CONSTRUCTION Accounting ARTICLE - Contractor reaches for his slice of Recovery Act pie

Target Audience: Construction Industry Professionals, Business Owners, Project Managers, Contractors, Construction Accountants, Construction Success Stories Interest

A soft economy, as well as the prospect of snagging a piece of the American Recovery and Reinvestment Act (ARRA) pie, prompted a small midwestern contractor with little experience in government jobs to consider expanding into the public sector. While the lure of ARRA dollars was strong, he met with his financial advisor to determine whether an investment in government bidding could yield an appropriate return. Together, they developed a targeted approach.

Making the list

When the contractor and his advisor estimated the time and money necessary to participate in the extensive request for proposal (RFP) processes of certain government projects — and weighed his chances of winning those jobs — the outlook wasn’t favorable. For several projects in which the contractor was interested, offering a competitive bid while still being able to turn a profit seemed unlikely because of the contractor’s size, business approach and core competencies.

But there was one viable option that might allow the contractor to get his foot in the door. For certain government projects, the contractor could forgo RFP processes and instead participate in requests for qualifications (RFQ) — the process through which government agencies build qualified vendor/contractor lists.

If the contractor made the list, he’d be able to skip many time-consuming preliminary steps in future bid processes, increasing his chances of long-term profitability.

Rolling with RFQ

To get started, the contractor went online to research government agencies’ sites, such as that of the U.S. Small Business Administration (http://www.sba.gov). There, he learned about the qualifications needed to win government projects, including registering his business in the Central Contractor Registration. He also became more familiar with regulations and tax provisions related to ARRA and general government contracting.

The contractor then began to look for RFQ opportunities on FedBizOpps.gov (https://www.fbo.gov). In accordance with his advisor’s recommendation, he considered only projects that fit his company’s size and that would allow him to price his services competitively while still being profitable.

While RFQs focus on qualifications such as past projects and business approaches, rather than price, the contractor still needed to think about the long-term viability of his RFQ response choices.

Catching a break

After being added to several qualified contractor lists for various government projects, the contractor eventually caught his break: a job restoring a local public school. The government agency responsible for the project was pleased with a job well done and referred the contractor to several other local agencies. With its name listed and a successful project under its belt, the construction company looked to be in much better shape going forward.

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