If you are a new vendor who is interested in selling to the government, it can be a bit confusing with all of the acronyms and we have created a list of commonly used terms to help guide you through the process.
Piggybacking or Piggyback - This does not mean you have to physically carry someone on your back! :) The term piggyback is used when an existing contract can be utilized for purchasing by another agency in addition to the one you are working with. Let’s say you have won a bid/RFP from the City of ABC and have included verbiage in the agreement that allows other agencies to purchase your products/services. If the City of XYZ follows the same procurement process as the City of ABC, the City of XYZ can avoid going through the bid/RFP process and purchase your products/services by piggybacking on the deal you won with the City of ABC. This helps save the agencies time and resources, making it easier for them to purchase from you by shortening the evaluation process.
PTAC - This term stands for Procurement Technical Assistance Center, also known as APTAC (Association of Procurement Technical Center). There are roughly 100 PTACs that are available across the Unites States that offer free guidance for anyone looking to do business with the government. PTACs are funded by the DLA(Department of Logistics Agency) and hosted by a state agency to provide a physical location for meetings. This organization is a great place to start for anyone looking to sell to the government, especially in the Federal market.
RFP - Request for Proposal. Government agencies can purchase a variety of ways, and depending on the dollar amount, the agency will have to issue a RFP for fair and open competition. In prior years, the agency would post a notification in the newspaper for what they needed, but now the internet has made it easy to find agencies looking to purchase what you sell. An RFP is typically issued when the amount being spent exceeds the agency's discretionary threshold and will include a written summary of the products/services needed, referred to as “Scope of Work”. Any vendor can respond to the RFP by completing the document BUT only the vendors who can meet all of the criteria listed will be considered. It is important to follow all of the instructions on the RFP. If you miss any of the sections, do not include requested documents, or send your proposal a minute late(yes, just one minute), the agency will not consider your proposal for review. This may sound harsh, but this is the only way to keep the process fair amongst competition. Sometimes a government agency will have a window (3-7 days) in the beginning for questions, allowing vendors to clarify any requests in the documentation. No one is perfect and agencies can issue an addendum to the RFP if changes to the requirements are discovered during the Q & A period. After the question period is over, the agency will cease communication with vendors until the due date of RFP. The evaluation process will begin and there can be a second round of evaluation for a “short list” of vendors to present before making the final decision. Depending on the requirements, this process may take anywhere from 3-12 months.
Bid - This term is similar to an RFP, meaning that it is a formal process for purchasing that requires a vendor to complete documentation to be considered for the opportunity. There are purchasing agents across the country that will dispute the true definition of bid vs RFP but to keep it simple, this is a request for work needed to be done by an agency . Bid has been used for construction projects, when the path to completion is defined (ex... building a 40 ft wood walkway over a sand dune for beach access) compared to the purchase of a technology solution(ex...help with citizen engagement) that could have different methods to obtain the same result, which agents might call an RFP. Don’t get stressed if it is a bid or RFP, just follow the requirements for the submission and make sure to submit on time!
RFQ - Request for Quote. This is a more informal process than the RFP, used when an agency needs something that falls into a lower spending threshold. This allows them to contact a few vendors through email or phone, asking for a price of the products/services needed, and then choosing a company to work with for the project. To be in compliance with procurement procedures, the agency might need a minimum of 3 quotes before selecting the vendor of their choice. Something important to note, the cheapest price does not always win. That’s right, the government procurement office wants the best VALUE. Some other factors that are considered are: previous experience, support offered, and warranties could be the deciding factor on best value. The pros to this method is that less paperwork is required compared to the RFP process and purchases can be executed in days to weeks, instead of months.
Sole Source - The simplest way to understand sole source is that your company is the ONLY place to by the product or service. Sole source is a method of procurement that allows an agency to buy directly from the vendor without the hassle of competition. Some agencies will issue an RFP or bid as a way to validate the company is truly the sole source when no other responses are received. If you have a product or service that is unique, do your research and make sure that you are the only company that exists with this solution. Once you are sure, draft up a document called a “Sole Source Verification Letter” to share with agencies to let them know you are the only one available. This is a gray area when it comes to procurement because it can be difficult to validate, but if the agency is open to this buying process, it can save you a great deal of time and paperwork.
Discretionary Funds - This is a spending limit that allows government agencies to have more control over who they want to work with for purchases under the bid limit. Example...City ABC has discretionary funds of anything below $5K where they can contact vendors for pricing without going through a formal solicitation process.
Agency - This is a broad term that can be used across multiple government types. A city is an agency, a school is an agency, a county is an agency, the Department of Transportation in an agency, and the Army is an agency . The most common agency types are broken into two categories. SLED (State, Local, and Education) and Fed (Federal).
Validation Marketing - The process of establishing social awareness to promote your business as a trustworthy company through multiple channels. This includes having an updated presence on social media, news outlets, customer reviews, BBB reviews, websites and search engine results. Here are some examples: 7 Marketing Tips for Selling to Government Agencies
Contacts - These are the people you should be speaking with at the government agencies. Contacts can be the end user who will use your product/service, the purchasers who are responsible for buying, and/or the decision maker who will approve of the purchase. GovSpend and PowerAlmanac are two resources to find this information.
Co-ops - This is an abbreviation for an established cooperative agreement. Local government agencies are advocates for using these agreements in lieu of the bidding process. A co-op can be a private organization, or public lead organization, that has properly vetted companies for various products and services with established discounted rates.They do this to make buying and selling a breeze. To get on a co-op, you will go through an evaluation process just as you would for a bid to stay in compliance with agencies purchasing procedures. Once you are selected as a primary vendor, you can market to agencies, letting them know they can buy your products/services from the cooperative agreement, shortening the buying process and delivering what they need at a good price!
FOIA - Freedom of Information Act. Published in 1967, FOIA is a federal freedom of information law that requires the full or partial disclosure of previously unreleased information and documents controlled by the United States government upon request. This means that any tax paying citizen can contact a government agency and know where the money is being spent to help you understand what price the agency has paid in the past for products and services, also knowing who they worked with for a specific project.
There are hundreds of terms you might come across during your process of selling to the government. What terms are we missing here? Email email@example.com and we can help!