It’s A Juicy Opportunity! But Should You Agree To All Government Contract Terms and Conditions?

Mmm boy! You’ve come across a great state or federal contract opportunity. But the RFP solicitation requires that you agree to ALL of the government’s terms and conditions as part of your RFP response.  A yellow flag pops up in your head.  But the opportunity sizzles before you-  like a Ruth Chris Cowboy Ribeye.  And you want it!

Sometimes small businesses are so eager to receive a contract from a government agency, or a prime contractor, that they are willing to agree to the offered terms and conditions. This attitude, however, may lead to unreasonable risks for your business.

William Curry, author of “Contracting for Services in State and Local Government Agencies,”(click here for more information about the book) cautions us to not give in so quickly.  Consider indemnification clauses.  Government agencies oftentimes have two versions of indemnification clauses. But they only present the indemnification clause version that requires you to indemnify the government, but does not require the government to indemnify your business.

Businesses with good legal representation are likely to balk at such one-sided clauses wherein they assume considerable risk while the government avoids that particular risk. Curry tells us that it is not unusual, however, for a government agency to have a back-up provision that does provide for mutual indemnification and they are usually willing to use that version if challenged.

Bottom line is this- when faced with contract terms and conditions with such one-sided indemnification provisions, small businesses should consider asking the government to substitute an indemnification clause that pertains equally to both parties in the contract.  There is a caveat. Not all government agencies have multiple indemnification clause versions and there is no guarantee they will agree to your request.  But it doesn’t hurt to ask.  Above all, it is best to secure legal advice on these matters because we are not lawyers.

img_0826

Advertisements

Hit The Right Target! It’s Time to Reread The RFP Requirements.

Happy Holidays & Winter Solstice All!

I’ve neglected my blogging chores recently, having been busy helping a few clients respond to some state government bidding opportunities before the end of the year.  But, now I’m back and want to share with you a funny experience I had the other day while scanning through a bunch of new opportunities.  It’s literally an eye opening experience that we all should keep in mind!

Now, we all understand that knowing the Request for Proposal (RFP) stated requirements is critical to being selected.  But literally hundreds of state/federal solicitations fly across my iPad screen . . . each one begging my eyes to scan through and assess their need.  But, I don’t have time to read these requests word-for-bloody-word!

So, while speed reading through the requirements, I noted that a potential RFP opportunity is looking for a vendor to conduct SWAT training.  Now, in my head and from a halcyonic prespective, that acronym sounded like Strength, Weaknesses, Opportunity and Threats, an area where my client excels.  Ding, ding, ding, this is a slam dunk!  I can writeup a proposal for my client quickly and get ready for Christmas. Yea, buddy!

But, fortunately, the analytic geek inside of me decided to look into this further . . . slower . . . more intently.  After rereading the solicitation, and this time going all the way down the bottom of the page, it turns out the RFP solicitation actually wants someone to conduct Special Weapons & Tactics training . . . a totally different target (and client).

Lesson learned: read, re-read, then read it again!

Did you have a similar experience?

RFx Terminology – It’s Back-To-Basics

So what is your organization responding to?  Is it a RFP, RFQ, IFB . . . what’s the difference anyway and how does it affect your sales strategy?

img_0841I’ve seen these terms tossed about like multicolor balloons on New Year’s Eve!  But in the contracting world, each balloon is different.  They signal the solicitor’s varied intentions, which can affect your decision to respond to the opportunity in question.  Unfortunately, these terms are not always used consistently and can lead to confusion.

To see how other experts define RFx terminology, I did a quick Internet scan. Below is a high level summary of what I found and my personal comments on each. Take a look but don’t consider them the gospel for RFx terminology.  Instead, use this information as part of your overall research on the solicitation opportunity.  And remember, no matter what they call it, the real meanings will be found in the solicitation details such as: purpose, scope of work, instructions, terms and conditions and vendor selection criteria/process.

Request for Information (RFI) – These are open solicitations that seek broad information and understanding about a problem or requirement. RFIs are used to gather industry data, intelligence and vendor capabilities to help decide what step to take next before embarking on more formal and specific solicitations.  RFI’s are, therefore, seldom the final vendor selection stage, but instead tend to establish the beach head that paves the way for other solicitation types described below.

Bottom line here is don’t expect this to result in a contract, at least not yet.  Instead, think of the RFI as a golden opportunity to introduce your organization to the buyer and contract manager. You will most likely have to respond to another solicitation to win the contract. That’s more work but it may be worth the effort in terms of getting positive exposure and time to propose the best solution.

Request for Quotation (RFQ) is a solicitation opportunity for potential vendors/suppliers to communicate to the buyer proposed costs for a defined set of products and services. I’ve read some industry sources that say the quote you submit is not a binding offer. But I have come across RFQs that included terms and conditions that effectively bind your firm to the price you submitted and confirmed with your signature as an official person authorized to commit your firm. So read the nitty-gritty details!

An RFQ usually contains a specific detailed list or description along with related parameters of the service and or items to be acquired by the purchasing organization. Bottom line, the buyer knows what s/he wants and is most likely doing a price comparison. This is a technique sometimes used to ensure that the incumbent vendor (if there is one) doesn’t overcharge for his/her services or products. The lowest priced vendor usually prevails here.

Invitation for Bid (IFB)– Similar to a RFQ, this solicitation is a method to gather competitive pricing for a specifically defined need and the decision is generally based on price not ideas. I’ve read IFBs are used for procurements greater than $100,000 in value but not all procurement departments follow that rule. For example, we recently won a Texas IFB that totaled about $20,000.

Request for Proposal (RFP) is a solicitation sent to potential suppliers with whom a creative relationship or partnership is considered critical to success. Typically, the buyer knows what s/he wants but is not sure on the approach to get there.  So, the RFP asks competing vendors to state their proposed strategy to achieve the buyer’s goals and objectives.  This also gives the buyer an opportunity to see how their potential vendor partner thinks and to get a glimpse into how the relationship will take shape. In fact, the creativity and innovation that vendors include in their proposals can become a real competitive advantage as the buyer is looking to see if what the vendor is thinking is aligned to the buyer’s needs and organizational culture.  Prior to the RFP due date, I’ve seen and participated in a lot of back and forth with the buying organization to better understand the true intent of the buyer/contracting officer and establish a relationship.

A word of caution here, don’t simply dump boilerplate information, brochures and fancy advertisements in your RFP response to describe your approach.  This is not a high school or college lab assignment where the professor grades your paper based on its weight.   If you do, the buyer and contracting officer will probably knock points off your evaluation score . . . I would.

Having been on the receiving end of vendor RFP responses, nothing angers me more than having to wade through a ton of paper and pamphlets that do not support their approach and strategy.  Nowadays, contracting officers are putting statement into their RFP solicitations that discourages this sort of shot gun approach.  For example, a recent Florida RFP solicitation included the following discreet statement “The Department discourages lengthy Proposals.”  I even saw this statement in a California solicitation, “Due to limited storage space, the proposal package should be prepared using the least expensive method (i.e. cover page with staple in upper left-hand corner, no fancy bindings).” A major university in California went even further saying, “Elaborate bids in the form of brochures or other presentations beyond that necessary to present a complete and effective proposal are not desired.”  And for those who can’t read between the lines, that university went on to say “The bidders ability to follow the bid preparation instructions set forth in this solicitation will be considered an indicator of the bidder’s ability to follow instructions should they receive a contract award.” Get the hint?

Needless to say, if done right, RFPs take more time to: clearly define an aligned and prioritized need set; communicate that need to the competing vendors and allow them sufficient time to formulate an intelligent and innovative response; assess and select the best vendor; and conclude final negotiations.  Effective RFPs typically reflect the strategy and short/long term business objectives and provide insight upon which suppliers can use to enhance their proposals and shine brightly in the buyer’s eyes.

Request for Tender (RFT) is similar to the RFQ where the: work or commodity to be delivered is clearly defined/specified; price carries a high evaluation factor and there is not much room or need for alternative strategies or problem solving techniques. You may read that RFTs tend to be used more in the public sector but I’ve seen more solicitations labeled as RFQs than RFTs in that space.

—-

There are several more types of solicitations but we have covered the basics. Below is a list of the solicitation types I know about. Drop me a line if you find any others.

RFS – request for services
RFQ – request for quotation or request for qualifications
RFP – request for proposal
RFO – request for offers
RFN – request for negotiation
RFI – request for information
RFD – request for documentation
RFA – request for applications
ITV – invitation to vendors
ITT – invitation to tender
IFB – invitation for bids
EOI – expression of interest

img_0828

Gov’t Contract Solicitation Tripwires- Will You See All Contract Opportunities?

So you registered your company in a state vendor registeration portal!  img_0833You listed all the industry codes representing the types of services and commodities you provide, you provided your contact information, submitted your FEIN number, confirmed your email address and jumped through a bunch of other registration hoops. Now, you finally received that confirmation email saying your company is a registered state vendor.

Congratulations!  Now that you’re done, you can just sit back and read the tons of contract opportunities that will soon pile up in your email inbox . . . right?  WRONG!

Just because you are registered in a state’s vendor registration portal, don’t expect to see ALL the opportunities. There are dollar thresholds that states follow to determine if they will advertise a contract opportunity. Each state has a different trip wire. Louisiana says that “procurements of $25,000 or greater are advertised…” California’s State Contracting Manual – Vol. 1, tells us that “contracts under $5,000 are not required to be competitively bid.”

Going after these under the wire contract opportunities now becomes a strategic business decision.  One that should be unique to your operation that depends on things like if the opportunity is in your home state, setasides, the incumbent vendor’s (if there is one) relationship to the client and profit margins associated with winning/servicing the small contract.

Think about it . . . then act . . . or move on!

img_0828

 

Registering With a State To Find Contract Opportunities? It’s Not All One Stop Shopping.

Just because you register with a particular state government vendor portal, don’t expect to see all of the contract opportunities there. A growing number of states (driven by local laws) have indeed setup up agencies and portals to handle (meaning manage the process of issuing requests for vendor proposals then finding, selecting and managing those) contracts across all state agencies.

But that in no way is a guarantee that you will see all contracting opportunities for that state. From state to state, certain agencies are empowered to manage their own vendor contracting opportunities and associated processes- transportation departments (DOTs) being a notable example.

So be on the lookout for those exceptions to a state’s bidding process if you want to ensure you get notifications of all contract opportunities. Scan the state’s FAQ section for hints and pointers to see if you also need to register with other public entities within that state. For example, Washington State’s vendor contractor portal FAQ tells us that: “Not all public agencies in the state are required to post bid notifications in WEBS [that’s Washington Electronic Business Solutions- vendor registration, etc. portal], so you may want to register with other government entities to receive notice of their bid opportunities.” Other examples where agencies manage their own bid contract opportunities include New York State’s Power Authority.

Get Ready, Get Set . . . Go Register Your Company

Thinking of registering your company in a federal or state vendor portal to find business opportunities?

img_0793The good news is you can register your company on-line.  The bad news is you will have to do it over 50 times to cover all the Federal & US states and agencies.

And like doing your taxes, it is best to be prepared. If not, you may be subject to website timeouts, lost information and other maladies if you are not ready with the requested information.

Here is a list of registration information the great state of Indiana requires of companies wanting to bid on state contracts there. And why would you even want to do business in Indiana? Well that’s another blog post.  Indiana’s requirements is by no means a complete list of the things you need to answer, which to be frank, is rather small compared to other states.  But this will give you an idea of the basic pieces of information you should have at the ready:

  1. Legal Name
(and it better be the same as what’s on your W9 form)
  2. Owner’s Gender
  3. Owner’s Ethnicity
  4. Taxpayer ID Number (TIN)
  5. Signed W9 form
  6. CEO Name
  7. Submitter Name
  8. Valid Email Address
  9. Receive orders preference (email, mail or fax)
  10. Indiana Veteran Business Enterprises status
  11. Minority/Women Business Enterprises status
  12. Small Business Information status
  13. Secretary of State Registration Information
  14. NAICS Codes
  15. Mailing Address information
  16. United Nations Standard Product and Services Codes (UNSPSC) information

For more information and helpful hints, follow this blog or click here to contact me.

img_0827