While pursuing commercial business, be on the lookout for state and local government contract opportunities for both single award projects and single award multi-year purchase agreements.
You may see an advertisement for a public bid for the remodeling of a local government building in your local newspaper. If you have contacted your local government office, you may get a bid announcement. Perhaps your company’s name has been picked up in a database sweep by the state and you are now on their mailing list. Or you may get a call from your client, a local general contractor, looking for a flooring bid. All of a sudden you have an opportunity for some extra business!
This type of business can have large potential, but may also be extremely competitive, low profit, and a real nightmare. A typical project has multiple bidders and a complicated bid document. If the bid is through your general contractor client, he will do the paperwork and you will bid to him directly. You may have to provide a payment and performance bond.
A single award will generally be made for each class of flooring; for example, if you do carpet, vinyl tile and wall base that would be one award. Sometimes, if ceramic, terrazzo, or other specialty floors are in the specs, the client will need to make multiple awards.
You’ll have a much better chance of getting the business when you are able to handle the entire flooring portion of the project! Most clients would prefer to deal with one reliable contractor rather than multiple companies since they can avoid multiple awards, and lower their risk by increasing yours.
For the retailer devoting time to the commercial arena, a real stroke of luck is when a local government is looking for one company to handle all of their flooring needs. Best-case scenario is that you have already made a sales call or have done some small jobs well for them.
To go after this business, first look at your capabilities. Are you able to provide and install diverse flooring and offer the project management required? If so, be sure and showcase your credentials, both before you submit your bid and along with your bid offer. Many a bid has been won, not by low price, but by the demonstrated ability to perform!
An astute government purchaser was very blunt in their bid solicitation. They let us know that it was not enough to have a low price; rather, we had to tell them how we’d perform the job and in what time span, with what personnel, and how we’d handle any problems and ensure the work was completed correctly.
Never underestimate the value of a preexisting relationship with a client. I had the experience of having a client give me an unexpected call and say, “I’m sending out a bid to your attention and I want to make sure you give us a bid on this work.” One was even more direct: “Dave, we’ve really had some problems with our current contract holder and would like to make a change; we know the quality of your work. How about reviewing the bid and then give me a call?”
Your first step in this case is to review the products specified. Are they specified by brand name to denote quality or are those the products that must be furnished? Will an “or equal” product be accepted; if so, must the product be approved prior to bid closing date? In some cases, especially with large dollar volume bids, the owners have been burned before, so they will be very restrictive of products and will only accept other products that have been submitted and approved at least 10 days prior to bid closing date. You also need to do other research to have any chance of success.
Find out how much (and when) they are going to buy, what they are expecting to pay, and what the probable product purchase mix could be. Some of the information you are looking for may be disclosed in the bid overview or at a pre-bid conference, or from their previous contract. If not, request a copy of the previous bid abstract and the bid award since it is supposed to be public information (if funds are from tax dollars). Look carefully at the bidders, what they bid, how they stated their exceptions, and what was finally accepted by the client for award. You’ll get an idea of what the client is expecting and whether their requirements are realistic.
With any bid, the time to question a bid is before you bid, not after. Most multi-year blanket purchase type bids (the type you should pursue) will provide a pricing menu and a complete scope of what the flooring contractor is expected to do. Read the scope of work carefully, and if a pre-bid meeting is offered or required, be sure and ask questions for clarification. In some cases, questions must be submitted in writing so that answers can be sent out to all prospective bidders; in smaller bids, this will be less formal, so just call up and ask for their explanation.
Once you’ve nailed down the scope of work, get your project pricing well in advance of bid day. Have a conversation with your mill rep. Let them know you are going to aggressively pursue this project. Find out about other potential bidders, and ask pertinent questions about project pricing, terms, and length of price guarantee. If something seems strange, you might as well ask. There is nothing worse than putting together a bid and feeling like the “right price” has eluded you.
Make the mill rep defend his price. Then your choices may be to bid more aggressively or walk away.
There is no substitute for double and triple checking your bid numbers. Have another set of eyes review what you are doing. I watched the low bidder on a project lose the bid because they had neglected to include their bid bond; they had it, but had left it out of the package. Also, make sure the bid is signed and dated, and the right number of copies returned. Deliver the bid in advance of bid closing time – no exceptions!
If a public bid opening is scheduled, always attend and make your notes. Typically, bids are opened, identified, and the menu of prices is read, and attachments are noted to be present. If there is a blatant error or missing information, bring it up at the opening. If not, note it and call the purchasing agent later and discuss your concerns.
After the bid opening, there is usually a 10- to 30-day period before an award is made. If you were not the low bidder, but feel there is justification for you to have the award, now is the time to make this known to your contact and the purchasing agent. Lobby as hard as you can for your point of view; point out any anomalies in the low bidder’s submission.
I once questioned the ability of the apparent low bidder to perform $400,000 of summer work for a school system. I had run D&B profile on the company and it revealed a total annual volume of only $1.25M for the preceding year. I commented, “I just wonder if they have the financial backing and established credit line to bring in $275,000 in flooring products within a six-week period, and the personnel to capably install within eight weeks.” The facility manager and purchasing agent apparently had similar concerns. After they did their review, they found the apparent low bidder was unqualified to perform and we got the contract.
Government projects require diligence, patience and the ability to take the long view, but they can also be very profitable and stable parts of your commercial business.