First post of a two-part series based on a fireside chat with leaders from Orange County (CA), Safeware, and Pavilion
Faced with staffing constraints and increasing workloads, state, local, and education (SLED) agencies today are looking to purchase faster and more efficiently. Increasingly, they’re looking to buy through existing contracts instead of going to bid.
Pavilion’s founder and CEO Mariel Reed recently spoke with Maria Agrusa, County Procurement Officer of Orange County, CA and Rick Bond, Chief Revenue Officer of Safeware to discuss how suppliers can take advantage of trends to generate more revenue from their existing contracts. In this two-part blog series, we share the key takeaways.
Agencies are increasingly looking to purchase from an existing cooperative contract.
- Running a new RFP or bid is expensive. Maria says, “We quantified every step in the Request for Proposal and Invitation for Bid processes. We found that it cost $50k-$75 to run an RFP and $25k-$30k for an IFB.”
- Purchasing off an existing contract may provide agencies cost advantages, especially when purchasing multiple products or services. Rick says, “First, agencies will get the best pricing right from the beginning instead of looking on the internet. Second, a lot of times, people are buying a bundle of products. There may be 8-10 moving parts, so the ability to find somebody with a contract that can do all of that, and is vetted with Procurement, is itself a tremendous benefit to the end user.”
- Some agencies have made policy changes to make purchasing through their contracts easier for other agencies. Maria says, “We require all of our solicitations and contracts to include cooperative language. This lets our regional partners, departments, and cities to piggyback. Also, prior to soliciting, we reach out to have all of our partner entities review our scopes of works when we do choose to solicit to ensure that our terms are inclusive and can be utilized across our region.”
But it’s difficult for suppliers to effectively cover the SLED market through traditional channels, especially when it comes to finding agencies actively looking to purchase.
- It’s hard to reach everybody. Rick says, “We have an outside sales team. We have a marketing team. We work almost 200 trade shows a year. We’re reaching folks on Google. And we work really hard to get these contracts. We're very proud of what we do. Even with all of that, our biggest challenge is getting the message out to everybody. There are just so many folks in the public sector that no matter how hard you try, with all the different cities, all the different counties, all the different towns, it's really hard to get to everybody. The SLED market is so wide and so deep.”
- Timing is critical: Rick says, “Most of my customers say, ‘I have no money, no money, no money.’ And then they have $63,000 they're going to spend by Thursday at five o'clock. So it's so important to pre-position your cooperative contracts. And whether it's the end of the grant cycle and the fiscal year, most of my customers are in a very short period of time.”
"Our biggest challenge is getting the message out to everybody. There are just so many folks in the public sector that no matter how hard you try, with all the different cities, all the different counties, all the different towns, it's really hard to get to everybody. The SLED market is so wide and so deep." - Rick Bond, Chief Revenue Officer, Safeware
Even when suppliers are in conversation with agencies, they’re not consistently using cooperative contracts to their advantage.
- Sales teams are not consistently bringing up their cooperative contracts: Maria says, “Supplier sales teams don't always make it a point to bring that up in their sales pitch or materials. The supplier would be giving the public agency a reference check and a contract vehicle all at once. And that's like a Christmas gift for any procurement professional. It's been somewhat surprising how many suppliers didn't realize that. So we've been really just trying to get that outreach out there with our suppliers.”
- Bringing up cooperative contracts earlier on in the process is becoming especially critical as departments take on more procurement responsibilities. Rick says, “First, get those contracts introduced to the public customer. Second, try to get this information and visibility at the agency / department level. The earlier we start working with them, the more value we can deliver.”
"Supplier sales teams don't always make it a point to bring that up in their sales pitch or materials. The supplier would be giving the public agency a reference check and a contract vehicle all at once. And that's like a Christmas gift for any procurement professional. It's been somewhat surprising how many suppliers didn't realize that." - Maria Agrusa, County Procurement Officer, Orange County, CA
Click here for the full webinar recording.
Our next blog post shares how Safeware has been able to generate leads and recurring revenue from new customers through their existing contracts. For more information on how Pavilion can help suppliers sell more off of their existing contracts, reach out to us here.
