Selling to Municipalities

Selling to Municipalities

By Diane M. Calabrese / Published April 2022

Photo by iStockphoto.com/Roberto Galan

Schools, residential snow plowing, building construction parameters, and more fall under the purview of local government. 

     Municipality is the shorthand term for local government. And the thousands and thousands of municipalities across the nation require cleaning services (and equipment). What’s it like selling to municipalities?

     Good, a bit complicated, and occasionally vexing. It’s a lot like selling to any entity from a homeowner to a large corporation. Here, three members of our industry offer perspective based on their extensive experience. 

     Brevard County, FL, hugs the east-central coast of the Sunshine State. It’s an exceptionally interesting place to be anchored because it affords an easy view of rocket launches. Ryan Wilkins, owner of Beacon Roof and Exterior Cleaning Solutions, Rockledge, FL, is based there.

     Wilkins takes on a range of fascinating commercial, industrial, and municipal jobs in his region. Among the municipal clients are several school districts. 

     Working with municipalities across the years has been an excellent experience, says Wilkins. For one, it has helped him to hone his approach. “One thing I’ve learned is to be extremely efficient with labor, equipment, and chemicals,” he explains.

     “Efficiency is the first and foremost” part of any municipal project, says Wilkins. And he adds that encompasses a “timely” approach.

     “Nine times out of 10, municipalities are looking for the low bid,” explains Wilkins. He adds that 80 percent of the time the contract is made via an RFP [request for proposal] process.

     It’s not just “planning, logistics, and timing” that must be well thought out, says Wilkins. But a contractor must be certain to meet all the prerequisites for submitting a proposal.

     The requirements typically include specific amounts of insurance that must be maintained by the contractor in more than one category (e.g., general liability, workers’ compensation). Some entities also require the contractor to pay prevailing wage and to provide documentation of payments.

     Payment from municipalities is reliable. “You don’t have to worry about getting paid,” says Wilkins. 

     Once a contractor is familiar with the format, budgeting, and expectations of municipalities, meeting their proposal requirements becomes easier. In addition, explains Wilkins, because the budgets of municipalities are public, a contractor can approximate quite closely to the range of a competitive proposal. 

     Although most municipalities select contractors through RFPs, word-of-mouth references can be important. “From time to time, we have had smaller school districts seek us out,” says Wilkins. 

     Working with municipalities is a very good way to fill up a calendar. “They keep you rather busy,” say Wilkins.

     Moving west to the Lone Star State, we find things much the same in terms of the many positives in selling to municipalities. “We have experienced no downside to working with them,” says Doug Rucker, owner of Clean and Green Solutions in Porter, TX. 

     Plusses take precedence. “Municipalities are very easy to work with, pay promptly, and are usually very understanding of any scheduling issues that may come up from time to time,” says Rucker.

     Being attentive to the needs of municipalities adds a dimension to service at Rucker’s company. “We do provide 24/7 emergency service for them, but that is rarely needed,” he says. 

     “Municipalities value great work and the relationship and provide a lot of repeat work,” says Rucker. “The key, I’ve found, is to treat them fairly in pricing, and don’t just assume because it’s a municipality it can be carte blanche on pricing.”

     The relationship-building that takes place over time is as important—perhaps more important—with municipalities as with any client. “They can be very loyal to the service providers that serve them,” says Rucker.

     Keep in mind that when providing service to a municipality, a contractor is actually providing a service to the members of a community. If something is amiss, the municipality should be made aware because it will certainly get feedback from residents at lightning speed.

     Rucker explains it this way: “Prompt communication is also huge with municipalities, and something they value highly. They have a lot on their plate, so making things as easy as possible on them is huge.”

     Initial contact with a municipality varies from place to place, as noted, and with the nature of the project. And Rucker’s experience differs from Wilkins’, but both point out the importance of referrals.

     “All of our requests have been from being approached directly,” says Rucker. “We do a lot of work for municipalities, graffiti removal being one of the most common projects, and all have come through direct contact either through our website, referral from other municipalities, or online directories we are part of.”

Equilibrium Point

     Establishing the point at which a contractor can respond to bid requests or RFPs from a municipality, win some but not all contracts, and make a profit is a true balancing act. Once the equilibrium point is identified, interaction with municipalities can be very good.

     It takes fortitude and an ability to incorporate some disappointment. It also may include a component of luck, being in the right place at the right time.

     John Cloud, president of Gorilla Kleen in Sarasota, FL, says that he is “a bit opinionated about working with municipalities,” but he shares some thoughts that are relevant to going into the sector with open eyes. For one, he has concern about the “low bid” approach.

     Responding to an RFP may take more time than responding to a request for a bid, but an RFP generally indicates a municipality will be evaluating respondents on more than just the lowest dollar amount. Too often, says Cloud, well-thought-out prices are rejected in a simple-bid process because the evaluators overlook what they would be getting for the price.

     Cloud simply advises being realistic. Make a bid if the work is a good fit, but don’t be drawn into underbidding to get the contract.

     Some bid requests may be unusual. That can be a sort of warning. Cloud says he recently reviewed one bid request that illustrates the point. The short text described the need for a contractor to clean approximately 50 utility sites—each unique in structure and size—which were spread across the municipality (wide area). 

     To try to get more information to consider whether to construct a response and a bid, Cloud called the municipality. “The municipality wanted a square-foot price to clean but did not and would not—when called—provide any minimum amount,” he says. “So, do they expect me to drive 60 miles and clean 275 square feet for eight cents per square foot? No answer.”

     Using Google Earth, Cloud tried to gauge the size and scope of each site. He then submitted a proposal. “My final bid was perhaps $150,000 or something like that. There were three bids lower than $30,000 with two of them at around $11,000.” 

     What will happen? “There is no earthly way that anyone could do any of that work for those numbers,” say Cloud. Thus, he believes the contractor who got the award will be unable to complete the project and another bid request will be issued down the road—all while many of the sites do not get cleaned.

     Cloud has witnessed the same low bid award, project not completed scenario in the past. In the early days of his business, he did not get the award on a sidewalk cleaning contract, including graffiti and gum removal and night work. The disparity in bids was something like $230,000 (his for three years) and $60,000 (winner for three years). Four months later that winner with the low bid had failed to do the work.

     After a second try and low bid awardee with failure to complete work, the municipality changed course. “They shifted to an RFP approach,” says Cloud. “That means that each company presents a turnkey proposal price, and the municipality can select which of those proposals they deem to be the right one. They are not bound by the low bidder.” 

     Again, things vary by state, but in Florida there are special considerations that give a boost to contractors who invest the time in winning their first award. If the contractor has a contract with one government agency, another state agency can use the contractor without getting a competitive bid. (This helped some contractors get additional work fast during the pandemic, when agencies required more contractors for cleaning, fogging, etc.)

     For contractors who choose to provide bids and responses to RFPs, building a reliable database (menu) of how long each task takes and how many employee hours are dedicated to it is a must. Figure the cost of the task per hour, including all costs (i.e., entire compensation package, travel). 

     Cloud looks at the many experiences he has had selling to municipalities via bids and RFPs with a firm sense of resolve. Sometimes it will not be possible to understand how a lower bidder can complete the work, especially when factoring in equipment requirements some municipalities provide to the contractor. (Things do not add up.) 

     Yet a solid proposal or a well-structured bid tied to excellent work does often win the contract, explains Cloud. Focus on that.

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