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
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
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:
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
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
mailing list if you fail to respond to three consecutive opportunities
to bid for a particular product/service," the Purchase Bureau
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
for small businesses; seven percent for minority businesses; and three
percent for female businesses.
The SAVI database, which serves state departments, colleges,
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
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
be prepared to prove ownership, independence, managerial control and
"We are driven by the New Jersey Set-Aside Act, which gives us
goals for doing business with small businesses, women and
Guidotti says. What NJSAVI does is create a marketing device for the
vendors of businesses that are essentially pre-certified to fulfill
Guidotti says agencies also seek to meet a goal of contracting 15
percent of every dollar with a small, women, or minority-owned
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
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
"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
"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
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
Bid security may tie up funds temporarily, but the price of
bonds — which generally cost between four and six percent of the
value of the bond — is never returned. "On a $100,000
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
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 —
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
But other government entities — agencies, commissions,
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,"
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
or a police department." Still confused? The New Jersey Commerce
& Economic Growth Commission wants to help. "We do a lot of
just on this," Guidotti says, "Workshops called `Doing
With the Government.’ We are responsible for creating marriages all
over the state."
— Evelyn Goldin
Corrections or additions?
This page is published by PrincetonInfo.com
— the web site for U.S. 1 Newspaper in Princeton, New Jersey.