The Ins and Outs of Working with the Government

More than likely, most of you have had some experience working with government entities, local municipalities, or other public agencies of some sort over the years. If so, you’ve probably had both positive and negative experiences.

As such, it may be difficult to determine whether or not your business should focus on a plan to earn more business from these types of entities. This month, I’ve outlined the pros and cons of working with government and other public agencies, and provided some tips that may improve your experience.

Cut through the red tape
One of the most significant challenges that comes to mind when pursuing public-sector contracts is the sheer number of bureaucratic hoops through which you must jump if you wish to do business with them. Some are very streamlined and let you know exactly what’s required up front. But others are less organized and don’t let you know about the paperwork or qualification processes you must go through until late in the game. In the worst cases, you’ve already delivered the job and you’re waiting to be paid when you finally learn about these things.

Regardless of when you find out, you usually have a lengthy, time-consuming process that often requires pages of documentation and qualification criteria even for the small jobs. This can be a real headache. On the positive side, however, once you go through this process and become a “qualified vendor,” you typically don’t have to repeat the process, other than an annual renewal or update in some cases.

There are also frequent financial challenges to overcome. For example, with government or public entities, the pay cycle is generally lethargic. The approval processes can be extensive and drawn out, and, in my experience, the typical payment cycle usually ends up being closer to 60 days than 30. Additionally, I’ve found that more and more government and public entities are turning to online bidding scenarios for their graphic needs (and we all know how much fun those are). Where there used to be favorable margins in these jobs, now, I find, there seems to be a movement toward bid-management companies handling the bidding, pricing, and awarding of jobs. This can drive the price of a project down to margins well below your targets.

Another disadvantage you may run into when working with public entities is the knowledge base—or lack thereof—of the people you’re working with. Chances are, the people you’ll be dealing with in the public sector simply don’t have a background in graphics. They’re more likely to be just another cog in the wheel of the government machine—part of a purchasing team responsible for the acquisition of anything and everything. This presents its own set of problems and can often result in a job going completely sideways simply because the person you’re working with doesn’t understand what they’re ordering. Avoiding this type of scenario requires extra special care and patience in managing the job.

On the bright side
Despite this laundry list of difficulties, there are a number of positives you can use to your advantage. For starters, even though you may end up getting paid late, with a government or public entity, you are almost always assured that you will, in fact, get paid. If you can deal with the red tape necessary to get the job properly produced and invoiced, the risk of having the account go bad is very low. In today’s economy, that can be a sizeable advantage.

Speaking of the economy, government and other public agencies certainly have been affected by the recession like everybody else, but in many cases, it seems they’ve been less influenced than the private sector. This puts them in a somewhat unique position: They still have money to spend. Business with most government and public entities has, for the most part, plowed on despite a slow economy, resulting in the continued purchasing of graphics. Certainly, budgets have been trimmed and there is increased sensitivity to prices, which may explain the recent move toward more bidding scenarios and the use of outside companies to manage that process. All signs point to the reinstatement of many government and public projects in 2010, though, and this means there’s work out there to be produced.

I mentioned earlier that you may very well end up dealing with an unsophisticated buyer when you work with a public entity and that can present some obvious challenges. On the flip side, though, you can use such a situation to your advantage. For example, this type of buyer is typically much less critical of image resolution, color correctness, banding, and those other things that make you want to just scream, “Hey, it’s just a sign, it’s not going to be hanging in the Louvre!” This type of customer will likely take a more practical approach to what their graphics should look like. They are, in fact, relying upon you to be the expert, and generally will understand when you explain to them the challenges of a particular product and how it’s being produced.

Pay attention to the details
Let me conclude by sharing some tips to help you secure more government business. First, figure out early in the game the requirements—the proverbial red tape—your company needs to navigate in order to be eligible to do business. It’s not unheard of to get the people you’re working with to walk you through the vendor-qualification process. Be sure to ask for help so you can avoid the inevitable pitfalls and become quickly qualified. Pay particular attention to the requirements of the accounting department. Taking time in the beginning to accurately complete and submit all the paperwork—be it purchase orders, invoices detailed a certain way, sales-tax issues, or other forms—can be the difference between getting paid quickly, or waiting months for a check.

Second, learn about the various websites that are used for government and public bids for graphics. Most of these are state or region specific, but getting registered and qualified on these sites early can save the hassle of dealing with online registration requirements when a bid is due in a short period of time. For better or worse, this seems to be the future of awarding projects for many state and local entities, so you better jump on board quickly if you want to compete in the government market.

Along with the qualification process, it can be advantageous when securing public work if your company becomes certified in a special category (e.g., small business, minority-owned business, disabled-veterans business, etc.). In most vendor-qualification processes or bid procedures, there are boxes to check for these designations. If you are able to qualify for one of these categories, you may have a distinct advantage in securing work. I am familiar with one competitor’s business that names the wife as a 51-percent owner and the husband as a 49-percent owner in order to secure a minority-owned business designation. Having such a designation has helped them land work with government entities, because those public sector groups are often required to award a certain dollar amount of their total annual expenditures to special-category businesses.

In the end, dealing with government and other public entities can become a profitable income stream for your business if the process is managed properly. These groups are invariably looking for someone to help make their lives easier. As in the private sector, they sometimes award their jobs not to the lowest bidder, but to the company that will make sure the work is done correctly. As you develop and nurture positive relationships with these organizations, they’ll become loyal to your company and do everything in their power to send profitable work your way.

Marty McGhie is VP finance/operations of Ferrari Color, a digital-imaging center with Salt Lake City, San Francisco, and Sacramento locations. The company offers high-quality large- and grand-format photo, inkjet, fabric, and UV printing. [email protected].