Corrections or additions?
This article by Evelyn Goldin was prepared for the September 20,
2000 edition of U.S. 1 Newspaper. All rights reserved.
Workshop: How to Get Government Work
Think New Jersey State Government is a potential source
of business for your small company? It just may be. The state’s
purchasing staff spends in the neighborhood of $1 billion each year,
buying a staggering array of goods and services that state agencies
need to keep humming. And that’s just for starters. The annual
purchase amount rises substantially when school districts, counties,
and municipalities exercise their rights to “piggyback” on
state contracts.
Sounds promising, right? But where does the average small business
begin in its quest to do business with the state government?
There are actually two first steps a small business should take, says
Patrick J. Guidotti, director of the Office of Small Business
within the New Jersey Commerce & Economic Growth Commission. As part
of Trenton Small Business Week, Guidotti will spell out all the
details
at a seminar called “Marketing for Government and Corporate Bid
Opportunities” on Tuesday, October 3, at 9 a.m. at the New Jersey
Commerce offices in the Mary G. Roebling building at 20 West State
Street in Trenton.
Guidotti’s advice for prospective vendors:
Fill out a Bidders Mailing List Application, which canbe downloaded from the treasury department’s division of purchaseand property web page. “It’s a simple one-page form,” Guidottisays. The application doesn’t guarantee that Requests for Proposals(RFPs) will flood your mailbox — its only purpose is to providethe state with basic information about each vendor, which is thenentered into the Purchase Bureau’s database(www.state.nj.us/treasury/purchase).One potential pitfall in this step: Item 10 of the application. ThePurchase Bureau warns would-be bidders to “carefully considerItem 10,” which asks companies to categorize themselves accordingto a five-digit code of goods and services. Don’t try to stack theodds in your favor by entering under numerous categories that don’trealistically reflect what your company has to offer.”It is important that you carefully select only relevant codessince your firm’s name will be automatically purged from theapplicablemailing list if you fail to respond to three consecutive opportunitiesto bid for a particular product/service,” the Purchase Bureausays ominously.Apply to be listed on the database of NJSAVI, the Officeof Small Business Selective Assistance Vendor Information, to broadenyour exposure and increase your chances for a bidding opportunity(www.njsavi.org). The SAVI database, Guidotti says, is where agenciesgo when they are looking to fulfill “set-asides.”Set-asides fulfill the New Jersey regulations requiring that a minimumof 25 percent of the total number of state contracts and purchaseorders be allocated to (“set aside” for) small, minority,and female businesses, with a specific breakdown as follows: 15percentfor small businesses; seven percent for minority businesses; and threepercent for female businesses.The SAVI database, which serves state departments, colleges,authorities,commissions, county and municipal government, boards of educationand private corporations, identifies businesses eligible for suchlegislatively mandated state programs, as the New Jersey SmallBusinessSet-Aside Program and the New Jersey Unified Certification Program.The requirement for listing on the NJSAVI database, Guidotti says,is “100 employees or less, with the principal place of businessin New Jersey.” To be certified as a women or minority-ownedbusiness,be prepared to prove ownership, independence, managerial control andoperational control.”We are driven by the New Jersey Set-Aside Act, which gives usgoals for doing business with small businesses, women andminorities,”Guidotti says. What NJSAVI does is create a marketing device for thevendors of businesses that are essentially pre-certified to fulfillSet-Aside requirements.Guidotti says agencies also seek to meet a goal of contracting 15percent of every dollar with a small, women, or minority-ownedbusiness.In his 35 years of service with the state, Guidotti has servedas a commissioner on the Governor’s Study Commission on Discriminationin Public Works Procurement and Construction Contracts and as a memberof the Governor’s Advisory Council on Minority Business, and hasworkedin contracting for three state agencies. But he also has “realworld” experience — he is the former owner of a liquor storeand was a building contractor, as was his late father. His motherowned a beauty parlor for 35 years.Just applying to the Bidders Mailing List and the NJSAVI database,he says, does not entitle a small business owner to rest on hislaurels.”The best thing to do is not to just sit back and wait and lookat the mailbox,” Guidotti advises. Instead, check the PurchaseBureau’s web pages to see bid solicitations. “You can call thedifferent agencies and let them know you’re on Commerce’s approvedlist as a certified vendor.”The Office of Small Business is also willing to share its list ofall state agencies and purchasing directors. That gives small businessowners the opportunity, Guidotti says, “to start picking off thoseagencies, depending on what type of business they’re in. If they’rein construction, they could target the Transportation Department andthe Turnpike Authority and people like that.”The next step, says Guidotti, is to market your business. “Starttargeting and making phone calls and trying to set up meetings withthe purchasing folks. Bring in brochures and catalogs. Selling tothe government is very similar to selling to the private sector.”After informing the buyer that your business has been certified bythe Commerce Commission and outlining the range of goods and servicesthat you offer, you may still not get a phone call, not even afterseveral months.”Call them again,” says Guidotti. “The squeaky wheel getsthe grease.” Guidotti notes that contracts executed in this mannerwill likely fall under the “purchase order” category. Purchaseorders are relatively informal contracts for amounts less than$25,000,with the vendor receiving a short list of specifications for the job.”Payment is 30 days or less, usually,” Guidotti says, adding”all the government agencies now are pretty fast.”Be warned that contracts over $25,000 become more complex, and moreexpensive to bid on. More expensive contracts generally require bothbid security and a performance bond. Bid security is a certified checkin the amount of 5 to 10 percent of the value of the bid, held bythe contracting officer until a decision has been made to award thecontract.Bid security may tie up funds temporarily, but the price ofperformancebonds — which generally cost between four and six percent of thevalue of the bond — is never returned. “On a $100,000contract,that can be a $5,000 expense” that business owners never get back,Guidotti says, adding “you have to factor that into your bid.”The performance bond is costly but necessary. “The performancebond protects the taxpayer so the company will do the job right,”Guidotti says. “Otherwise we have to throw you off the job andget somebody else in and pay more money — because you were thelow bidder.”More vocabulary to learn in the state bidding lexicon: Term contractsand multisource contracts. While New Jersey has no central sourceof buying power, the state’s Purchase Bureau is the closest thing.The Purchase Bureau establishes so-called term contracts —generallya year or two in length — for commodities and services neededon a consistent basis. The 16 departments of the state are requiredto use the term contracts for items costing above the $25,000threshold.But other government entities — agencies, commissions,authorities,state colleges, and municipalities, among others — have the optionof using term contracts, thereby saving the time and paperwork ofconducting their own bidding process.”Someone who bids for a state contract might not get any workfrom the state, but they might get it from a municipality,”Guidottisays. Under multisource contracts, the state sets up a network oflow bidders across the state, enabling far-flung entities to obtainthe goods they need in a timely manner from a nearby vendor. “Youmay be on a multisource term contract and never get a call, dependingon where you are,” says Guidotti.”Or you may get a lot of calls. You may get a call from amunicipality,or a police department.” Still confused? The New Jersey Commerce& Economic Growth Commission wants to help. “We do a lot ofworkshopsjust on this,” Guidotti says, “Workshops called `DoingBusinessWith the Government.’ We are responsible for creating marriages allover the state.”— Evelyn GoldinPrevious StoryNext StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
