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A municipal contract can carry big rewards. Perhaps the most obvious is the high dollar value of the contract. Also, when residential work is slow in the winter months, municipal work continues apace -- especially pruning, which can be lucrative. Every great thing has its price. So what’s the catch with the municipal market?

Moving into the Municipal Market

By Michelle Sutton


A municipal contract can carry big rewards. Perhaps the most obvious is the high dollar value of the contract. Also, when residential work is slow in the winter months, municipal work continues apace — especially pruning, which can be lucrative.


“More winter work means more secure employment for our best employees and helps us retain them,” said Rick Hannah, manager of the Davey Tree branch in Cincinnati. “While residential customers are more driven by aesthetics, municipalities are more driven by safety and liability — and they’re thinking about that all year long.”


Municipal work is also great marketing for your residential side. “When your trucks are parked on neighborhood streets, it’s free advertising, and we find that residential referrals follow,” said Dan McCarthy, local manager at Bartlett Tree Experts in Columbus, Ohio. “Residents rightly think, ‘If the city trusts this company, I can too.’” McCarthy cites another advantage, that “the city always pays you; you don’t have to chase down your money.”


Every great thing has its price. What’s the catch with the municipal market?


 


Doing the bidding


Perhaps the most difficult thing about working for a municipality is the bidding process, which varies from city to city in its rigor but can be intimidating, particularly for new contractors. Milwaukee Forestry Services Manager David Sivyer said, “New contractors have to contend with submittal documents and comply with special provisions they would never encounter in the private sector.”


For example, Sivyer explained that municipalities may require documents such as bid, payment, and performance bonds equivalent to the value of the contract. These bonds protect the city from contractor default or from claims filed against the city for contractor nonpayment of contractor employees or contractor vendors.


“Contract surety is a cost that contractors will need to factor into their bid price,” Sivyer said. “Furthermore, the number and value of bonds held by contractors may influence their ability to obtain financing for additional work, similar to impacts that revolving or available credit would have on individual credit scores for consumers seeking additional credit.” 


Additionally, Sivyer pointed out that contractors may be required to submit regular reports that document how the contractor meets the city’s requirements for small business participation, workforce development for the un- and underemployed, residency requirements that help sustain local jobs, and the like. Then there are the regular progress reports to be filed based on contract specs.


Details matter right from the start. Sivyer advises, “Contractors should pay strict attention to contract bid submission details to ensure that bid documents are complete, accurate, and timely to ensure the bid is not rejected as ‘non-responsive’ due to submission error. Some contracts require bids be submitted electronically, in multiple copies, notarized, etc.” Remember that you can call the city forester and ask questions when you are working up your first bid.


Contracts are binding documents and contractors can expect to be held to all contract performance standards. Sivyer said, “These are not handshake agreements, and new contractors would be wise to enter the municipal contract market slowly and carefully.”


Although good relationships can and do develop between municipalities and contractors, it’s worth noting that the bidding process is, alas, never done. Contractors have to regularly re-bid. Said Hannah, “When a large percentage of your business is municipal work, there’s less frequent stress about getting work contracts, but there’s higher anxiety for a short while because the stakes are high. Year after year, you still have to prove your competitive worth and win the bid.”


Hannah characterized the municipal market as more competitive than the residential market. He said that on the residential side, the hiring process is more based on emotional factors and loyalty, while the municipal market takes emotion out of the equation. “The municipalities hire on quality, safety, and price,” he said. “They can like you, but if you don’t win the bid based on their criteria, no matter how much they like you, it won’t change the outcome.”


 


In the city forester’s boots


Bidding complexity can increase with the dollar amount of the contract. Steve Cothrel, superintendent of parks and forestry for Upper Arlington, Ohio, said, “I think the basic purchasing systems for municipalities are pretty universal but not necessarily well understood in the private sector.” Here are Cothrel’s parameters, as a typical example:

 For little tasks (like spray a tree for bagworms or treat it for EAB), most city foresters have some low-level purchasing authority. In Upper Arlington, Cothrel can spend up to $999.99 without any bidding required.
If he spends $1,000 up to $5,000, he must have three quotes from three different vendors. If he doesn’t use the contractor with the lowest quote, he has to justify his decision in writing.
If he needs to spend more than $5,000, say on tree planting, removal, or stump grinding, he has to submit specs/plans to the city’s finance department, and they solicit formal bids for the services. “We usually select the lowest bidder unless we have good reason to reject the lowest bid,” he said.
If the bids come in over $40,000, then only the city council can approve the contract. Cothrel said this typically happens only with his annual street tree pruning contract (and park construction projects). He has to write a staff report for council to explain why he wants to spend that much money and which bidder he believes is the lowest or best for the job.

 


So what does this mean for contractors who are entering the municipal waters for the first time, besides the knowledge that the cities seek the lowest-price qualified bidder? The city forester has the most discretion with small jobs. Provided you are qualified to do the work, that’s one way in the door: make a favorable impression starting with a small assignment. But how to get that first one?


 


Knock, knock


Let’s assume you have relevant tree care experience in the private sector, adequate liability insurance, and the appropriate pesticide certifications. Most city foresters are going to look for ISA Certified Arborists to do their planting, removals, and pruning (they tend to be less insistent for stump grinding). McCarthy also suggests that at least one member of your crew be a TCIA Certified Treecare Safety Professional (CTSP). “The municipalities are very safety-focused, and this is a way to demonstrate that commitment,” he said.


The ISA and TCIA designations are sometimes written into the bid as requirements. Shelley Vescio is city forester for Thunder Bay, Ontario, where many former loggers are starting their own tree care businesses. She wrote ISA certification into her municipal tree bylaw. After she vets newcomers for proper certifications, Vescio asks newcomers to do a safety demo for her.


Vescio has a great piece of advice: get involved in community forestry events in the city where you hope to work. “A young arborist volunteered for some EAB events we had on Saturdays,” she said. “This gave me a chance to get to know him — his skills and knowledge, but also his personality and how well he communicates.”


Vescio said communication skills are really key because sometimes the contract arborist has to soothe an agitated homeowner who does not understand the city forester’s decisions. “I find that the arborist, as an independent third party, can reassure and soothe and give the homeowner information that I tried to give but they couldn’t hear.” The arborist has to demonstrate to the city forester that he or she is diplomatic and has a high tolerance for these kinds of interactions.


Vescio said something echoed by city foresters everywhere: be prepared to respond quickly to municipal work requests. “I don’t expect arborists to neglect their private work,” she said, “but it can’t be, ‘We’ll be in there three weeks,’ either. Because of safety concerns, we have to be the priority for the arborist.” 


Be careful not to overreach with your first bids, both in terms of expertise and time. Cothrel has been burned with new bidders, especially in the arena of street tree planting. “We know about how many trees an efficient crew can plant in one day,” he said. “When a new bidder comes in at half the average unit price, their wildly exaggerated expectations are a red flag. We’ve had contractors quit after a day or two when they realize they are in way over their heads, leaving us to scramble for help getting our perishable trees into the ground.”


For this reason, Cothrel prefers to give newcomers small jobs to test them out. He also looks for companies that he knows through professional activities such as regional ISA events. “If a company leader seems to be educated and sincere, I’m happy to give them a try,” he said. He suggests that contractors new to municipal work start out bidding on stump grinding to prove their reliability before graduating to more skilled work such as pruning. 


 


Lastly, McCarthy suggests arranging a meeting with the city forester to introduce yourself to him or her. Bring recommendations from residential clients and proof of your good standing with the Better Business Bureau and review services such as Angie’s List.


 


Michelle Sutton (michellejudysutton.com) is a horticulturist, writer, and editor.

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