Alternative Ways to Sell to the Government Part 2: Discretionary Spend and P-card
Today we are going to discuss two more ways the government spends outside of the bid and RFP process. The methods are known as discretionary spend and P-cards.
One of the simplest ways a government agency will avoid the Bid/RFP process is to purchase something under their discretionary spend limit. Many folks don’t know this, but almost every government agency has a discretionary spend limit. That’s the amount of money the head of procurement can spend any time they want. This amount will vary based on the size of the agency and, like many things in the government process, seniority. For instance, if someone has been in that position for 20 years, the discretionary spend limit may have risen over time, as they’ve been in that office and working with the city council or with the mayor to increase that limit.
That spend can change over many years, or very quickly. For example, a city may have a discretionary spend limit of 10 grand until they hire a new head of procurement. City council may lower the limit to around five grand until they get to know that person. It’s a matter of trust since they’re dealing with public money.
This is important for you because, if your product or service fits below the discretionary spend limit, the agency can buy your product tomorrow. If your product or service is over the discretionary spend limit, I encourage you to think creatively. Can you break your product or service up into segments? Could you deliver it at different times? Can your pricing structure change so you’re only charging, say, 5k at once? If you can make those changes, you can sell even faster.
One quick side note — finding out the discretionary spend limit can be challenging. Procurement officers don’t openly advertise that information, and they often will refuse to answer when you ask. They know that you’ll try to get below that limit or be around it. So, it’ll generally take some creativity. But once you find the discretionary spend limit, get your product or service under that price and avoid the entire bidding or RFP process.
Now let’s talk about the simplest method of government procurement outside of bid and RFPs. Almost every government agency has a set of employees with P-cards. A P-card is essentially just a credit card; the government just wanted its own unique acronym, so they decided to call it a “purchase” card.
With that p-card, these trusted employees each have a spending allowance that refreshes every month. They can purchase whatever their agency needs in that moment, as long as it’s below the limit of their p-card — no bidding, no RFP forms, no quotes.
If you have a product or service that fits within an agency’s P-card limit, a government
buyer can literally go out today and buy your item or hire your service. Think about it.
If they need printer paper, pens, and pencils… They have a P-card. If they need to pick up something for a holiday party, they have a P-card. All they need to do is run to the store. Grab what they need for off a shelf, check out, and go home. What you want to do is make sure they purchase those things through you.
Do your homework. Find out who at an agency has a P-card and target your sales efforts there. You may even create a repeat customer.
These are two incredibly easy methods to sell to government agencies. Although you may have to do some research to find out the limit of their discretionary spend or which employees possess P-cards, it is much more simple than going through the complicated bid and RFP process.
I hope you found the explanation of these alternative government procurement methods helpful. If you need further guidance getting started, GovSpend has your back. Sign up to receive bid notifications, view historical purchasing, and find agency contacts in just a few clicks. You can start winning government business today — just ask me how!