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Growing Your Business |
Moving Up To Municipal SweepingUnderstand that it's a major commitmentby Ranger Kidwell-RossConvinced that money is waiting to be made in municipal sweeping? This can be true. But as you make your decision whether to take the plunge, don't underestimate how time consuming, expensive and complicated it is to work with cities. 
In line with the bigger payoffs, the ante is typically much higher in dealing with municipal sweeping, and it only begins with the costs of the larger sweepers which are required to do the job. Compared to contract sweeping, there are also relatively higher costs for operations, dumping and insurance, as well as the expense of both performance and bid bonds. Although the potential rewards can clearly outweigh the costs for the successful bidders, it is not an endeavor for the faint of heart or thin pocketbook. One complication in working with municipalities is that two distinctly different areas of the city management typically need to be contacted: the public works department, where the actual work is currently done or overseen, and the politicians whose job it is to supervise public works. Since there is no "best" order in which to contact these, it can be a fine art to learn how to make your contacts without, shall we say, upsetting the hopper. Especially in a large city that now does its own sweeping in-house, the array of personnel who will need to be convinced can be very daunting, indeed. On the public works side, these almost always include the street superintendent, city engineer and public works director. Contacts on the political side may be the mayor, city council members, finance directors, purchasing agents and more. This is a very dynamic system to work within, and trying to get your message across can become a frustrating experience. At first, you may count success as just getting a fair hearing. If services are now contracted out to a private firm, you should have no problem finding out when the current contract expires, and then arranging to be placed on the bid list. It can be as slow as a turtle, however, to get a city to change from in-house sweeping to contracted services. If the city now does the work in-house, recognize that the average street department is not going to want to give it up. It means loss of personnel and, perhaps more importantly, an erosion in power and prestige - sometimes even pay cuts - for the people now in charge. Added to that is the fate of those who operate and service the sweepers currently. In these situations, your best bet will probably be to work from the political side. This is because contracting sweeping out to the private sector is more and more being seen as a lower cost solution, and the opportunity to save money will stand more chance of being attractive to those responsible for balancing the budget. The challenge in this, however, is to approach the politicians without alienating the city management staff. 
When you do your prospecting for municipal work, be sure to dress the part. For a small town your standard blue jeans and work boots may be just the ticket, but don't count on it. In a larger place you will almost certainly need to dress the part of an accomplished executive who represents a successful business. The lead time is often as much as 2 to 5 years from first contact to awarding of a bid. For that reason it is very important that you keep good notes throughout the process, and exercise a high level of patience along with a professional, consistent follow-up program. One reason it often takes a city a long while to decide to change to contracted services is that in smaller towns the turnaround on sweeping equipment can be as much as 7 to 10 years. Because the purchase of a new sweeper will represent a big bite to a small town budget, be sure to find out how old their current sweeper is prior to making official contact. If it is about worn out, your privatization argument may get a better hearing. Even if it isn't, you may be able to strike a deal which includes you buying their current sweeper from them as you take over service. Even if you can't use the machine, it may prove profitable to settle on such an arrangement. Bigger cities may change out their sweepers as often as 2 to 3 years. Because of the above argument, this may at first be seen as an advantage. Since that's the way they have been doing it, however, their administrations often expect any contractor to use newer equipment, too. Another disadvantage seen in the larger, more sophisticated cities is that they often require huge liability bonds from any contractor who wins the bid. For the medium-sized cities on your target list, the age of their equipment may be a factor you can use to your advantage. If they have four sweepers, for example, and one is ready to be retired, management may be more open to trying out a private contractor on just that one route. Then, if it shown to be more cost-effective, they are more likely to be persuaded to change some or all of the rest. To date, though, a surprising number of cities which have gone private have kept at least one route in-house. Many feel that this helps foster competitiveness. Since you will inevitably have up- front expenses, you need to recognize that it may all come to nought. Even if you are able to - finally - get the city fathers to go private, keep in mind that your company may not end up getting the contract. After you worked your tail off to get the city to let bids on their sweeping, it may be that another contractor will end up with the winning combination. Most administrations don't require that a sweeping award go to the low bidder: the right equipment, experience, meeting the requirements (bonding, etc.) all count. Bid awards are also often a good example of a catch 22 situation, in that many cities insist that any successful bidder have previous municipal experience before they will award them the bid. If your company has never done street sweeping, be sure to request - preferably in writing - whether or not that will be considered a factor. Although you can't realistically expect to go from handling 3 parking lots a week to sweeping the city of Seattle, most smaller towns will not be as fussy. Many city administrations are sophisticated enough, however, to require that your equipment and experience meet or exceed that of their current in-house crew. Beware the pitfall of bidding for a city contract when you will need to buy a sweeper(s) to handle it if you are successful. Although many municipal contracts are for only 1 or 2 years, you will probably be financing the sweeper over 5 years. If, for whatever reason, the contract doesn't get renewed, you could find yourself trying to sweep parking lots with a municipal machine. You may think that a viable alternative is to perform municipal sweeping with your current heavy duty three-yard parking lot sweeper. If so, forget it! Although powerful, these types of machines simply aren't made for street applications. They are primarily made for handling open areas, and, as just one example, the pickup on the wrong side for effective street cleaning. These machines will typically handle parks department-type jobs just fine, however. Virtually all municipal accounts will require that you sign the city's own contract. Before you submit your bid, make sure that you understand all aspects of both the sweeping specifications on the job and the agreement you will sign if you win the bid. Key elements include the escalation clause (how you are able to pass along unavoidable cost increases in areas such as the cost of living, fuel costs, dump fees, etc.), requirements for age and type of your equipment (how old can your units be, of what size, and must some be broom and others vacuum, etc.), level of competency (how is the quality of the job to be judged, by whom, and what are the penalties for non-compliance), where sweepings are to be dumped, circumstances under which either side can cancel, and a detailed explanation of what will and will not be swept. If you are unsure of any parts of these documents, ask for an additional explanation, again, preferably in writing. Don't accept verbal modifications on either the specifications or the contract itself. One contractor told us of being asked to bid in a situation where the specifications had very restrictive wording - and heavy dollar penalties - if routes weren't completed on any given day. The public works director assured him, however, that actual enforcement would be done weekly, not daily. The contractor's concern was that if a different person took over the job, compliance might also change. When asked to put it in writing, the director got quite upset with the contractor before finally agreeing to write it in. The punch line was that the director was offered another job a week or so later, and left within the month... Although it is becoming more rare, in the past there have been many instances where specifications have been written to provide a 'sweetheart deal' for one of the area's contractors. If the specifications contain wording which appears to be highly restrictive, or which effectively restricts bidding to only one brand of sweeper, ask for an explanation. Also, before you compute your bid you should try to get an assessment of why the city is contracting out their sweeping. If the public works department is being forced into the change, do they seem likely to make compliance difficult? If so, factor that into your bid. Something else which can help greatly is to find out as much as you can about the city's current costs of service. Often employees in the accounting section are willing to work at finding this out for you. Schwarze Industries can also provide you with a checklist which is very helpful as an aid to including all costs associated with in-house sweeping services (this can be useful for helping a mall manager come to a better understanding about the costs of running their own sweeper, too). For a copy, call 1-800-879-7933 and ask to receive the Sweeping Expense Checklist. In this era of budget crunches, more and more cities are becoming willing to look at anything which will reduce their cash outflow. The contracting of sweeping services to the private sector is increasingly being viewed as an area where such savings are possible. This, especially in light of the new EPA guidelines concerning groundwater contamination, is causing more cities to re-think their current sweeping strategy. Industry analysts expect this to provide an increasing window of opportunity for private contractors. As outlined in this article, however, there are many pitfalls for the unwary. When Working On Municipal Contracts, DON'T:
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