Webinar: New Strategies for Winning More Bids in 2012 · 2019-12-17 · Webinar: New Strategies for...

Mike Purdy

Michael E. Purdy

Associates, LLC

Webinar: New Strategies for Winning More Bids in 2012

Look for Public-Private Opportunities

Identify Emerging Trends

Find Hidden Government Markets

Hosted by Our featured expert:

Find Hidden Government Markets

FIND HIDDEN GOVERNMENT MARKETS

Consolidation of procurements

Agencies seeking efficiencies in procurement

Not all opportunities are advertised

Post low-bid environment

What we’ll cover

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1. Piggybacking

2. Cooperative Purchasing

3. Selection and Bidding Thresholds

4. Rosters

5. On-Call or Blanket Contracts

6. Decentralization of the Procurement Function

Six key trends

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FIND HIDDEN GOVERNMENT MARKETS Piggybacking

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Definition: An agency uses the solicitation and

competitive prices obtained by another agency

Reduces agencies’ workload

Other agencies don’t conduct their own advertisement

Most common with products (goods/supplies/equipment/materials)

Reliance on the solicitations

of different agencies

Perform the solicitation and

award themselves

FIND HIDDEN GOVERNMENT MARKETS Cooperative purchasing

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Definition: Large-scale piggybacking through a

purchasing cooperative

FIND HIDDEN GOVERNMENT MARKETS Selection and bidding thresholds

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No competitive bidding under certain thresholds

Thresholds vary by agency

Reduces process and costs on smaller procurements

Some agencies are increasing thresholds to reduce workload

UNDER THE THRESHOLD: UNPUBLISHED PROJECTS AND

UNTAPPED OPPORTUNITIES

FIND HIDDEN GOVERNMENT MARKETS Rosters

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Streamlined selection process

Prequalified vs. open rosters

Limits competition to those on roster

More use of cooperative rosters

Rosters are established by:

─ Agencies

─ Groups of agencies

─ Organizations

ALTERNATIVE NOTIFICATION PROCESS FOR

CONTRACTING OPPORTUNITIES

FIND HIDDEN GOVERNMENT MARKETS Benefits of rosters

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Reduced costs for agencies

─ Less administration; no advertising for each project

Reduced costs for vendors

─ Saves money on applications; limited competition

Broader market exposure

─ Easier for vendors to apply for rosters for multiple agencies

FIND HIDDEN GOVERNMENT MARKETS On-call or blanket contracts

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Indefinite Delivery/Indefinite Quantity (IDIQ)

Reduces number of individual procurements

Consolidation of purchasing with fewer firms

More efficient as firm is already under contract

No guarantees of usage

FIND HIDDEN GOVERNMENT MARKETS Decentralization of procurement function

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Budget reductions of procurement staff

Fewer requirements and less process

─ Informal selection process

Procurement function and decisions pushed to operational staff


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Suggest that agencies piggyback off contracts you’ve been awarded

Compete for work through purchasing cooperatives

Apply for placement on rosters

Submit bids and proposals for on-call contracts

Cultivate relationships with agency decision makers

Identify Emerging Trends

IDENTIFY EMERGING TRENDS Four key trends

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Best-value selection

─ Price and qualifications

Selection preferences

─ Local bid, worker, social equity, hidden

Sustainability

Technology

IDENTIFY EMERGING TRENDS Best-value selection

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Then

Historical focus on cost

─ Award to “low bid”; status of firms and contractors not important

Now

Current focus on non-cost elements

─ Award based on local preferences and qualifications

─ Status of firms and subcontractors more important

─ Post low-bid environment

─ Balancing cost with public and social objectives

SHIFTING AGENCY PRIORITIES:


16

One firm to design and build project

Selection based on qualifications and price

Reduces blame and claims

Cooperative team environment established


17 Source: Design-Build Institute of America


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CONSTRUCTION MANAGER AT RISK

Early selection of contractor based on qualifications and prices

Construction cost negotiated

Partnership between agency and contractor

Source: Onvia


19 Source: Associated General Contractors of America

IDENTIFY EMERGING TRENDS Selection preferences

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DAVIS-BACON ACT OF 1931

Current federal prevailing wage law

Originally championed as local preference law

Intended to make sure local contractors are

paid local prevailing wages


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TYPES OF LOCAL BID PREFERENCES

Percentage preference

Match-low-bid preference

Tie-bid preference

Tax revenue preference

Reciprocal preference


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If “a bid is received from a nonresident contractor from a state that provides a percentage bidding preference, a comparable percentage disadvantage

must be applied to the bid of that nonresident contractor.” RCW 39.04.380


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DEFINING ‘LOCAL’ BUSINESSES


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WORKER PREFERENCES

Employment of local workers

─ Hire San Francisco residents

─ 20% of workers on $400,000 projects

E-Verify

─ Hire U.S. citizens only

─ North Carolina and others require

Project Labor Agreements (PLA)

─ Hire union workers


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SOCIAL EQUITY PREFERENCES

Small businesses

─ Limiting competition to small business only (example: Small Business

Accelerator Program in King County, Wash.)

Minority- and women-owned businesses

─ Set-aside programs

─ As a condition of responsiveness (example: Seattle’s WMBE program)

Disadvantaged businesses

─ Prompt payment required by U.S. DOT regulations


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HIDDEN PREFERENCES

Despite evaluation criteria, where subjectivity of evaluation exists,

public agencies often favor:

─ Local firms

─ Firms they know

─ Firms they’ve done business with in the past

IDENTIFY EMERGING TRENDS Sustainability

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LEED: LEADERSHIP IN ENERGY AND

ENVIRONMENTAL DESIGN

Certification program for sustainable

buildings

Certified by Green Building Certification

Institute

More than 14,000 LEED projects in

40 countries

More than 22 states and many agencies

require LEED

In a depressed construction environment, LEED for Existing Buildings: Operations & Maintenance (LEED-EBOM) has been one of the fastest-growing LEED rating systems, with cumulative floor area in certified projects now greater than in new construction. According to the Onvia database, from 2009 to 2010, there was a 1,566% increase in LEED-EBOM projects, and from 2010 to 2011, there was a 12% increase.

About LEED-EBOM

Source: Onvia


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ESCO (ENERGY SERVICES CONTRACTING)

Selected contractor performs analysis of facilities

Agency reviews and accepts proposal

Contractor performs work and guarantees energy savings

Structuring the finances, risks and guarantees


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DECONSTRUCTION

Careful dismantling of buildings and structures

Reusable materials are recycled

Preserves resources and reduces waste

Creates jobs

Takes longer than demolition, but often cheaper

Reclaimed material is either sold or used in projects


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DECONSTRUCTION: ALASKA WAY VIADUCT,

SEATTLE, WA

45,000 tons of concrete from demolition

Most will be ground into aggregate and

incorporated into new concrete for the tunnel

Thousands of tons of rebar will be either

recycled or melted down into new rebar


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ALTERNATIVE ENERGY SOURCES

Solar Farms

─ 300-megawatt solar farm in Arizona on

federal lands (enough to power 90,000

homes)

─ Google investing $94 million to buy four

solar farms in Sacramento (enough to

power13,000 homes)

Solar Panels

─ Used on commercial and residential

buildings

─ Net-zero energy buildings

IDENTIFY EMERGING TRENDS Technology

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ELECTRONIC PROCUREMENT

Notification of business opportunities

─ Shorter newspaper advertisements pointing to

agency website

Availability of bidding documents

─ Transferring printing costs to private sector

(agency websites, Builders Exchange, eBid

systems)

Electronic bidding

─ Eventually, all bidding, except by the smallest

agencies, will be conducted electronically

IDENTIFY EMERGING TRENDS Technology

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BUILDING INFORMATION MODELING (BIM)

3-D modeling

Uses

─ Clash detection in designs

─ Build the facility in 3-D before actually building it

─ Will be used more for monitoring maintenance on systems

Saves money

Larger architectural, engineering and construction firms

increasingly beginning to use it

IDENTIFY EMERGING TRENDS

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Develop capabilities for competing for Design-Build and Construction

Manager at Risk projects

Assign staff to address compliance with local bid and social equity

preferences in key markets

Build agency relationships and make hidden preferences work for you

Evaluate sustainability trends and opportunities in your industry

Look for Public-Private Opportunities

LOOK FOR PUBLIC-PRIVATE OPPORTUNITIES Privatization

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Role of government

─ Budget crunch intensifies debate

Privatization

─ Transfers traditional government functions to the private sector

Debate

─ Lower costs vs. quality and control of services provided


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EXAMPLES


38

VS

PUBLIC-PRIVATE PARTNERSHIPS PRIVATIZATION

Privatization more likely with services Public-Private Partnerships more

likely with capital facilities Example: maintenance of public agency

road infrastructure Example: private toll road

LOOK FOR PUBLIC-PRIVATE OPPORTUNITIES Public-Private Partnerships (P3s)

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Public and private sector equitably

sharing risk and rewards to stretch

public resources

Balance strengths and needs of

both sectors

Takes many different forms with

each one a separate deal

Not always low price: best value

vs. low bid

Overwhelming majority of

opportunities are at the local level

References to P3s in 2011 budgets

and CIPs by government sector

Source: Onvia

LOOK FOR PUBLIC-PRIVATE OPPORTUNITIES Public-Private Partnerships (P3s)

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Examples

─ Turnkey building

─ Federal tax credits for low-income housing

─ Design-Build-Operate-Maintain

─ Operations-Maintenance-Management

Prevailing wages as threat to P3s

─ California: Developer required to pay prevailing wages because the

project contained some public funds

─ Washington: Legislation defeated in 2010 that would have required

prevailing wages in Public-Private Partnerships

LOOK FOR PUBLIC-PRIVATE OPPORTUNITIES Action items

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Propose or respond to cost-saving privatization opportunities

Meet with agency staff to assess possibilities for P3s

SUMMARY

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Fewer opportunities advertised

─ Government and agencies shifting to more efficient procurement and

contracting models

Post low-bid environment

─ Non-cost factors more important (qualifications, social objectives, etc.);

requires skills to develop proposals

Technology

─ Impacts how government agencies obtain goods and services

More opportunities with privatization

─ Traditional government services are being bid to the private sector

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Copyright: This document is copyrighted by Michael E. Purdy Associates, LLC. All rights reserved. No

part of this document may be reproduced, modified, or transmitted in any form or by any means,

electronic, mechanical or otherwise without prior written permission.

Not Legal Advice: The opinions, information, and interpretations provided in this document are the

personal opinions of Mike Purdy, are for educational and informational purposes only, and do not

represent legal advice. When appropriate, readers of this document are encouraged to consult with an

attorney to obtain legal advice.

THANK YOU!

Email: [email protected]

Web: www.mpurdy.com

Blog: PublicContracting.blogspot.com

Office: (206) 762-2699

ABOUT ONVIA

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For more than a decade, Onvia has provided companies with the data

and business intelligence they need to succeed in the government

marketplace

Onvia’s Online Database is the leading source for state and local

contracting opportunities (60% more than the competition)

The Onvia Guide provides clients with a daily email summary of the

most relevant and actionable bid and RFP opportunities

Onvia’s Custom Services, including Term Contract Reports and

Decision Maker Lists, help clients identify future opportunities and

connect with the agency officials who can send business their way

ABOUT ONVIA

45

Contact us:

[email protected] | 800-331-2320

mailto:[email protected]

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