States and localities spend upwards of $3.25 trillion annually on goods and services. And the bulk of this purchasing flows through contracts. Therefore, it’s critical for companies selling into the public-sector market to understand how the contracting process works and how their target customers prefer to buy.
The latest installment of e.Republic’s 10 Laws of Government Sales and Marketing webcast series tackled this crucial issue. Karen Jackson, former secretary of technology for the commonwealth of Virginia, and Ron Littlefield, former mayor of Chattanooga,Tenn., joined e.Republic Vice President of Research Joe Morris to offer a real-world look at how to build a contract strategy that works.
Polling conducted in advance of the webcast shows that contract challenges are significant. Many survey respondents said they struggle to navigate the buying process and connect with the right officials.
Given those results, it’s not surprising that most respondents also lacked confidence in their government contracting strategy. Just 35 percent considered their strategy highly effective.
Here are three take-aways from the webcast that can help you build a more effective contracting strategy and ultimately win a bigger share of billions of dollars in government purchasing.
— Governments have multiple contracting options; understand which they prefer
“The number of contract vehicles that were available to us was probably in the thousands,” says Jackson. Her options included statewide contracts, multi-state cooperative contracts, federal purchasing contracts offered by the U.S General Services Administration (GSA) and even local government contracts that were open to other public-sector buyers.
Perhaps surprisingly, Jackson says the state frequently took advantage of local government purchasing contracts under the right circumstances. “If there was a good contract that a county or other local government had, we would often leverage those — especially for things that needed to be done quickly and were pretty clear cut.”
Littlefield had a similar array of purchasing options in the city of Chattanooga. He says local contractors were the city’s first buying option. If those suppliers couldn’t meet requirements, officials would broaden their search to state contracts. They typically did not buy from federal GSA contracts. The bottom line here is to understand which contracts typically are used by your target buyer. One way to understand buyer contracting preferences is to take advantage of the move toward greater transparency in the public sector. Many procurement departments post contracting data and other valuable information online. Also look for “checkbook” sites that report how states or localities spend their budget dollars.
Investigating these data sources can often give you a good idea of which contracting options are most active for a particular jurisdiction.
— Get to know the procurement office
Another way to learn how procurement officials want to purchase is to ask them. Requests for proposals often list a procurement contact. Littlefield suggests chatting with those contacts and others to understand what kind of solutions they’re looking for and their preferred purchasing methods.
“Government processes can be a little bit intimidating. They’re often beyond the comfort level of many in the private sector because they really don’t know what’s acceptable,” he says. “But I encourage you to push through and reach the person who’s making the decision.”
Jackson agrees, adding that forging relationships with procurement officials and staff gives companies insight into the best way to target their efforts. “Creating a strategy is a big challenge, especially for smaller companies because they don’t have the staffing and breadth of resources to do it. But building relationships can help you transcend those hurdles,” she said. “And it’s important to have strategy, instead of just responding to more and more bids.”
— Educate buyers and let them educate you
Both Jackson and Littlefield also recommend that companies offering new types technologies and solutions try to educate public officials through meetings and demonstration projects, which also can help shape contracting opportunities.
“When I was secretary of technology, things were changing so fast in the technology space that it was sometimes very helpful just to have people come in and tell us what was going on, because innovation was usually happening faster in the private sector than in state government,” says Jackson. Those conversations helped Virginia officials understand how emerging technologies would impact them in the future. And in return, companies often received advice from Jackson on how to approach state purchasing. “We spent a lot of time just helping people understand where to go in the procurement process with a new technology.”
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