Installments: Government business can be a good niche

Home Columns Installments: Government business can be a good niche

July 22/29, 2013; Volume 27/Number 7

By Dave Stafford

Stafford,-DavecolorIn spite of the current headlines and daily recital abuses, the government can be a source of profitable, steady business if you do your job right. Having dealt with plenty of government challenges as a flooring contractor, here are some tips for when you are tempted to blow a gasket over red tape:

Win that next contract by doing better research than your competitors. Under the FOIA [Freedom of Information Act] you can often obtain complete information about previous contracts, contract awards and contract use. This can explain focuses for a multi-year, multiple item product installation solicitation. I once reviewed a current multiple award contract up for rebid and found that over 80% of the volume came from one contract item. This suggested that one would be wise to pack profit into that item.

In another case, the end user had an atrocious relationship with the current contractor and was actively looking for a change. Are you wasting time with your bid or do you have a real shot? You can often gauge this through casual conversation and see if they are open to “or equal” offerings and under what terms. If not, and if you don’t have a key dealer relationship with the items, it may be better to go to something else. A word to the wise: Don’t get so wrapped up in getting one bid, causing you to spend too much time and money.

Read the regulations and contract terms if you are considering bidding on a government job. Go to pre-bid meetings and ask questions. See who else is bidding. Significant differences exist between an RFQ [Request for Quotation] and an IFB [Invitation for Bid]. In the former, you may suggest your solution or some modification to the government’s requirement. With an IFB, you don’t have that leeway, and partners may be unresponsive if you don’t answer exactly to what is requested.

Fiscal year term matters for all government agencies. Money cannot be spent until budgets are approved. Even if you are approved for extra work, the money for you may not be there. I once wrote off almost $10,000 because a change order was issued in error just before the end of the fiscal year and money to be paid was not available. I was told, “We’ll find a way to make it up to you next year,” although that never happened. Legal action would have cost twice the write-off amount and may not have succeeded.

Bid protests are generally a waste of time unless you have clear-cut documentation of outright malfeasance, bid rigging and fraud. And even then, your chances of prevailing are low. I put the success of a protest under 10% even if you have a good case and respond promptly. There are too many regulations that protect the government. I once had a protest rejected by the Government Accountability Office [GAO] because they found my “filing was not timely; however, if it had been timely, we would have found in favor…of your assertion.” Talk about frustrating! I did have the last laugh because the agency realized I could file another protest and would likely prevail, and, therefore, they changed their regulations. Don’t adopt a “scorched earth” approach even if you’re frustrated over delays and bad decisions. Practice restraint and grit your teeth.

Government bureaucrats are human, too. Just because some of them appear overly officious doesn’t mean they won’t respond to a friendly word, a little flattery, or a box of candy. What is the government’s remedy if you don’t perform under the contract scope? If you’ve screwed up, it’s far better to acknowledge your mistake, make an apology and get things back on track. You don’t want to make it the personal mission of anyone to bury you with regulations. The government is to serve us rather than the other way around, so make it as easy as possible.

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