Source: www.TurfMagazine.com
If you’re a landscape contractor looking to extend your revenue stream, then you might be considering municipal and other government contracts. However, even if you’re an experienced commercial landscape professional it’s important to recognize that this line of work can be quite different.
Before transitioning into municipal/government work, you must first determine if you even qualify for it. According to industry consultant Fred Haskett, head harvester with The Harvest Group, municipalities, as well as state and federal agencies, often have a very clear set of specifications that a landscape company must be able to meet in order to qualify for the work. Bonding is usually part of that process and may require you to consult with legal and financial advisors. Surety bonds guarantee that your company will live up to its contract and legal obligations.
Another key difference with municipality work is that it often requires adhering to prevailing wage, something that many landscape contractors are not accustomed to doing. Prevailing wage is defined as the hourly wage, usual benefits, and overtime, paid in the largest city in each county, to the majority of workers. Prevailing wages are established by regulatory agencies for each trade and occupation employed in the performance of public work, as well as by State Departments of Labor or equivalents.
“Oftentimes, the government sets these jobs at a prevailing wage that is significantly higher than what local jobs are bidding out at,” Haskett says. “If you understand prevailing wage and are prepared for it, it’s not a problem. But if you don’t, it can be a trap. You must agree to let the government audit your payroll, and you don’t want to be caught not adhering to prevailing wage.”
Haskett says that you’ll want to consider how prevailing wage might impact paying your crews going forward. If they’re going to get what they view as a “raise” for municipal work, are they going to struggle with returning to their “regular salary” for other jobs? And will other crews not on that job hear through the grapevine that they’re making less? Haskett says he has seen these scenarios play out, and landscape business owners must be prepared with answers.
For Bill Horn, east branch manager for Gachina Landscape Management in Menlo Park, CA, the answer has always been “transparency.” Horn has many years of experience estimating, negotiating, staffing, and performing on municipal work ranging from $100,000 per year to $3 million per year with Gachina as well as for a previous employer. He says that trying to obscure the fact that municipal jobs mean crews on those jobs get paid more will ultimately backfire.
He also says that having crews specially designated for municipal work can keep the entire process smoother.
“Instead of flip-flopping crews back and forth between municipal and standard commercial work, we have always had designated crews,” Horn says. “There was an understanding that their trade craft—usually trades like heavy equipment operators or pipe fitters—were ones that paid higher prevailing wages. I don’t think there have been hard feelings when it’s usually understood that specialty trades naturally make more money.”
A Close Eye
Whether it’s payroll audits or just a close eye on operations, Haskett says to be prepared to be “under scrutiny.”
“Public works contracts, in particular, have a lot of audits and inspections as well as penalty clauses stating if you miss a deadline or score below a quality level upon inspection that they can perform deductions from your bill,” Haskett says. “I’ve seen companies get burned on this. You send out a bill for $14,000 and they pay you $7,000 because they say you missed two completion deadlines—even though perhaps it rained. You must be very aware of the language in the contract.”
Ben Carruthers, owner of Carruthers Landscape Management Inc., in Dallas, TX, says that performing municipal work is “like having a big magnifying glass on you.”
“You need to be sure you’re set up to handle it correctly,” he says. “There is a very small margin for error.”
Carruthers says that his company got into municipal work about 20 years ago on a small scale and grew it very slowly—which he recommends is the way to go. Make sure you have a good grasp on what’s required and whether you like the work before you start bidding on too many jobs, he adds.
“If you have performed commercial contracting for large clients then it’s going to be more familiar to you and an easier transition,” he adds. “That’s really the only way to do it because most municipal contracts are going to want to see you’ve done work like this before. If you are bidding on a $2 million municipal job, you’re going to need evidence that you’ve handled a $2 million commercial account and that you’re up to the task.”
Horn agrees and says that references are a big deal.
“You can be sure they are going to pursue your references—they want to see that you’ve done comparable work and done it successfully,” Horn says. “They’ll also find out where you’ve worked, even if you don’t include it. It’s best not to try to omit information. If you had a bad experience with a former client, it’s best to be upfront and tell them why so that they hear your side of the story first.”
Your safety record will also be reviewed, adds Horn. A poor record could easily disqualify you from a municipal job—where exposing the general public to any risk is a concern.
Going After Municipal Contracts
While there are clearly a lot of factors to address before making the leap into municipal, Haskett says that for landscape contractors who are “set up to handle it,” these contracts can be quite profitable. He says that RFPs (or, Request for Proposals) are public information. Therefore, you could call local or state entities and ask for their ground maintenance department. If you qualify, they are required to place you on the bid list, says Haskett. But you must ask to be placed there.
Horn’s best advice for contractors going after municipal work is to look for opportunities where you can negotiate—not those where they have historically gone with the low bid. “We cannot compete in the low bid arena, nor do we want to,” he adds. “Fortunately, the cities we have worked with have come to recognize that type of bidding is not good for anyone.”
Once you put your hat in the ring, Horn also advises to be prepared for an extensive interview process. You’ll have to sit in front of a panel and be able to represent your company—and know the client—extremely well, in order to remain a serious contender.
“Know the site, know your business, and make positive personal connections with the people you’re sitting with,” Horn says. “You must be able to establish those connections almost immediately. We set up a mock interview with our team and throw the hard questions at them. We commit a lot of time to rehearsing but it is better to be overprepared than underprepared. When it comes to this line of work, you must always put your best foot forward. It’s great work and it’s long-term work—if you do it right.
Getz is an award winning freelance writer based in Royersford, PA.
Do you have a comment? Share your thoughts in the Comments section below or send an e-mail to the Editor at acosgrove@groupc.com.