What’s in all this potential for residential remodelers? While traditionally leery of government work, due in part to perceptions of red tape and slow payment times, many remodelers are starting to government opportunities as potential means of diversifying and growing their businesses, as well as serving as a hedge against the economic downturn and reduced consumer spending.
Q: What are the opportunities for remodelers?
A: The opportunities presented by the stimulus bill are significant, especially for firms that specialize in green remodeling. However, this is not due to opportunities solely related to doing business with any level of government. Instead, this is due to homeowners taking advantage of the Energy Efficient Home Tax Credits offered by the economic stimulus. The tax credits have been extended through 2010 and have been increased to 30% of the cost of investment. A good resource for remodelers to direct their customers is this part of the Energy Star Web site. With respect to the government, the bill commits approximately $16.5 billion to modernize or retrofit federal and other public infrastructure with the focus on investments that lead to energy cost savings. This is where much of the marketplace will be the next few years.
Q: How much business is contracted with the federal government?
A: The federal government is the world’s largest buyer of goods and services, with purchases totaling nearly $425 billion a year. An example is GSA’s Public Buildings Service, which contracts for a wide variety of services to provide superior workplaces for federal agencies. The largest contracting areas include repair, alteration, and construction of buildings. This accounted more than $1.8 billlion in FY07, with $692 million of that (nearly 38%) contracted with small businesses. With the passage of the economic stimulus bill, these amounts will skyrocket over the balance of FY09 and FY10 with the emphasis, again, on going “green.”
Q: Who do we contact/where do we go to identify opportunities?
A: There is no silver bullet. In the context of identifying stimulus funding opportunities, first look locally. Tap any existing relationships you have with local government officials, as stimulus funding will trickle down from the federal to state to local government, assuming your state has accepted stimulus funding. Be on the lookout for RFPs (“requests for proposal”) that are issued. Look for opportunities through municipalities, schools, and hospitals.
Also, schedule an appointment with a staff person from your U.S. representative’s district office. This person may be able to offer guidance about the economic stimulus package and how funds are being allocated statewide and locally.
If you already specialize in the green remodeling field, you may want to reach out to your state energy office (click here to find yours), as stimulus funding is geared toward energy efficiency. And some states, like Minnesota, even have federal stimulus coordinators.
Finally, in a broader context of identifying all contracting opportunities, the federal government has Web sites, such as www.fedbizopps.gov, where opportunities can be searched. GSA’s Forecast of Contracting Opportunities can be found here.
[Editor's update April 3: GSA's project list for spending $5.5 billion of stimulus money on remodeling and constructing high-performance buildings.]
Q: How do we approach the federal government for procurement opportunities?
A: If your firm has never done business with the federal government, you must demonstrate that it is a proven commodity. A good first step toward establishing credibility and a proven track record is by getting on GSA Schedule. There are professionals who can help your firm with this process (see next section), which can take four to six months to complete. However, getting on the GSA schedule does not guarantee a sale. It is essentially a “fishing license” – and the fish won’t jump into your boat on their own. Click here to learn more about GSA Schedules.
Q: Can we try to get government work on our own, or do we have to hire a consultant to walk us through the process?
A: Because the federal government is so massive, you may want to consider hiring a procurement or marketing firm/consultant to market your services to key government officials within federal agencies, or to at least help navigate through the federal agencies to get you talking to the right people. With the stimulus package, federal agency officials will be bombarded with companies looking to do business. You may need to utilize the services of a respected consultant who will get phone calls and emails returned.
Q: What are ways to market our remodeling company?
A: Present your firm’s capabilities directly to the federal agencies and to the large prime contractors that would utilize your firm’s services. Attend procurement conferences and business expos. Moreover, each federal agency has an Office of Small and Disadvantaged Business Utilization that advocates for small business owners.
Bear in mind that marketing to the federal government is a time-consuming process, and you’ll need dedicated staff to do it well. You must be proactive in your approach to be successful. Placement on the GSA Schedule alone will not suffice.
Q: How much red tape is involved? Is it worth the hassle?
A: It is a bureaucracy no matter how you cut it. A firm would have to decide its cost-benefit analysis, but even one contract or project could bring in significant revenues. Do be patient. Working with the government is a long-term campaign, especially for small businesses.
Q: Would remodelers strengthen their chances of getting government contracts if they partnered with like-minded companies in other parts of the country? Would that expand their reach and strengthen their case for bigger opportunities?
A: Yes. In fact, if a remodeling firm is a small business, it can be an asset to larger companies, known as “Primes,” in their efforts to go after competitive government contracts in partnership. More importantly, small businesses, including those owned by the disadvantaged, women, or service-disabled veterans, or located in HUBZones, may be able to perform as a prime contractor with the government, or through standard subcontracting opportunities.
Q: How so?
A: The federal government is mandated by law to establish contracting goals, with at least 23% of all government buying directed to small businesses. And each federal agency has additional goals to meet when awarding contracts to the small business classifications listed in the previous answer. For example, the goal of each agency is to award 3% of contract dollars to service disabled veteran-owned firms, 5% to women-owned firms, etc.
Q: What other resources would you recommend?
A. The U.S. Small Business Administration can be of help. Click here to see how it outlines in organized fashion what small businesses need to do to get started.
To track where tax dollars are going, visit www.recovery.gov. There is also a link available from recovery.gov to state web sites to see how states are spending stimulus funds.