Obtaining Federal Government Contracts for Cleaning Companies (Part Two)
In Part One of this series, we looked at many of the necessary steps to obtain federal janitorial cleaning contracts. This alone can be a daunting task, and your work has just begun. Procuring government contracts typically involves three techniques: the Invitation For Bid (IFB's), Request For Proposal (RFP's), and for small jobs, simply oral solicitation.
The IFB and RFP are very similar, in that they are part of a sealed-bid process where contracts are awarded to the chosen bidder. IFB's include the specifications of the particular contract and instructions on how to prepare the bid. The conditions of the contract, payment schedule, and the date and time of the bid opening are also included. Oftentimes with smaller contracts, the government is simply seeking the lowest cost. This is primarily the difference between an IFP and an RFP. An IFP is looking for the lowest cost as long as the minimum criteria are met. The sealed bids are then opened in public at the designated time stated in the IFB. The particular facts of each bid are read aloud and recorded. The company with the lowest bid will then be awarded the contract.
The RFP is very similar in nature. Again, the specifications are clearly spelled out, as are the conditions, payment schedules, and dates and time of the bid opening. The difference is an RFP is not necessarily asking for the lowest bid, but rather the BEST VALUE. What this means is that while the basic needs of a contract may be met, there are differences that can make one bid a better choice over another. For example, one bid may include certain periodic work, such as floor work, carpet extraction, furniture cleaning, etc. that may not be in the bid specifications, but when included in the proposal they become a more cost-effective compared to having the same work done as an extra. Another consideration may be certain technologies or management/administrative functions that one company may have over another. In other words, there is some discretion involved as to being awarded a contract through an RFP. An RFP oftentimes allows a bidder to incorporate their goals and business strategies into their proposal, thereby giving the procurer additional information to make their decision with. The same process remains, where the sealed bids are opened at a designated place and time and contacts are awarded based on the above criteria.
Lastly, small contracts may be awarded by what is known as oral solicitation. The same criteria are in effect as in IFB's and RFP's—namely the specifications, terms, dates, etc., but they are used to streamline the decision-making process. Obviously you must be comfortable and competent with oral presentations, and be able to quickly think on your feet. You may also be asked to provide an oral presentation in conjunction with an IFB or RFP, but this is good thing as it means you are in the running for the contract!
As you can see, obtaining government contracts involves a lot of work and a lot of bureaucratic red tape. While the decision-making process is usually far more informal in the private sector, government contracts demand a lot of exacting work. The profit margins are typically lower than in the private sector, but on the flip side, the contract lengths are set and longer in duration, as well as the fact you will get paid on a regular schedule. Just keep these facts in mind when you decide to pursue government contracts, and take advantage of resources such as the SBA. Most of all, do your homework!
Now that we've discussed how to become eligible to bid on contracts and the procedure to do so, we will discuss how to find contracts to bid on in Part Three.
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