Understanding Bidding and Procurement Systems

The first and most prevalent thing to know about purchasing systems is that they are ALL different, more so in some states than others. As you become familiar with purchasing systems, you will notice that some states use the same system all the way from the governor's office to park land improvement to Depts. of Transportation. In this case you will have to get down to the regional or county level to see a different system in place. In other cases however, purchasing is "de-centralized" (as in Mississippi for example) and every single office of every single department throughout the entirety of the state will have a different system in place. You will also find every combination between the two extremes. Some states will have an electronic system in place, but all correspondence must be on hard copy. There will be states that are ONLY electronic and will not respond at all to hard copy (Florida for example). There are some states with no electronic system at all and the only thing you can get from them on the internet is an Adobe Acrobat® form to print out, fill out and mail back in.

In most cases, state parks are serviced by their respective state's vendor list. That is to say that the overall state vendor list and the state park vendor list is one in the same. So to get to the parks you must go through the state. This could be a benefit, depending on your product or service, as there may be more opportunities for you than you had been aware of based on statewide coverage, rather than focusing on parks alone.

There are three main types of offices that oversee statewide purchasing. They are of general services, procurement and purchasing/accounting department(s). In some cases (especially that of procurement departments) the office is a direct branch of the governor's office or more particularly, the secretary of state's office. Typically, the particular buyer (whether that be one park or a group of similarly classified parks) sends up a request for materials. The overseeing department approves or disapproves of the purchase and an invitation to bid is published by the overseeing department. Also typically, all returned bids are collected and kept for a public opening of bids after the invitation has expired. Most states are not very forgiving when it comes to accepting late bids and some will remove your name from the vendors list if you do not return bids for a pre-determined number of times in a row (most common is three times). The bids are then examined by the purchasing agents and a decision is made to award the bid based on price, quality and experience with the vendors that have submitted. Awards are made by actual people and are not based on price alone! The bid is then closed and notification is sent to participating vendors as to whom the bid has been awarded.

Payment is then made to the vendor as per each state's policies. All payments are made from the overseeing dept. and vary greatly in when and how they are made. Many states now have an electronic payment system, which will pay the vendor with a secure money transfer to the bank account they have listed when they signed up to be on the vendor list. These are typically made either quarterly or on a net-30 basis. Many states still mail checks at the end of the month in which they received an invoice from the vendor and in some cases payments are made after the terms of the bid have been completed.

In cases where the purchase amount is not large enough to require a bid be issued or often in preferred vendor conditions, you can expect something similar to a purchase order system.

In any case, your first few sales to a particular park district or state are the most crucial. If you plan to build a lasting relationship with them, your company needs to provide a good quality version of the correct product, delivered on time… the first time. It may surprise you to see how many park districts or in some cases entire state purchasing systems will form their opinion of you, that they will remember from now on, (or at least until a change of administration) based solely on their first purchasing experience with your company.

It is fair to say that dealing with multiple states' procurement and bidding systems is difficult and confusing. Our suggestion is to take the time or outsource the time if you want to be competitive in the park industry. The difficulty and complexity of dealing with all the different park purchasing systems has thinned out would be participants and presents golden opportunities for those with the patience and understanding to utilize it. Most states also try to buy from in-state vendors if they can, but budgets and auditing are demanding that they allow outside competition and it is not impossible to win a bid over an in-state vendor. This being the case, your diligence could be what sets you apart from your competition and secures your precious marketshare within state park purchasing systems.

What it is now and where it is going

The general idea of bidding systems is to get the best possible price for good quality products, thereby saving tax dollars while still being fair about where tax dollars are spent. This has not always been the result of state bid systems. In the past, a lack of understanding on the part of vendors about how to bid and what was open for bid has led to lackluster participation and little competition. There have also been issues with adequate or prominent publishing of bids on the part of the states and a lack of media, intended to educate vendors about the parks' individual systems. One could say that there have been communication issues between the states and their potential vendors. Currently, the Internet and budget issues are obsoleting this situation and forcing the states to buy more competitively. The public, for example, is in a trend of expecting more services from their park systems without paying more for them… or in some cases less, than before. Many park systems are implementing incentive programs to encourage their administrators to save money (see Entrepreneurial Budgeting System for Texas State Parks: http://www.ti.org/txparks.html) and these new programs will all include more competitive purchasing.

California, Texas and several other states are using or will use an initiative called "Strategic Sourcing." Strategic Sourcing, in general terms, means that the state purchasing departments will have purchasers on staff that actively and aggressively search for the best bargains for their state and will shop outside of their current vendor list. There are only a handful of states using a Strategic Sourcing program currently. However, the ones that are using it are showing huge savings and one could expect that the other states will adopt similar programs. The best way to plan for success in a future Strategically Sourced market is to develop your relationships now and be a 'preferred' or 'single source' vendor when Strategic Sourcing is implemented by your clients.