How Do I Get A Contract?
Confessions of a diversity professional
It is by far the most popular question asked by minority businesses. The answer is simple enough, but unfortunately, it isn’t very reassuring. You get a contract by being good at your craft, running a tight ship, marketing your business and sharpening your pencils to ensure your numbers are fair and competitive.
As the current director of diversity services for Kaiser Permanente’s (Kaiser) National Facility Services, I am responsible for making sure minority businesses get contractual opportunities within our national facilities program. This means every day I am greeted with businesses of all sizes, disciplines and backgrounds looking for an “in” to some piece of our $2 billion in annual spend, and rightfully so.
I like to remind folks you should always know who your client is. This falls into the “running a tight ship” category. Kaiser, or any other large corporation, may not be a good fit for your business, even though you are capable. Take the time to find this out. The internet is a powerful tool, as are professional organizations. Ask around; get feedback; do some due diligence, and find out if you truly want a contract. Like many large entities, we have a tough process with some even tougher insurance requirements.
If you still want that contract, you must market yourself! One of the basic rules of business is people do business with people they like. Now, this fully reeks of the “good ol’ boys’ network,” but your due diligence will flush that out. The largest barrier to getting a contract is we have not worked with you before, and this makes you an unknown factor. More importantly, however, this also makes you a risk.
Enter prequalification. Indeed, procurement services, bidding processes and project management are all set up to mitigate risk. So to keep our insurers happy, and in turn, receive a low insurance rate, prequalification is required to help us verify who you are. Yes, we need to know your relevant experience, financial strength and overall company makeup. This is also where a lot of small businesses fall off because they have not kept good, auditable financials nor did they ask for references as they completed their projects.
If your business has been prequalified but still has not received a contract, then I usually ask, “Have you contacted any project manager, estimator or project team member to find out any upcoming projects or opportunities?” The answer to this is almost always “no,” and then usually countered with, “Weren’t you going to do that?”
A better question for a prequalified minority business to ask is, “I hear you are going to build your next project over here. Can you help me find an opportunity in there?” Please know that even though I am your champion and I truly want you to succeed, there is only so much I can do. There are also an exponential number of you asking the same thing, so the more you can help me help you, the further you will go.
Just to compare, most large corporations have a business development department that goes out to find work. They woo, call, email, send candy and flowers on birthdays and holidays, and even invite their clients to important industry dinners and receptions. Not all corporations indulge in this, but the point is they are always around to make sure potential clients not only remember them, but also like them.
On the flip side, the average small business usually depends on the owner to do this. Doing so becomes difficult between managing projects, running the office, finding more work and still having a life. But if you are running a business and want multi-million dollar contracts, some thought has to go into marketing, and some time needs to be set aside to foster your working relationships. That old adage of “out of sight out of mind” rings especially true and can leave your business on the sidelines very quickly. At minimum, ask to be debriefed if you do not win an opportunity and you will almost certainly be invited to bid again.
Even if you have all of this in place, there are still some harsh realities you have to face. Chief among them is capacity. We are currently living in the age of the mega project, meaning multi-billion dollar contracts are common, and as a small business, you have to recognize nobody is going to break down that contract package to the level where a lot small businesses can get an opportunity. Just do the math . If your sweet spot is $2 million, how many $2 millions are in a billion? To combat this, either look for work on the lower tiers or ensure your relationship is tight enough that both the owner and prime contractor make sure you get an opportunity.
Luck favors the prepared. There are success stories, and plenty of organizations and programs set up to help. Take advantage of them, if for no other reason than to get attention and exposure for your company. Many large corporations support these and are looking for you. Just remember nothing breeds success like success. Good luck.