Selling to the government: Tips for distributors

By Jim Dankowski, manager, marketing and business development, government sales and solutions, Eaton Corporation

Procuring government contracts can be a challenge for even the most well established companies. Contract vehicles are everything in the government market, but the requirements set forth can be extensive and the bidding process very complex. Thus, bidders must have an adequate infrastructure and resources in place, or leverage industry relationships, to provide a comprehensive solution that offers value beyond initial specifications.  

Due to a breadth of available products and ability to streamline purchases, distributors tend to have an inherent advantage in the government market. Additionally, as energy efficiency and infrastructure enhancement project funding has increased steadily since 2005, it has become apparent that these projects will remain top of mind for government agencies. This funding is right in the “sweet spot” for electrical distributors, but in order to really hit a “home run” with a bid, it’s important to emphasize efficiency, bid comprehensively, streamline logistics and understand regulations.

1. Emphasize Efficiency – Based on the government focus on energy reduction, distributors should highlight the value of products and services that help meet mandate and budget requirements. Because government projects are publically funded, it is important that distributors offer the most cost effective solutions possible to maximize the value of tax expenditure. Any product or service that can reduce energy consumption, or even better, make an agency more independent from utility power, can provide strong backing for investment. A few examples of these solutions include lighting control systems, energy efficient transformers, control products and energy audits.
2. Bid Comprehensively – While the products and services required for the government market may not be all that different from the commercial market, the same cannot be said about the contract process. Requests for bids are public, which can make consideration extremely competitive. Proposals must be as descriptive as possible in regard to detail and projected value to increase the likelihood of procurement.

   This meticulous process may require more resources, but it also provides an enhanced opportunity to increase business beyond the initial requirements of the contract. The government is typically more concerned with total overall value than initial investment. By emphasizing the return on projects, distributors have a golden opportunity to provide additional solutions and services, and expand the value of contracts.

3. Streamline Logistics – Streamlined logistics are one of the most important aspects of the government proposal process. Distributors have a great advantage in being able to package multiple manufacturers’ solutions for customers, and government agencies prefer to minimize the amount of contracts necessary to support one project. Proven project management, relevant experience and the ability to perform safety and efficiency audits are critical skills that are rarely overlooked.

   Distributors lacking a service network can always leverage relationships with manufacturers to provide a total solution set to government customers. For example, with alternative energy initiatives, such as solar installations for government buildings, off-the-shelf equipment may not be optimized to work with systems of different sizes. This can make it more costly or difficult to install and maintain. Eaton solves this problem by having available satellites and service centers which can visit sites, and work with customers to customize equipment such as switchboards, breakers, enclosed breakers, safety switches and low to medium voltage switchgear to exact specifications and requirements. Similar one-source solutions can be bundled with distributor bids to save on installation costs and make power system installation, management and maintenance much easier for the customer.

4. Understand Regulations – Doing business with the government requires a good understanding of their policies, procedures, terms and conditions.  There are specific Federal Acquisition Regulations (FAR) and compliance standards that need to be understood and followed. A good example is providing documentation for ARRA product sales.

   Traversing successfully through the bureaucratic bidding process requires a high level of expertise from the distributor. If procuring government business is a new venture, distributors can often benefit greatly from outsourcing a procurement expert or by collaborating with an experienced manufacturer.

The government will always be an important market for the electrical industry. The business dynamics of government procurement are unique, but the market is a large and stable with a tremendous amount of opportunity and growth. If distributors can leverage available resources to provide a comprehensive solution, and clearly illustrate the value of that solution, there is great opportunity for success.