To Boost Bid Response Rates, Purchasing Pros Get the Word Out
When announcing bids and issuing Requests for Proposals (RFPs), government purchasers generally strive to attract a large pool of vendors, which compete to win the agency’s business. By encouraging competition among vendors, purchasers can compare prices and select the best buy for goods or services.
“You can never get too many bid responses,” believes Jack Beacham, C.P.M., A.P.P., Purchasing Agent for Tarrant County (Fort Worth), TX.
“Having a wealth of prospective bidders leads to more competition and lower prices,” adds Brett Wood, CPPB, Purchasing Administrator for Johnson County, KS. He notes that attracting a sizable number of bidders from all corners of the globe “keeps our local vendors on their toes. They make sure that they provide more services. Since they want to keep the business here locally, our local vendors have had to really stretch to make sure that they are competing and that they are providing value when they get work.”
In an informal reader survey conducted by Government PROcurement Journal, results show that some
jurisdictions are meeting their targets for bid participation:
- “We believe we get an adequate number of responses,” says Kirk W. Buffington, C.P.M., MBA, Director of Procurement Services for the City of Fort Lauderdale, FL. “We distribute all of our RFPs and bid announcements electronically, using RFP Depot, a third-party application service provider. We receive our bids and responses electronically through an electronic lockbox.” RFP Depot provides the City with a Web-based bid and RFP distribution portal that includes electronic receipts.
For more information about RFP Depot, visit www.govinfo.bz/5966-101.
- “Normally, we get plenty of bidders. However, there are times when either the market or the season reduces the number of responses
received,” states Brenda Mayer, CPPO, Purchasing Manager for the City of Edmond, OK. The city’s population was 73,080 in 2004.
- “We get a fair number of bid responses by using the Onvia DemandStar network,” notes Brett Wood, Purchasing Administrator for Johnson County, KS. “We’ve been very happy with it. Bid announcements are posted internally on our Web site, and we advertise in the local paper and post them on Onvia DemandStar.” Johnson County, which had a 2005 population of 506,562, has used the Onvia DemandStar network since 2001.
For more information about Onvia DemandStar, visit: www.govinfo.bz/5966-102.
- “We have more than adequate responses to our bid announcements,” says Tarrant County’s Jack Beacham. “Very seldom do we get in a situation where we don’t have enough.” Tarrant County, TX, had
a population of 1,620,479 in 2005.
Meanwhile, within the Baltimore County (MD) Public School System, Purchasing Manager Rick Gay, RSBO, is working to increase bid responses for construction projects.
When asked whether his agency receives enough responses to bid announcements, Gay replies: “Well, it depends on the bid. Over the last year and a half, we have had some shortfalls in our bidding for construction and renovation projects. We attribute that [decline] to the fact that our market right now is saturated with projects, and there are only six or seven vendors that are capable of doing that kind of work, or that want to do that kind of work. [Thus], we’ve only been getting one or two bidders on a lot of those projects, so that does cut down into the competition factor.”
Gay adds: “Normally, we get anywhere from four to eight bidders on a project or on a commodity. Depending on what the commodity is, we may pick up more [bidders].”
Baltimore County’s school system is the third largest school district in Maryland, the 25th largest
in the United States, and includes a total of 163 schools.
Governments Expand Reach to Vendors
What can public purchasers do to increase bid response rates? “My personal opinion is that the use of a nationally based system, like Onvia DemandStar or RFP Depot, is the best way to get better competition,” says Fort Lauderdale’s Buffington.
“Most agencies are still relying on some type of home-grown database, where bid announcements are re-
ally only being sent to bidders who are registered with that agency,” Buffington adds. “By using a national database such as RFP Depot, I’m distributing my bid announcements to a database that is more than 50,000 vendors strong. [As a result], I’m getting adequate numbers of responses, and I’m getting them from new vendors that we’ve never done business with before. We are getting better pricing without getting inundated with responses that aren’t really applicable.”
In addition, Buffington’s agency uses Web sites to inform vendors about bids: “There’s a link between RFP Depot and our department’s Web site, so as soon as we release a bid on RFP Depot, it is automatically posted to our entity’s Web site,” Buffington says. He adds that bids are also posted on a bulletin board outside the purchasing office.
What about announcing bid opportunities in local newspapers? “We don’t advertise in the paper any longer,” Buffington states. “I feel that legal-notice advertising for the most part, in my opinion, is a waste of money.”
“We don’t advertise our bids in local newspapers,” adds Baltimore County Schools’ Rick Gay. “About four and a half years ago, we made a business decision to advertise solely on our Web page.”
Gay continues: “We were spending about $1,000 a pop to advertise in the Baltimore Sun, or the Jeffersonian, or some of the other local papers. Their pricing really began to get pretty exorbitant, because they realized that they are the only game in town. We figured it was a lot cheaper for us to do a Web page, so as soon as we got permission under our enabling legislation to do that, we moved in that direction.”
“Just put the word out,” says Tarrant County’s Beacham. “I don’t think that you can ever do enough
to advertise bid opportunities.” Besides posting bids and bid results on the county’s Web site, Beacham’s department advertises in the local newspaper and in Dodge construction reports. For more information about Dodge reports, visit: www.govinfo.bz/5966-103.
In Tarrant County, bid announcements are also sent to vendors via fax. In addition, Beacham’s office alerts chambers of commerce in the Latino and African-American communities. A new, online vendor registration process should likewise boost vendor participation, according to Beacham.
Other government entities are also using various media to spread the word about bidding opportunities. For instance, a recent National Association of State Procurement Officials (NASPO) survey covering 17 state
purchasing departments shows that 13 of the 17 respondents use their own department Web site for presenting bid announcements to vendors. However, many of the responding departments also rely on local newspapers, e-mail notifications to registered vendors, and other tools to announce bids.
Likewise, the Department of Administration in Arizona’s state government announces bid opportunities through various methods. “The State of Arizona uses multiple approaches, based upon the procurement,” says Jean A. Clark, CPPO, C.P.M, CPPB, CPM, who serves as Enterprise Procurement Administrator in the state’s Enterprise Procurement Services Division.
“We are required by statute to notify all of our registered suppliers for the particular commodity code being solicited for formal solicitations,” Clark explains. “This is conducted via e-mail from our e-procurement system, SPIRIT. We also, by statute, must announce in a newspaper for services being procured under a formal solicitation. It is the discretion of the Procurement Officer as to which newspaper. At times, we have also notified the local chambers of commerce, and small, minority, and woman-owned business organizations.”
In Florida, state agencies advertise non-construction-related procurements in a Vendor Bid System (VBS), says Fred Springer, Interim Deputy Secretary of Operations Support in the Florida Department of Management Services. For additional information about the VBS, visit: www.govinfo.bz/5966-104.
Springer adds that Florida’s Department of Transportation (DOT), which accounts for about half of the state’s procurements, advertises separately at two Web sites: a DOT Contracts Administration Site (visit: www.govinfo.bz/5966-105), as well as on a bidding exchange operated by BidX.com (visit: www.govinfo.
In New Jersey, the Purchase Bureau in the Division of Purchase and Property, within the state’s Department of the Treasury, uses various means to notify vendors about upcoming bids. The Purchase Bureau advertises bidding opportunities in the Newark Star Ledger (visit: www.govinfo.bz/5966-107) and also on the Bureau’s home page (visit: www.govinfo.bz/5966-108).
In addition, the New Jersey Bureau offers e-mail delivery of RFPs for vendors who wish to be notified of solicitations that may be of interest to them. Vendors can enroll to receive e-mail notification of bids (e-Bid) via the Internet. The Purchase Bureau serves as New Jersey’s primary agency in the procurement of general goods and services (non-construction) for the state government.
Even smaller government agencies are using multiple media sources to inform vendors about bid opportunities. For instance, Nevada’s Las Vegas Convention and Visitors Authority (LVCVA) advertises bids on its Web site (visit: www.govinfo.bz/5966-109), as well as in local newspapers.
“Our bids are very small compared to most governmental agencies,” says Penny Marchell, Director of Materials Management at the LVCVA. “We do about 50 bids a year, and they average about $200,000 each. The Authority posts bids for services, supplies, and small construction—the kinds of products and services needed to maintain and promote the Las Vegas con-vention facility.”
Online Sites Trumpet Bid Opportunities
GovernmentBids.com. This Web site, in operation since 1998, accepts bid announcements and RFPs from governments for posting. “We would be happy for agencies to supply us with a current link to their agency Web sites that contain bid listings, by e-mailing us at: email@example.com. This will allow us to meet their needs,” says Tim Riley, Marketing Director at GovernmentBids.com.
What advice does Riley have for purchasers who want to increase vendor responses to their bid announcements and RFPs?
“The first step is for government entities to share their Web site listings with us,” Riley recommends. “Frankly, we already scan thousands of government sites at the state, local, and federal levels, but we always welcome more. We want to ensure that agency bids get the visibility that government administrators are seeking, while helping our client vendors to find appropriate opportunities.
“Second, make sure that all the information available is included,” Riley notes. “This not only helps the vendors in bid preparation, but also will limit time-consuming phone calls to get details that they need.”
Riley continues: “Lastly, consider establishing an E-procurement network or joining an existing one, to maximize your effectiveness and access a larger vendor pool.”
BidClerk. This Web site bills itself as “the construction industry’s search engine.” Governments can submit information about projects going out for bid. For more information about BidClerk, visit: www.govinfo.bz/5966-110.
Bidders’ Resource. To find out how to get your entity’s bids posted on this Web site, send an e-mail to firstname.lastname@example.org.
Bid Source. This Web site accepts bid announcements and RFPs from governments. “When we receive such bids, we enter them into our system, and if the bid matches a client’s search terms, we notify the government agency,” says Suzanne Ross, Vice President of Marketing at Bid Source. The Web site tracks state and local government bids on the East Coast, from the state of Maine to Virginia.
Bid Source is affiliated with BurrellesLuce, a renowned, worldwide press-clipping service. To access information about Bid Source, visit: www.govinfo.bz/5966-111.
On the other side of the bidding process, businesses also have a keen interest in bidding on government contracts. According to a recent survey of BidNet.com’s business clients, the largest group of respondents said that they spend from $2,500 to $10,000 annually in researching opportunities for government bids. What’s more, three-fourths of survey respondents said that they plan to increase the pro-portion of their revenue that results from government business.
Overall, public purchasers can expect businesses to continue filling their mailboxes with bids and price quotes for all types of government solicitations.
Services Streamline Procurement Processes
BidNet’s E-procurement system electronically stores an agency’s entire vendor database for ready access by purchasers. The system also enables tracking and controlling of bid documents and amendments continuously.
For more information about the BidNet system, visit: www.govinfo.bz/5966-112.
Ion Wave Technology offers several electronic purchasing solutions. Based in Springfield, MO, the company offers enterprise-wide software that enables government purchasing departments to reach a large supplier base by e-mail and the Internet. The software also offers complete back-end functionality to help purchasing agents manage all types of data in the bidding process.
Public purchasers can develop a list of qualified vendors, using Ion Wave’s software. “There are about nine different ways [the software] can help buyers do that—by commodity, by risk and performance analysis, by qualifications, by proximity or geographic region, and other criteria,” explains Darren Henderson, Chief Executive Officer of Ion Wave Technology.
For more information about Ion Wave’s purchasing solutions, visit: www.govinfo.bz/5966-113.
Onvia DemandStar. “In terms of making a match, our procurement tool is a cost-effective, efficient
way for buyer and seller to come together,” says Irv Alpert, Execu-tive Vice President of Onvia DemandStar. Purchasing administrators can research Onvia’s bid library of 60,000 specifications to develop their own bid notices and RFPs, as well as glean a wealth of information about prospective vendors.
For more information about Onvia’s procurement tools, visit: www.govinfo.bz/5966-114.
Oracle Sourcing. This procurement system provides a set of external-facing Web pages on which bid opportunities are posted. On those Web pages, suppliers can view and download bid materials that the buying organization posts.
As part of the registration process on Oracle Sourcing, suppliers can self-categorize the commodities and services they provide, and they will then be notified about pertinent bid announcements.
With Oracle Sourcing, if the buying agency wishes to use a third-party bid-advertising service, the agency can use that service and just direct prospective bidders to the Oracle Sourcing application.
For more information about Oracle Sourcing, visit: www.govinfo.bz/5966-115.
By using online tools and other media sources to announce bidding opportunities, public purchasers can expand their reach to vendors, encourage competition, and find the best value for taxpayer dollars.
About the Author
Michael Keating is Research Manager for Government Product News and Govern-ment PROcurement magazines, as well as Senior Research Editor for Expansion Management magazine, all of which are published by Penton Media, Inc. He has written articles on the government market for about 100 publications, including USA Today, Sanitary Maintenance, Industry Week, and the Costco Connection. Keating can be reached via
e-mail: email@example.com, or visit his Web site: www.mikekeat.net.