealing with the government, and accountability and reliability are of utmost importance. 

Bidding on Government Contracts for Small to Medium-Sized Businesses

Engaging in government contracts is not something only large corporations can attempt. In fact, a number of small to medium-sized companies have sought and won government contracts. There is however a difference between the federal bidding process and the local bidding process, with the former involving a more specified procedure.

If you're a small to medium-sized business owner, these steps can help you get started on doing business with your government:

1. Go through the Small Business Administration guide. Just go to http://www.sba.gov and access the information you need on the product / service category you are prepared to offer.  Educate yourself first on all the relevant contracting guidelines before jumping headfirst into the bidding process. 

 2. Be on the lookout for bids! Government entities employ several means of advertising bidding opportunities, including newspaper ads, public notices, and online posts. Our official website features a comprehensive and exhaustive collection and archive of government bids from all the states in North America. Browse by category or state—our mission is to take legwork out of government bidding. Check us out now!

3. Establish your System for Award Management (SAM) profile. Now that you have a general idea of how to enter into business with the government and have found the perfect bidding opportunity, it is only right that you let the government know who you are and what you can do. 

This is where SAM enters into the equation. SAM is essentially a list of all the companies who want to work for the federal government. The SAM profile that you create here is where you try and convince the government entity that you are their best choice. 

To register with SAM, just go to https://www.sam.gov/. 

Registration is free. You will need to get your DUNS number though; this refers to your physical address.If you don't have this number yet, you can apply for a number free online at http://www.dnb.com/get-a-duns-number.html. You also want to ready your Taxpayer Identification Number.

After you finish setting up your profile, it will become visible within three days. Also, SAM facilitates payments if the government agency decides to award the contract to you.

4. Evaluate your company. Check your company's capabilities against the job requirements and make sure that you have what it takes to complete the job. If you win the bid and deliver a substandard performance, it will most likely be your last government contract.

5. Observe rules and regulations in writing the bid. Refer back to the Small Business Administration, consult the procurement office in your area, and seek advice from other relevant resources.

6. Respond to all the requirements outlined in the IFB in your bid. Address the requirements of the IFB with concise and comprehensive details. Make it clear that you have the resources and the capabilities to properly finish the job.

7. Fill out all the other required forms and submit your sealed bid. Refer to the IFB when this will be opened.

If you were the lowest bidder but you weren't awarded the contract, the government may have doubts that you can deliver your end of the contract. But don't fret! You can request SBA to review your company and submit a certificate of competency to the government entity. If you really want in on the job, you can also enter into a subcontract with companies who already hold government contracts.

Small enterprises have it tougher than larger businesses as there is a heavier burden on their part to prove their competency and quality of work. This is why a considerable amount of time and effort has to be invested into the bidding process—this way, government agencies can be confident that what you lack in size, you make up in performance.

State in Focus: Ohio

Quick facts!

Capital: Columbus
Population: 11, 353, 140
Constitution: 17th State
Tree: Buckeye

Motto:

With God, all things are possible

Doing Business with Ohio

First, you have to be a registered vendor. If you aren't yet, just go to http://procure.ohio.gov, fill out the required forms, and you're all set! Once you're registered, you can now start exploring bidding opportunities with Ohio's state agencies.

But before you completely immerse yourself in Ohio's bidding market, it is first important to acquaint yourself with the entities that make up the state's purchasing procedure. Here are some figures:

• 190 ---> boards, departments, commissions, agencies, and institutions constituting the State of Ohio

• $ 33, 500 ---> amount each agency can spend to purchase supplies

• $ 67, 000 ---> amount each agency can spend to purchase services

If the prices go beyond these amounts, the Department of Administrative Services (DAS) is tasked to implement the purchase via bid selection.

Now there are some stipulations that govern the state's bidding process. An example of this is the 5% preference for bidders from Ohio and from its border states (i.e., Kentucky, Michigan, Indiana, Pennsylvania, and New York). Companies from these states can bid up to 5% higher than bidders from other areas and still have a winning chance of snagging the contract.

Contracts Ohio Sends out for Bidding

Basically, Ohio sends out three types of contracts for bidding: the Department of Administrative Services bids, direct purchase contracts, and state term schedules. 

Department of Administrative Services bids. This bid branches further into three types of competitive bid processes: Invitation to Bid, Request for Proposals, and Reverse Auction. (Read about the type of bids here.) 

One Time Bid (spot purchase) and Reverse Auction contracts are very similar to direct purchase contracts in that once delivery is made the contract is completed. DAS will issue a purchase order incorporating all elements of the bidding document. The third type of contract is the term contract. A term contract will reflect routine needs of one or more agencies over an extended period of time (i.e. one or more years).

DAS maintains various types of term contracts; general distribution (GDC) that may be used by all agencies, limited distribution (LDC) that may be used by specified agencies and agency specific (ASC) that reflect the needs of a single agency.

Once the contractor(s) has/have been determined, DAS will prepare a contractual agreement that incorporates the bidding document , terms and conditions and pricing schedules. This document is signed by the Director of DAS, or his designee, and forwarded to the agencies and contractor(s).

Agencies are then responsible to administer the contract, issue purchase orders as a need arises and make payments upon delivery and acceptance. The average time required to establish a term contract is 90-120 days. (Vendor Handbook, "Doing Business with the State of Ohio." http://procure.ohio.gov/pdf/vendorhandbook.pdf)

 Direct Purchase Contracts. The agency seeking the purchase directly arranges the contract and decides which bidder to go with after receiving three quotes. When the contract has been signed and carried through by both parties, the agency is expected to pay the contractor within 30-45 days.

State Term Schedules (STS). DAS directly approaches the manufacturer for products instead of going through the whole bidding process. The prices are usually determined by federal pricing guidelines or the best pricing the manufacturer has for customers. It usually takes 120 days for DAS to furnish the manufacturer with an STS.

Oh hi, Ohio!

Pardon the lame pun, but one of the great things about doing business with Ohio's government agencies is its simple, user-friendly process. If you are a potential bid, the state allows you to protest the purchase sought, the bidding procedure, the specifications of the bid, even the evaluation and awarding process. You must however file for these protests before the bid opens. If in case you find a cause for protest within the bidding process itself, you must file for this fourteen days before the bid closes.

Winning the Bid

Congratulations! You've won the bid! According to the Ohio Revised Code, you should receive your payment from the agency who hired you within 30 days. This also means that you have to do your part of the deal, always referring back to the terms and agreements specified in your contract.

Keep in touch with your procurement agency! They might have things to discuss with you and vice versa. Common sense and history tell us that communication failures can lead to devastating effects.

Doing business with Ohio doesn't have to be complicated. In fact, the bidding process is neatly streamlined that if you follow the instructions set by the state, you'll find Ohio a great business partner.

Visit our website now to search for government bids in Ohio!

The Basic Bidding Process

If you're part of a government organization or operating a small, medium-sized, or large company, chances are you'll go through a lot of bidding process. Although procurement laws differ from state to state and by category, the basic bidding process is essentially the same for both the entity who requests for them and the entity at the receiving end.

Here are those five basic steps:

1. Specifications

The first step of the bidding process involves laying out the details of the desired job, from the individual parts or processes to the general outcome. The entity seeking the bids usually does this part. If a government office for example is planning to have a particular infrastructure built, it must first provide a document detailing the schematics, the materials, and other important information relevant to the project.

2. Request for bids

When the details have been set, the entity must now request for bids. There are a lot of ways this can be accomplished, including sending out invitations, posting in newspapers, or using online, social media platforms. The bids may come either from a pre-selected list of contractors or from any company who meet the client's qualifications.

3. Bidding

The bidding process starts when the project details have been furnished to the contractors. The process can differ from client to client. In some cases, companies will formally submit bids for the client to evaluate, and in others, the contractors will simply provide the total amount that they will perform a particular job for.

4. Reviewing the bids 

The client will usually set a specific time when bids will be accepted, and once the deadline has passed, will start evaluating them. How long it takes for the client to review the bids will depend on the number of total bids submitted to them.

5. Awarding the contract

The customer will then award the contract, after a thorough process of review and evaluation of the bids, to the winning company. The contractor with the lowest bid typically wins, especially if the price is the priority factor. However, in some instances, other factors might cause entities to overlook the price such as a longer, more reputable track record.

What You Need to Know About Government Bids

In the United States, procurement laws require government entities to seek bids for large-scale projects, more or less costing $ 10,000 (this amount varies by state), from contractors to perform work for them. Government bids—let’s simply call them bids—are offers in the form of proposals or solicitations from companies who are able and willing to do work for a government agency at particular price. How this works is simple:  the government entity will put out a call for price quotes from companies, companies will respond, and from those responses the government will choose which to accept.

The process of bidding is akin to a reverse auction where the contractors are competing to provide a particular service for the lowest price. The lowest bidder doesn’t always win, however. The price is just the first factor government entities weigh in; they’ll have to bring in other determinations into the equation at some point after reviewing the bids. These include work methodology, conflict of interest, and the company’s track record.

There are basically three types of bids: the request for proposal (RFP), request for quote (RFQ), and invitation for bid (IFB). It is imperative for companies to know the difference among the three to ensure that they are putting up the bid most appropriate to the call. Essentially, these three types of government bids differ in terms of request and requirements.

The IFB, as its name suggests, is an invitation to contractors to submit a proposal on a particular project that is within their capacity to pursue, or on a product that is within their resources to provide. For acquisitions involving $ 100,000 or over, the IFB is the most competitive method of landing government contracts. More focused on price than any other factor, the IFB includes information on the required items in the contract, the quality of each item, and the specific time and delivery methods of these products and services. As there is a degree of certainty involved in the part of the government entity, accomplishing the IFB can be as easy as filling out government bid-package forms. This, however, doesn’t imply that contractors can be complacent about the IFB. In fact, the opposite is required of them. It is the government after all who will be reviewing the package.

On the other hand, government agencies aren’t always very sure about how they will go about a project—this where RFPs are most appropriate. This is especially true if the government body not only demands a potential solution, but a solution with a reasonable and concrete cost estimate. Although the government furnishes standard forms for the RFP, contractors are also still required to provide their own. The proposal must include information on personnel, management plans, drawings, and other details that will prove relevant and essential to your claim in being able to efficiently handle and carry the project through.

Many confuse the RFQ as one and the same thing with the IFB. Although both have to do with price more than anything else, the RFQ is more often used to confirm current market pricing. Given this, the quote doesn’t really stand as a binding offer and cannot be chosen by the government body. To make the offer binding, a Standard Form 26 would have to be accomplished. This form constitutes of the signatures of both the contracting representative and the contractor.