How do government agencies use auto rentals? Short-term vehicle rentals or leases often make sense for government agencies looking to save money. Agencies may rent cars for infrequent drivers, rather than taking on the cost of acquiring and maintaining vehicles in a motor pool.
Or agencies may need a vehicle to fill a particular need. For example, for undercover work, police departments sometimes use vehicles that blend in with those in the neighborhood, such as an import or a high-end car not normally found in government fleets.
According to the Alexandria, Va.-based Society of Government Travel Professionals, U.S. government travel represents a $28 billion market. From the United States Marine Corps and the FBI to state universities and the local parks and recreation department, government agencies can be a good source of business for rental car companies of all sizes.
Where Do You Start?
“When you run your own business, you are involved in so many daily and long-range planning events that procuring government business is often too daunting, and placed on the backburner until the date for filing has passed,” says Sharon Faulkner, a Thrifty Car Rental franchisee and president of Faulkner Leasing Co. LLC in Albany, N.Y.
Contract Listings & Databases
Federal Business Opportunities:
Managed by the GSA and designated as the single source for federal government procurement opportunities that exceed $25,000. Vendors can use the system to find upcoming contracts without registering.
Federal Procurement Data System (FPDS):
Identifies who bought what, from whom, for how much, allowing vendors to find potential customers.
Where in Federal Contracting? (WIFCON):
Compiles links to federal solicitations; state and local governments; contracting acronyms and jargon; federal government e-malls, GWACS; state and local contracting alliances; as well as legal, personnel, regulations and events information.
However, the government is obligated to provide assistance in learning about its contract procedures, and most branches and agencies are easily accessible on the Web.
The U.S. General Services Administration (GSA) Web site should be one of the first Web sites company owners visit. Providing a wealth of information for vendors and contractors on how to market services to the federal government, the GSA site is also one of the gateways for getting your name out to travel buyers. A system called GSA Advantage! serves as an online marketplace for government employees shopping for services.
U.S. General Services Administration (GSA):
Click on “For Contractors and Vendors” for training, regulations, getting on a GSA schedule, how-to documents and e-tools for submitting bids and processing payment.
Online shopping and ordering system for federal government employees using GSA SmartPay purchase cards or GSA Activity Address Codes (AAC).
When researching government agencies online, one of the key words to look for is “procurement.” This term refers to departments within state or federal agencies that handle the distribution and acquisition of services for that agency.
“In New York, we have a program called the Procurement Outreach Program (POP),” Faulkner says. “It was developed by the Department of Small Business and it helps businesses to identify and understand how to successfully bid on federal, state and city contracts. They even have classes to help you procure this market segment as well as one-on-one counseling to prepare your bids.” [PAGEBREAK] Faulkner says the reason businesses end up needing assistance is simple. “Every piece of paper you are given from a government agency is complicated,” she explains. The sheer volume of contracts, the differentiation from agency to agency and the intricate requirements of the bid process can all make the process seem overwhelming. Subscription services send out lists of upcoming contracts. For a fee, vendors can help untangle government contracts and assist in their completion.
Many states also offer electronic procurement opportunity newsletters, says Faulkner, and signing up to receive these newsletters by email can also be a source of leads to government jobs with your state. “In New York, ours is called the NYS Contract Reporter and it contains notices of bid solicitations,” she says. “Unfortunately, it takes time to wade through the many services being solicited and quite often none of them will pertain to vehicle leasing or rental.”
She also recommends checking the business journal or business section in your city’s newspapers. “Many of them carry information about contracts coming up,” says Faulkner.
Focus on Small Businesses
While some larger government entities contract with the major rent-a-car companies, many others have a mandate to procure services from small businesses. Yet another route for a rental company to attain government business is to get certified in one of the mandated minority categories, which include businesses owned by Native Americans or other minorities, women or veterans.
“When you become certified, it will open your business up to more opportunities to win bids based on your ability to fulfill a government requirement for minority participation,” says Faulkner. “It doesn’t guarantee you the award, but it gives you an edge over your competition that doesn’t qualify.”
The certification procedure includes a written application and an interview, says Faulkner. “You discuss with an interviewer everything from how you plan your fleet to how you bonus your employees, workman’s compensation rules, accounting practices, customer service and depreciation practices,” she says.
Faulkner’s business is listed with the New York State Department of Economic Development, Division of Minority and Women’s Business Development. “They provide my company’s name and address to many different agencies in an effort to not only provide my business with leads, but to provide those companies with an avenue to meet their own requirements for use of minority businesses,” she explains. [PAGEBREAK] The U.S. Small Business Administration also certifies businesses based on size, minority group ownership and other factors. Besides enabling these businesses to gain government jobs, the SBA also provides free online training courses and step-by-step instructions on completing and submitting bids.
U.S. Small Business Administration – Contracting Opportunities:
Offers two free online courses on government contracting, lists nationwide locations of Small Business Development Centers (SBDCs) and offers how-to information on bids and proposals.
There’s an alternative to hunting down contracts online. If you prefer face-to-face networking and hands-on learning experiences, try attending the trade shows and educational conferences held by travel associations that cater to government agencies. Through membership with such groups, rental companies can meet with decision makers and buyers, take classes on the contracts and proposal process and set up exhibitor booths at expos.
Clay Cribbs, national sales manager for Texas-based Advantage Rent-A-Car, says the Society of Government Travel Professionals is probably one of the best ways for him to network. “They educate the government people to do business with the industry, and they educate the industry on how to do business with the government,” he says.
“They’ll assign you a mentor specific to your industry, somebody to walk you through procedures and introduce you to some of the key people,” says Cribbs.
The organization holds a training seminar and education conference every September and a travel conference every February in the Washington, D.C., metro area.
Make Contracts Come to You
Getting on a list of approved vendors will allow government representatives to contact you with requests for proposals (RFPs).
The Military Surface Deployment and Distribution Command (SDDC) currently manages the car rental program for both the military and the federal government, but plans to transition the program to the Defense Travel Management Office in March 2007. Upwards of $300 million is spent annually on car rental, with 2.25 million cars rented by the government worldwide, according to SDDC statistics.
The program utilizes the U.S. Government Car Rental Agreement, currently in its third revision, which allows government travelers to receive better rates, unlimited mileage, reduced age restriction and collision damage waiver insurance. A rental company must fill out the full agreement just once. Cribbs says that since he took over his position at Advantage the only part of the car rental agreement paperwork he ever has to deal with is updating new locations or rates, which he submits on an amendment form.
National Defense Transportation Association (NDTA):
Connects government and transportation-related industries, provides links to military, government and transportation associations and holds annual conferences and training symposiums.
Society of Government Travel Professionals (SGTP):
Provides a glossary of government travel-related terms and guidelines, educational articles and e-news and information about upcoming SGTP events.
“Once you’re approved by them, you’re on the list to do business with any branch of the government that wants to work with you,” Cribbs says.
Advantage is one of the 22 rental companies currently listed by the SDDC. The list of approved vendors includes both the major, national rental companies as well as some smaller, independent companies serving different regions of the U.S. [PAGEBREAK] Cribbs is the contact person for Advantage listed with the SDDC and the Central Contractor Register (CCR), so all RFPs for federal or military contracts sent to the company come across his desk. “If you’re listed in the CCR, it tells your locations, fleet size and the size of your business. Some contracts require a small business be involved, so you may be bidding against people who are local and have a quicker response time than you would,” Cribbs explains.
Because federal and state contract requirements are so different, Advantage divides government contracts between two staff members, with Cribbs managing federal and military contracts and another department head handling contracts with the State of Texas. The company is the main car rental contractor with the Texas Building and Procurement Commission, and also with the University of Texas.
What Are the Deal-Breakers?
Cribbs says most of the contracts he sees from the military are small, job-by-job bids for transporting people from base to base or department to department. Usually the request is sent out to more than one of the approved rental companies. “It’s pretty competitive,” he says.
When it comes to insurance, Cribbs says state law requires Advantage to provide liability, but with a military contract, “the government can provide their own liability, and it’s up to them to designate in the RFP how they wish to address this,” he says. “They know [Advantage’s insurance and collision damage waiver] really boosts the rate up, so because they have their own insurance for all the vehicles on the base, they say, ‘we’ll cover our own.’”
Price point and vehicle availability is still the most important factor in winning the bid, according to Sharon Faulkner. She recommends knowing the proximity of the military operations in your area to your office as an important factor for your bidding criteria.
“They occasionally need passenger vans to provide transportation for the National Guard during a time of crisis,” says Faulkner. “Since that is done with little or no notice, there is no bid involved. You just need to be the one with the available vans.”
Get On the List
Central Contractor Registration (CCR):
Allows vendors to register their company and contact information for free. Vendors can search for contracting opportunities and government agencies can search for vendors.
Surface Deployment and Distribution Command (SDDC):
U.S. General Services Administration (GSA):
Watch for Underestimated Miles
Faulkner says that over the years, her company has successfully won contracts from nearby military divisions for short-term leases. “You normally have no control over the number of drivers using the vehicles, because it can work like their substitute motor pool, and subsequently there are no additional driver fees,” she says.
In non-SDDC contracts, she says companies can set driver age requirements and mileage limitations, but any contract limitations may result in your bid being rejected. “And that may be the right thing for your company to do,” she says. “Errors with these contracts on your part can cause a loss to the bottom line rather than an increase in revenue, so always err on the side of caution.”
Faulkner’s company once won a major contract to provide rental cars to employees of the State of New York. “They were closing down their motor pool and we provided the vehicles for one year,” she says. “We found that their mileage estimates per trip were grossly underestimated.”
Faulkner questioned the mileage estimates at the time of the original bid, but she says the state assured her they had studied their needs and the mileage was correct.
She ended up with a fleet of vehicles with too many miles on the odometers, making it extremely difficult to dispose of that fleet without a loss. “We declined to renew the bid the following year and the State was not happy,” she recalls. “They said their employees loved our service and they wanted us to continue but we didn’t. We cut our fleet losses and let the state business go even though the revenue was substantial.”