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 can

be downloaded from the treasury department’s division of purchase

and property web page. "It’s a simple one-page form," Guidotti

says. The application doesn’t guarantee that Requests for Proposals

(RFPs) will flood your mailbox — its only purpose is to provide

the state with basic information about each vendor, which is then

entered into the Purchase Bureau’s database

(www.state.nj.us/treasury/purchase).

One potential pitfall in this step: Item 10 of the application. The

Purchase Bureau warns would-be bidders to "carefully consider

Item 10," which asks companies to categorize themselves according

to a five-digit code of goods and services. Don’t try to stack the

odds in your favor by entering under numerous categories that don’t

realistically reflect what your company has to offer.

"It is important that you carefully select only relevant codes

since your firm’s name will be automatically purged from the

applicable

mailing list if you fail to respond to three consecutive opportunities

to bid for a particular product/service," the Purchase Bureau

says ominously.

Apply to be listed on the database of NJSAVI, the Office

of Small Business Selective Assistance Vendor Information, to broaden

your exposure and increase your chances for a bidding opportunity

(www.njsavi.org). The SAVI database, Guidotti says, is where agencies

go when they are looking to fulfill "set-asides."

Set-asides fulfill the New Jersey regulations requiring that a minimum

of 25 percent of the total number of state contracts and purchase

orders be allocated to ("set aside" for) small, minority,

and female businesses, with a specific breakdown as follows: 15

percent

for small businesses; seven percent for minority businesses; and three

percent for female businesses.

The SAVI database, which serves state departments, colleges,

authorities,

commissions, county and municipal government, boards of education

and private corporations, identifies businesses eligible for such

legislatively mandated state programs, as the New Jersey Small

Business

Set-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 business

in New Jersey." To be certified as a women or minority-owned

business,

be prepared to prove ownership, independence, managerial control and

operational control.

"We are driven by the New Jersey Set-Aside Act, which gives us

goals for doing business with small businesses, women and

minorities,"

Guidotti says. What NJSAVI does is create a marketing device for the

vendors of businesses that are essentially pre-certified to fulfill

Set-Aside requirements.

Guidotti says agencies also seek to meet a goal of contracting 15

percent of every dollar with a small, women, or minority-owned

business.

In his 35 years of service with the state, Guidotti has served

as a commissioner on the Governor’s Study Commission on Discrimination

in Public Works Procurement and Construction Contracts and as a member

of the Governor’s Advisory Council on Minority Business, and has

worked

in contracting for three state agencies. But he also has "real

world" experience — he is the former owner of a liquor store

and was a building contractor, as was his late father. His mother

owned 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 his

laurels.

"The best thing to do is not to just sit back and wait and look

at the mailbox," Guidotti advises. Instead, check the Purchase

Bureau’s web pages to see bid solicitations. "You can call the

different agencies and let them know you’re on Commerce’s approved

list as a certified vendor."

The Office of Small Business is also willing to share its list of

all state agencies and purchasing directors. That gives small business

owners the opportunity, Guidotti says, "to start picking off those

agencies, depending on what type of business they’re in. If they’re

in construction, they could target the Transportation Department and

the Turnpike Authority and people like that."

The next step, says Guidotti, is to market your business. "Start

targeting and making phone calls and trying to set up meetings with

the purchasing folks. Bring in brochures and catalogs. Selling to

the government is very similar to selling to the private sector."

After informing the buyer that your business has been certified by

the Commerce Commission and outlining the range of goods and services

that you offer, you may still not get a phone call, not even after

several months.

"Call them again," says Guidotti. "The squeaky wheel gets

the grease." Guidotti notes that contracts executed in this manner

will likely fall under the "purchase order" category. Purchase

orders 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 more

expensive to bid on. More expensive contracts generally require both

bid security and a performance bond. Bid security is a certified check

in the amount of 5 to 10 percent of the value of the bid, held by

the contracting officer until a decision has been made to award the

contract.

Bid security may tie up funds temporarily, but the price of

performance

bonds — which generally cost between four and six percent of the

value of the bond — is never returned. "On a $100,000

contract,

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 performance

bond protects the taxpayer so the company will do the job right,"

Guidotti says. "Otherwise we have to throw you off the job and

get somebody else in and pay more money — because you were the

low bidder."

More vocabulary to learn in the state bidding lexicon: Term contracts

and multisource contracts. While New Jersey has no central source

of buying power, the state’s Purchase Bureau is the closest thing.

The Purchase Bureau establishes so-called term contracts —

generally

a year or two in length — for commodities and services needed

on a consistent basis. The 16 departments of the state are required

to use the term contracts for items costing above the $25,000

threshold.

But other government entities — agencies, commissions,

authorities,

state colleges, and municipalities, among others — have the option

of using term contracts, thereby saving the time and paperwork of

conducting their own bidding process.

"Someone who bids for a state contract might not get any work

from the state, but they might get it from a municipality,"

Guidotti

says. Under multisource contracts, the state sets up a network of

low bidders across the state, enabling far-flung entities to obtain

the goods they need in a timely manner from a nearby vendor. "You

may be on a multisource term contract and never get a call, depending

on where you are," says Guidotti.

"Or you may get a lot of calls. You may get a call from a

municipality,

or a police department." Still confused? The New Jersey Commerce

& Economic Growth Commission wants to help. "We do a lot of

workshops

just on this," Guidotti says, "Workshops called `Doing

Business

With the Government.’ We are responsible for creating marriages all

over the state."

— Evelyn Goldin


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