Reggie Tymus, president of Capital City Limousine
, often stations himself as a backup near the White House in case there is a problem with a chauffeur and security clearance.
Reggie Tymus will often wait in his car near 1600 Pennsylvania Ave. to ensure there are no problems when one of his sedans is about to enter the White House to drop off a diplomat. “If for some reason my driver or vehicle is not cleared by security, I can take over because I have all proper credentials and clearances,” says Tymus, president of Washington, D.C.-based Capital City Limousine.
Now in business for 28 years, Tymus knows from experience that when you sign a government contract for transportation services, there is no tolerance for error.
Within six months of winning its first government contract, the U.S. Department of Labor descended upon Reston Limousine of Sterling, Va., for a thorough audit. “I thought I was doing everything right,” says company President and CEO, Kristina Bouweiri, “But I was told I was paying my drivers 30 cents less than required. That was a big heads up for doing business with the government because it took about six months to get through the audit and all of the paperwork that is involved in fulfilling the contract.”
David Glazier, president of Fleet Transportation of Alexandria, Va., had similar experiences: “A government contract could require a certain number of vehicle seats, and if you are one seat short, you could default on the contract — it’s very strict. Perfection is required to meet all of the requirements.”
These three examples underscore the issues — and anxiety — of dealing with federal government contract work. [State transportation contracts are not as intense, operators say]. However, the upside is operators can add government work as a lucrative niche of consistent revenue in good and bad times.
Of course, knowing that the government is price sensitive, operators need to make sure RFP bids are competitive to nail the contract, while ensuring you make a profit for all of the work and requirements mandated by the contract — especially the fine points that cannot be overlooked.
Case in point: “The contract only allows you 30 minutes to recover from a problem,” says Bouweiri, whose company provides daily employee shuttle transportation for many federal divisions. “So if a vehicle breaks down, you literally have 30 minutes to provide a backup. That means you have to budget for another bus and have it placed in a strategic location in case it is needed — otherwise you are not going to be compliant with the terms of the contract.”
In fact, because the company has been a major government vendor over the years, Reston has its own maintenance crew to make sure buses are up and running to provide daily shuttle service from 6 a.m. to 6 p.m. “It’s the same fixed route service every day and you have to have the buses to fulfill the contract, no matter what,” Bouweiri says.
When going after state government contracts, it’s not so much price driven as it is establishing a relationship and providing quality service,” says Stephen Story, president of James River Transportation, based in Richmond, Va.
“Yes, there are some RFPs that are price driven, but a lot of state work that we get is from building relationships, providing quality service and our emphasis on safety,” Story says. There is a “misconception” that state work is all about low pricing.
Stephen Story, president of James River Transportation
, says your service and safety reputation can often outweigh price for state contracts.
“We are known for our safety record and driver safety training, and that is important to state government. There are companies that will price lower than us, and we’ll lose some bids, but we provide a higher level of service that is appreciated and that drives business to us,” he adds.
State transportation contracts can vary from one-off jobs to short- or long-term service. Examples include providing buses for group outings; sedans to transport officials and dignitaries to events and meetings; transport employees if, say, a parking lot is under construction; or long-term business to provide daily shuttle service for a state university.
In August, A Goff Limousine & Bus provided 28 mini-buses for a Virginia government event. The company, which serves the east and central Virginia that includes Richmond, Norfolk, Virginia Beach, and Charlottesville, is an experienced state and federal government transportation vendor.
Some of the largest state contracts are with state universities providing shuttle services, as well as other government-funded education and medical institutions, general manager Dan Goff says.
Dan Goff, general manager of A Goff Limousine & Bus
, advises that state universities are a good source for transportation contracts.
For example, the company provides a variety of buses, sedans, mini-coaches and vans for the University of Virginia. “Our biggest clients are government entities and this business is not about providing stretch limousines; it’s about providing sedans, vans, minibuses and motorcoaches to serve big and small government needs,” Goff says. He notes that services can range among providing transportation for state functions such as inaugurations; handling political motorcades for VIP speakers and dignitaries; shuttle service for departments such as forestry; or to transport state employees if there is a temporary need, such as a highway construction project or a bridge shutdown.
Tips To Get In The Game
The most important first step to get in the government transportation business is to get certified as a qualified vendor. Government contracts target small-business vendors and set aside contract work for minority and women-owned businesses.
“It’s critical to get certified by the GSA (General Services Administration) to get federal government work,” Tymus says. “And certification is also required for regional state and municipal contracts, too. You don’t have to be a minority-owned business; any small business can get certified to get on the government vendor list.”
President and CEO Kristina Bouweiri has a long history of providing transportation to Washington, D.C. federal agencies.
The easiest way to get in the government game is to start with a one-off contract, Glazier says. “It could be a charter job to take a group to a function that could get new operators started.” Bouweiri adds that operators also should get familiar with government agencies and market directly to them. “You have to get your name out there so they know you exist. They need to know about your fleet. The government is leaning towards less flash and looks for large group vehicles that provide value.”
Because government contracts run from one to five years and are based on past performance (as well as price), starting with a one-off contract is a great way to earn credibility and learn the intricacies of government contract work. “If you do well the first year, then you get an option for a second year and you keep moving forward,” Glazier says.
It’s also important to know that government contracts will mandate a “wage requirement” that includes a certain hourly wage plus health and welfare benefits, so that needs to be built into the RFP. “Our drivers get paid about $5 more per hour for our government fixed route business, plus health insurance, two-weeks paid vacation and paid holidays. These are primo jobs that we can fill quickly,” Bouweiri says.
The upside of government contract work is a consistent stable revenue stream regardless of economic conditions and good profit margins as long as operators account for all of their costs and responsibilities outlined in the contract. The downside is that some operators think government work is easy money, Glazier says. “It’s not. Government contracts can quickly grow your business, and you can quickly lose it for not performing and be blackballed from other work.”
Know The Deal
Before deciding to enter the government market, veteran operators caution that you need to know what you are getting into. “It’s a bonafide contract with the government that you say you will meet the requirements no matter the cost,” Glazier says. Adds Bouweiri, “If gas prices go up, they don’t care. That’s on you, and you have to stick to your contract.”
Other advice includes:
• Backup vehicles should be on standby if needed.
• Capacity to manage electronic payments.
• Infrastructure and staff to service the contract.
• Provide wage, health and welfare benefits.
• Be prepared to be audited.