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5 Ways to Open Public Contracts to Local Business (Contributed)

Getting on government contracts can be mysterious for small vendors. Digitizing RFPs and thoughtful outreach can bring more local companies to public-sector contracts, benefiting both agencies and communities at large.

Government contracts exist for everything from school whiteboard markers to paving roads and building infrastructure. State, local and education (SLED) and federal work is a multi-trillion-dollar industry when you add up contracts available through local municipalities, school districts, highway authorities, public works, and state and federal departments. With so much work available, it’s surprising to find that contracts are often awarded to a small circle of suppliers. Why? Because these contracts are hidden inside a fractured marketplace where every government maintains its own siloed supplier base. When only a handful of businesses even find out about these government contracting opportunities, competition is stifled and value is lost.

Local government functions best when it harnesses the full strength and diversity of its local business community. More competition for contracts means greater savings for the government and better outcomes for the people they serve. 

To effectively open doors to more businesses to serve their jurisdictions, governments can work together and present a unified “front door” to their local business communities. Centralizing supplier lists is an important first step, so that a local businesses can register once to gain access and visibility to the many local governments and billions of dollars of government contracting opportunities in their area. 

Greater visibility into the government contracting process will level the playing field, so a greater diversity of businesses can participate. This is optimal as it will save the government money, in turn saving taxpayer dollars. Additionally, by supporting local and small businesses when feasible, government contracts can also bolster the local economy. These are all positive outcomes that can be cultivated by simply addressing accessibility and transparency in the bidding process and making it easier for vendors to submit proposals. 

Here are five ways government entities can level the playing field for their local businesses:

1. Broadly advertise projects

While contractors may know how to pitch private-sector work, they often don’t know where to look for public-sector projects. Government purchasing agents can help by advertising projects more broadly. Think about the private sector. A human resources department wouldn’t post on just one job platform and choose from only those applicants. It’s highly likely that they would advertise the role in several places (think LinkedIn, Indeed, Monster and Craigslist, with recruiters and on industry-specific job boards) and collect a large number of applicants to choose from. Government projects should be approached in the same manner. This will increase accessibility and allow for more choice on the government’s side. This could also lead to more competitive estimates, helping government entities make the most of their budgets and save taxpayer dollars.

2. Standardize the bidding process

Researching and drafting a government proposal can be challenging for potential contractors, as the bidding process is often different for each type of proposal and each government agency. By offering a standardized electronic bidding, or e-bidding, process, the government provides a level of transparency to potential contractors, allowing them to learn how the request for proposal (RFP) cycle works, and what to expect for each job they submit. A great way to do this is with automated e-bidding and matching software. Once contractors learn and get comfortable with the user interface, submitting RFPs for projects will become a much less daunting process.

3. Digitize RFPs and make them easily accessible

Contractors can struggle finding all available opportunities with government entities. Not only are there many separate places for them to search, but not every RFP is accessible online. By digitizing RFPs, putting federal and SLED requests in one place, and making them easily accessible through an online portal, government purchasing officers will be able to direct contractors to one central location. The digitization process also streamlines the bidding process on the contractors’ end. An electronic bidding solution will allow them to save and reference previous RFPs for easy application and adjustment for future bids.

4. Reach out to small businesses

Not all jobs require a big company. In fact, sometimes a small business is just what you need to get the job done at the right price. Smaller businesses tend to have fewer employees and less overhead, and thus may be able to complete the job at a more competitive rate. However, since they have fewer employees and usually run lean, they might not have time to sift through the SLED bid postings on a regular basis. Government purchasing agents can ensure that all contractors, including small businesses, see bidding opportunities by engaging with online bidding software. This type of service can hold an electronic list of potential contractors and their areas of expertise. When government procurement agents enter their RFPs, the service can send an alert to all matching contractors, giving small businesses the chance to apply.

5. Participate in shared purchasing networks

Another beneficial way for governments to become easier to work with is to participate in cooperative purchasing networks, strengthening and streamlining municipal supply chains. This means that government sectors could come to a joint arrangement and send out one bid and then share the final deliverables. For example, instead of each school district submitting an RFP for classroom supplies, perhaps they come together as a collective at the county level. This will allow contractors to submit one proposal instead of many, saving them time and effort, and will likely result in a bulk rate benefiting the government and taxpayer. 

It’s easy

Vendors shouldn’t have to be “in the know” or have a pre-existing connection to work with federal and SLED agencies. Government procurement officers can make it easier for vendors to submit RFPs with a few changes to their process. By engaging with e-bidding software, government entities can streamline the process giving vendors the accessibility and transparency they need to participate. This will also help agencies connect with local small businesses, supporting the local economy. Finally, through easing the process, government purchasing agents can open the doors to receive more competitive pricing, making the most of their budget and saving taxpayer dollars.

Ben Vaught is president and CEO of e-bidding software company DemandStar. He founded DemandStar as an independent firm to continue growing a network of government buyers and suppliers. Previously, he was director of government initiatives at Onvia, a public-sector business intelligence firm. He holds an MBA from the University of Washington Foster School of Business and dual bachelor’s degrees in English and government from Georgetown University.