After bidding and landing a 200-acre Navy contract in 2001, James Derrington, owner of J&J Landscape Management in Alexandria, Virginia, came across a whole new world of opportunity. Prior to 2001, Derringer, who founded his company in 1998 when he was 22 years old, had focused almost exclusively on residential and commercial work.
Derrington admits landing the Navy contract was intimidating. “We were used to doing smaller projects and suddenly we were responsible for 200 acres. But as with anything, you don’t really learn until you’re out there, and that’s what we did.”
In time, Derringer — navigating the many unique challenges government contracts present — became more comfortable with large-scale work and began landing some high-level government projects. Today, about 60 percent of the company’s work is municipal and federal.
Navigating the red tape
“This kind of work definitely comes with bureaucratic red tape,” says Derrington. “When you’re working on a government job you can be sure they’re going to scrutinize your company in a way other clients wouldn’t. They will be looking at your licensing, insurance and more.
“In some ways it’s nice because it levels the playing field and you’re only competing with other strong companies,” he adds. “But some of the reporting requirements required on a government job can be burdensome to office staff. If you’re going to get into municipal work, you may need to bulk up your office support.”
Another challenge, Derrington says, is complying with strict payroll and living wage requirements. These rules increase labor costs and can cause discord among crews because employees on government jobs must usually be paid a higher wage than their colleagues working on residential or commercial properties.
“Having different pay rates is definitely frustrating for the crews,” says Derrington. “If crews are making $15 an hour for one job but it’s bumped up to $18 an hour for a federal job, they’re not going to want to go back down to that lower wage. You have to be able to reconcile these wage issues. The answer may be paying everyone the same higher wage if you can swing it.”
Beyond the wage requirements, contractors often find the process of working with government clients to be frustrating.
“There are more hoops to jump through,” says Chris Lee, president of EarthWorks in Lillian, Texas.
The bidding process, in particular, can be challenging. “If you want to be successful with government clients, you really need to understand the bid process because you only get one shot,” says Lee. “It’s not like bidding a commercial job where someone will call you and let you know your numbers are a little high or you left something out. You don’t get a second chance for adjustments. That’s your shot to get it right.”
Hoops to jump through
Sorting through contract terms can be challenging with government work, says M.J. Macias, the branch manager for the North Bay office of Gachina Landscape Management, headquartered in Menlo Park, California.
Macias says government contracts tend to be specific and very involved. “It can be very time-consuming for my managers, particularly if they’re handling different municipalities and they all have different terms, which they usually do,” he explains. “For instance, one municipality may insist upon organic products while another is happy as long as the grass is green. You can’t please everyone, but you must be diplomatic without allowing it to eat up too much of your time.”
“Since many people report things to the city, it is easy to get lost putting out fires all over,” adds William Cruz, branch manager of Gachina Landscape’s East Bay location. “The city takes reports from residents as urgent matters.”
Job safety is huge, regardless of whether the client is a commercial property or a government site, but government jobs come under closer scrutiny.
If you’re on a municipal job, you will absolutely get a call if you’re not compliant, such as not wearing the proper safety gear or not having flashing lights on the mowers,” says Lee in Lillian, Texas. “We go overboard on safety so that we’re not missing anything. For example, we traditionally always wore bright green uniforms but now we’ve switched to orange for municipal work just to ensure we really stand out.”
Another frustration of doing government work is delayed cash flow. Derrington says he knows he’ll eventually be paid but sometimes it can go out as far as 90 days. “With the government, you do know the money is coming, but you still have to be prepared to handle those delays and variances in cash flow,” he says.
And though he likes the large scope and long-term work (many government contracts are three to five years) of these projects, Derrington says the lack of personal relationships is a big downside.
“It’s high-profile work, and you’re getting your name out there,” he explains. “But you’re not building relationships and that’s frustrating. Contracts will go for the lowest qualified bidder every time; it’s just about the numbers.”
“When we work with commercial clients, we’re often the highest bid but will still get the contract because people know and trust us. That doesn’t mean anything when these government projects must adhere to federal procurement laws,” says Derrington. As a result of the lack of relationships, word-of-mouth is rarely a factor in government work.
Looking for the jobs can also be a time-consuming process. “It involves a lot of searching online for opportunities,” Derrington says. “If you really want to do a lot of this kind of work, you could probably hire someone to do searches every day. We try to divvy the searches up so we have multiple people looking. These things are easy to miss, and if you miss your chance to bid it’s too late.”
Large and long-term projects
In spite of the many challenges, government contracts offer some great opportunities, for instance, the size and scope of projects as previously mentioned being the most obvious, says Derrington.
“How often can you find a 200- or 300-acre site? The scope of the work is a huge plus,” he says.
Another plus — in terms of job efficiency anyway — is the nature of large, long-term projects. “Day in and out, you’re doing the same thing, and it’s not going to change,” adds Macias in California. “Most of these jobs are three- to five-year contracts so crews can get comfortable with the property and become very efficient.”
“It’s very satisfying to do things on a large scale,” adds Gachina Landscape’s Cruz. “Right now we are converting turf areas to mulch on street medians. It’s a great time to be in the landscaping industry, witnessing the paradigm shift that is going on in California regarding turf areas. Our work is very visible on the streets and people are watching the outcome so it also provides free advertising. People are seeing our trucks all over the city.”
Macias agrees. “Municipal work really gets your name out there. My branch alone handles three municipalities and our name gets out to all of those communities. People know our name because they see our trucks. With this kind of work you’re often parked in very visible locations.”
Lee agrees his company has gained new clients with this visibility in his Texas market. “We’ve picked up several new commercial jobs because of the extra visibility we’ve gotten from municipal work. You’re not tucked away on a property where people can’t see you working. You’re in public parks and on medians. Many of these commercial clients that have picked us up know we’ve been scrutinized and had to meet certain criteria in order to work for the city so they feel more comfortable with hiring us.”
Lee also appreciates that most municipalities have trained and knowledgeable horticulture and grounds professionals who understand and appreciate good work by fellow professionals, contractors included.
Lee says homeowners and property managers are more likely to complain than municipal grounds pros when they see a patch of yellow grass or ornamentals out of bloom. “Then you have to take time to explain that it’s just a transition period for the lawn or that you just did the rose bush pruning. The municipal clients have parks and recs guys who understand horticulture and have done mowing and maintenance themselves. You’re not going to field a lot of those questions and calls because they understand the process.”
While Derrington is being more selective about the government jobs he chases because he prefers the relationship building that comes with doing residential and commercial work, he’s grateful for the value that government work brings to his company.
“It’s gotten our name out there and helped us build a great reputation,” Derrington says. “It may not be for everyone, but there is great potential in these markets.”