Tag: state contracts

State and Local Contracts Might Be Worth the Risk!

Posted on by Eric Coffie

With the new changes and new packages being provided to state and local governments, contracts within these areas might be worth the risk!

STIMULUS PACKAGES FOR THE STATE AND LOCAL GOVERNMENT

As everyone already knows, here at GovCon Giants, we preferred federal contracts over state and local contracts. 

There are various reasons why and some of these is the fact that there are always delays in payment whenever someone in the office fails to do the paperwork on time. 

However, given the instances in the past year and the new stimulus packages being provided to state and local governments, contracts within these areas might be worth the risk!

Besides, the government at this point has now passed two stimulus packages. The first one was in March and the other one was in December 2020. Both packages are injecting money back into states and local governments. 

The other thing is that President Biden is now attempting to pass a new 1.9 trillion trillion dollar stimulus package which will surely give a whole lot more money into that for state and local governments. 

“The good thing is that all of you folks have been working, getting paid even if it’s a little bit late. You’ve still been getting paid. They haven’t abandoned you and that’s the wonderful thing. That’s what’s giving me hope about state and local contracting.”

So, to help you navigate this marketplace, written below are the ways you can take advantage of these new opportunities in doing state and local contracts!

ATTEND ANY LOCAL ADVISORY BOARD MEETING

If you’re thinking of going to the local contracting arena, it is best to take a look at the local advisory board for your local city or municipality.

You may have to do some searches or call the local municipal offices, but definitely see if you can get some inside information with the local advisory board for your particular arena and your area. 

Why? Because there’s a lot of good things going on.

For instance, in Miami-Dade County, we have a Small Business Development Center that is designed to help small businesses and a Small Business Enterprise Advisory Board for Construction.

What you will find with these is that these boards usually have meetings that you can attend to. 

First and foremost, you’re going to meet people like you who are starting or already navigating in this marketplace for years. This could also help you learn who are the good contractors from the bad contractors.

“You have to get active. You got to participate. People have to see your face, know your name, and be able to identify you.”

Apart from that, you will also learn how your local government procures goods and services, and that’s so critical if you want to be in this arena. 

CHECK ANY LOCAL SMALL BUSINESS RELATED DOCUMENT

Aside from attending the above-said meetings, you can also check and analyze any local documents related to your industry because they often issue reports and minutes that you can go back into.

Primarily, you can see in these reports the members of the board that are providing their services and are officiating these meetings.

These reports also highlight the issues that were brought forth by the board in which you can start learning and investigating in order to make the best possible decision for your business.

Then, if you also want to see how much contracts were given to set-asides for minority groups, these reports may also highlight this.

Most importantly, these reports also highlight the companies that are doing state and local contracts together with the data related to their businesses, including the total value awarded, costs of work, and percentage completion.

So, if you want to navigate this marketplace, is it best to do your own research using these resources because this may either lead you to your first contract or a possible partnership, among other things. 

“I always remind people to start with the research. Let the research guide your activities.”

THERE MIGHT BE HOPE FOR STATE AND LOCAL CONTRACTS

The gist of this whole article is that if we continue along this trend of bringing on stimulus and propping up the economy, then that’s great news for small business contractors who are considering starting at the local level.

“The government is making sure in putting dollars and putting not just dollars, they are putting their voice behind ensuring that they prop up small businesses to keep the economy flourishing.”

Although you still need to have capital to sustain your business until you get paid, at the very least, we don’t see any time soon that the state and local government will leave small businesses behind because there is so much money flowing around.

RESOURCES

So, with the new packages being provided to state and local governments, GovCon Giants think that doing contracts in these areas might be worth the risk!

However, consider that if there are warning signs of things changing, we definitely want to be here to step in and let people know about the change in climate.

With this in mind, if you want to learn more about this matter, then check the resources below. 

You can also join us here at GovCon Giants or check the new GovCon Edu where you learn everything about government contracting!

ALERT: State and Local Contracts might be worth the risk Part 1

https://www.youtube.com/watch?v=B-o04pXqCGE&t=313s

State and local contracts might be worth the RISK – Part 2 of 2

https://www.youtube.com/watch?v=TpjGtrrOwUs&t=617s

16 Reasons to Hate County and State Contracts

Posted on by Linette Genao

County and state contracts are not the best way to go. Plain and simple. They may be the “safe route” and hate may be a strong word, but by the end of this you’ll understand why this route is not the most beneficial.

But can’t you make money working these contracts? Yes, you absolutely can make money working county and state contracts. However, there will be a lot more effort and time spent, with a result that is nowhere near the federal level.

County and state contract results are incomparable to the results federal contracts give you. It might be easier or quicker to bid county and state contracts, but after all of the unsuccessful proposals you will need to design, you’re going to burn out. Once you are burned out bidding jobs unsuccessfully, then you’ll start to understand why we don’t suggest going this route.

 

16 REASONS TO HATE COUNTY AND STATE CONTRACTS

 

  1. Rare to Begin And Make Millions Of Dollars

Working on smaller projects allows you to become comfortable and stay stagnant for years to come. There will be little progress as the years pass and once you get comfortable, the millions and larger projects will probably never be touched.

  1. No Ability To Scale

You can’t hire an outside man and they can’t hire an outside man. If you go this route, you better be ready to do all of the work. With federal contracts, you can bring in whoever you need to as long as the job gets done and the people you hire can also bring in whoever they need to.

  1. Requires That You Have All The Tools

You won’t be able to leverage other people and other team member’s resources. If you don’t have the money or the tools to do it yourself, you are out of luck. It’s a big never-ending cycle. In the federal arena, you can work as a subcontractor on a half or million-dollar project and the prime will cover the bonding. Meanwhile, you get the experience to increase your bonding level.

  1. Pay Is Slow More Often Times Than Pay Is Fast

The number one complaint from small-business owners? The local and state governments pay is slow. Being paid slow versus being paid fast is the norm. If you are a subcontractor, you are waiting double the time. Whereas, the federal government pays on time.

  1. Allows For Underbidding

Bidding and winning a job that the county and state know you will not be able to afford, is a risk you shouldn’t want to take. Starting out, you don’t have any money to lose, so why would you put yourself at a disadvantage right out the gate? It’s a waste of time for everyone.

  1. They Award Projects Without Securing Funding

This is scary. If you are doing a project, don’t you want to assure you will get paid and that money has been allocated to receive payment? The federal government allocates money so when the job is done, you get paid. State and local governments? They need something done but have no idea how they will pay for it. After you do all of the work, all of a sudden, “they are sorry and trying to get the funding.” I don’t know about you, but we much rather be assured that after all of the work that goes into completing these projects, there is money for everyone to get paid.

  1. No Blackball List; Not Widely Used

Ethics is what is comes down to. You don’t want to work with someone who is unethical. However, the local governments do not blackball contractors who take advantage of disabled and elderly people, walk out on jobs, fail to complete jobs or pay their sub-contractors. This also means that the prime contact can abuse you and never be removed from an approved vendor’s list. Sounds comforting? Didn’t think so.

  1. Designed For Handymen

These contracts are made for people who are going to self-perform the work or bid so cheap as though they are going to self-perform the work. There are also no opportunities for you to scale or grow a team this way. They want you to do all of the work but pay you as if you’re doing them a favor or are hiring and paying others under the table. Not based on your expertise, experience and what it actually requires to complete the job and pay an experienced team.

  1. Do Not Offer Maximum Leverage

Local levels do not support joint ventures. This is such a shame. Because they do not support joint ventures, there is no way or opportunity to actually leverage your abilities and talents to grow a business out.

  1. There Are Prejudices Based On Race, Location and Relationships

Don’t get upset over what you just read. Take a second to understand. There are still minority, section 3, public housing and similar type of programs out there. However, these contracts won’t actually scale your business and lead you to success. On the other hand, they can actually get you in trouble. You cannot get success by demand. Find the best company to work with and for you. You want to be the best company and work with the best companies regardless of what they look like, who they are and where they’re at.

  1. No Training Contract Officers

With the lack of stability in maintaining positions and the constant revolving of moving people to different positions, people who lack the experience are the ones judging the contracts. Whereas in the federal arena, a contracting officer is a contracting officer no matter where they go.

  1. Funding Is Tied To Federal Or State Grants And Subsidy Programs Like CDBG

Did you ever stop to think where the county gets their money from? Yes, some of it comes from tax payers. But the rest of the money comes from the state, which comes from the federal government. If their dollars are coming from the federal agency, why don’t you just work for the federal agency? If it’s good enough for the state and the municipal government to rely upon, don’t you think it’s good enough for you to rely upon?

  1. Constantly Changing People

Relationships are key to maximizing opportunities. If the people in the positions are constantly being changed, how can you have or build these relationships? You should be looking to maximize opportunities and leverage skillsets to grow your business. ­­

  1. Inconsistent Bid Process

With so many different departments within the counties, the bid process is inconsistent. This means you are creating new proposals for each bid. However, with the federal government, you follow one rule book—the FAR or Federal Acquisitions Regulations. They use the Standard Form 1449. Therefore, one bid process is almost identical to the other. Meaning, the first proposal you invested time into, you now only have to change names, prices and details.

  1. Can Cancel A Contract With No Apparent Reason

If you want to be spending time going after opportunities for someone that turns you away and doesn’t give you a chance over something like a protest, then the county is the way to go. But who wants to waste all of that time for nothing? No one.

  1. Big Enough To Screw You, Small Enough To Overextend And Not Pay You

There was a man who had a contract to build the Pinecrest Library. Once built, the real estate market crashed and he was told he would never get paid. Not because they didn’t owe him the money, but because there was no money to pay him. End note, they are big enough to screw you, small enough to overextend and not pay you. Don’t be that guy.

 

As a beginner, federal contracts might be intimidating but being new and ignorant is your blessing here. It’s actually a strength that you are at a disadvantage, because you don’t know any better.

When you don’t know any better, if you pursue a multi-million-dollar federal contract with limited experience and limited knowledge and you land that job, then everything works out. Whereas, if you start small, these numbers will seem unattainable and you’ll never give yourself the opportunity to reach these limits.

At this point, you probably changed your mind and despise county and state contracts too. We say, go for it. Start with the “scary.” Go for the federal contracts. You’ll be happy you did in the long run.

 

Check out our video below for more information on this topic. To learn more, visit our YouTube Channel.