Philadelphia is the fifth-largest city in the U.S., with an estimated population of 1.6 million in 2014. Philadelphia is the top international study destination for higher education and is considered an educational and economic hub; it has the eighth largest school district in the United States, with 142,266 students attending 218 public schools and 86 charter schools.
Home to the seventh largest metropolitan economy in the U.S., sectors including Information Technology, manufacturing, oil refining, food processing, healthcare, biotechnology, tourism and financial services are all thriving in the city. As a result, Philadelphia provides countless opportunities for vendors to sell products and services to private companies and public agencies. The city has one of the largest healthcare education and research centers in the country, ensuring opportunities for suppliers that provide services in these areas.
Looking back, Philadelphia has always been a city of firsts: the first library, hospital, medical school, capitol and stock exchange were all founded here, as well as the United States Marine Corps. With its rich history of innovation, Philadelphia is positioned to remain an incubator of talent and ideas for decades to come.
Doing Business with Philadelphia
Vendors interested in doing business with the City of Philadelphia can fill out an application to be placed on the city’s bid announcement list. Once on the list, vendors will receive notices about posted bids, be able to retrieve bid documents and submit proposals.
To obtain the announcement list form, vendors should contact the city’s Procurement Public Information Unit to request an application packet or go the city’s website and download the form. Before submitting a proposal, however, all vendors must pre-qualify and fill out a vendor questionnaire.
(Source: Vendor’s Guide: How to do Business with the City of Philadelphia. Getting on the Bid List. Aug. 2013. Web. 26 Sep. 2016)
Philadelphia Bid Opportunities and Where to Find Them
The City of Philadelphia posts contract opportunities for all sorts of products and services, and the City’s procurement department is in charge of acquiring services, supplies, equipment and construction services.
Contracts valued at $32,000 or more are advertised in local newspapers and on the procurement website eContract Philly. Public works projects (including construction, repair, improvement, and related work) are also advertised in selected trade publications and posted with local construction trade organizations.
Any bids under the $32,000 threshold (but above $500) are processed as a “small order” purchase, for which a department can solicit products or services directly from vendors.
Rather than issue formal bids, the City department, commission or board will solicit for quotes; these quotes will first be presented to small businesses, MWBEs or disabled-owned businesses for bidding as required by law. If these vendors don’t provide a quote or can’t adequately complete the terms of the contract, the work will then be offered to larger vendors.
Along with formal bids and small order purchases, the City also solicits for concession bids where vendors have the opportunity to provide products and services on city property. Philadelphia also administers surplus property bids - equipment and supplies that are offered “as is” to the highest bidder.
For contracts to source services, supplies and equipment, there are two types of bids the City posts: Firm Limit bids and Requirement bids. Firm Limit contracts are one-time opportunities that involve a fixed quantity of a good or service that adheres to a prescribed delivery schedule.
Requirement bids are contracts for products and services that are needed over a specific period of time, usually a one year span.
For any bids that require a mandatory pre-bid meeting (also known as a site visit), interested vendors must attend the meeting in order to be eligible to submit a proposal on the bid.
(Source: Vendor’s Guide: How to do Business with the City of Philadelphia. Types of Bids. Aug. 2013. Web. 26 Sep. 2016)
Requirements of Working with the City
The City of Philadelphia takes procurement very seriously and works to ensure that the most qualified vendors receive contracts and complete the work as required. As an extra security measure to guarantee vendors are committed to contracts they bid on, the City requires vendors to submit what are known as bid security, performance security and performance bond guarantees.
The Bid Security guarantees the City that the company awarded the contract will hold true to the price and terms and conditions agreed to in the contract, or are held liable for any loss the City suffers as a result of cost overruns or other problems.
For contracts valued at $32,000 or more (up to $500,000) vendors must provide a bid security. They can do this either by enrolling in the city’s Master Bid Security Program (MBSP) or submit a certified check, treasurer’s check, cashier’s check, bank money order or U.S. Postal money order. The MBSP doesn’t apply to contracts over $500,000 or for demolition services; in these cases, vendors must submit a certified check or bond with their proposal. Vendors that win public works contracts must also submit a bid bond; this amount must be ten percent of the gross amount of the bid.
For contracts under $500,000, the winning vendor must obtain a performance security. Performance security depends on the dollar amount of the contract and is obtained through participation in the city’s Master Performance Security Program.
The winning vendor must pay a fee for the purchase of a performance security. Details about how to pay and the amount of the fee will be addressed in the award letter, and the fee must be paid within ten days of receipt of the letter or the vendor could lose the award. The fee is non-refundable and if a contract contains an option to renew, vendors may be required to pay a fee for each renewal year.
The winning vendor must also post a performance bond for contracts over $500,000, the details of which, along with the performance bond form, will be included with the award letter. The vendor must have a City-approved bonding company execute the forms and have the documents and fee returned within ten days after receipt of the letter and forms. The performance bond also requires a renewal fee.
For public works projects, the winning vendor must post, along with the performance bond, a labor and materialsmen’s bond equivalent to one hundred percent of the contract amount. Again, these forms are included with the award letter and must be completed by an approved security company and submitted within ten days of receipt. Public works vendors are also required to submit a bid bond in the amount of ten percent of the gross amount of the bid.
All bids over $32,000 also require a bid processing fee based on the total bid amount, which can be submitted either by check or money order.
(Source: Vendor’s Guide: How to do Business with the City of Philadelphia. Services, Supplies and Equipment Bids. Aug. 2013. Web. 26 Sep. 2016)
Pre-Qualifying for Interested Bidders
Vendors submitting bids for public works projects must be pre-qualified before they can bid. Vendors must complete and submit the Questionnaire and Financial Statement for Qualifying Bidders on each project they plan to submit a proposal to. These questionnaires are typically required to be submitted fourteen days prior to the bid opening.
(Source: Vendor’s Guide: How to do Business with the City of Philadelphia. Public Works Purchases. Aug. 2013. Web. 26 Sep. 2016)
Local Business Preference
When awarding contracts, the City of Philadelphia gives preference to local businesses. This is beneficial to both the vendor and the City as it provides work to businesses in the area and contributes to the local economy.
During the bid evaluation process, the agency may be able to reduce the bid price of a certified Local Business Entity (LBE) by a pre-determined percentage to allow the agency to select the LBE vendor as the lowest bidder. The pre-determined percentage is usually ten percent (for bids of $1 million or less), while for all other bids the pre-determined percentage is five percent.
Importantly, if a vendor is awarded the contract based on these criteria, the vendor will get the actual amount they submitted on the bid proposal, not the reduced price. Keep in mind that not all bids will be awarded based on LBE preferences.
Requirements to be Certified as an LBE
A vendor must submit an application for the Local Business Entity Certification and meet the following criteria:
During the preceding twelve months the company must have submitted to the City of Philadelphia their Business Income and Receipts Tax return as proof that the company conducted business within the City.
During the preceding eighteen months the company must have:
- Maintained a valid Commercial Activity License as well as any other licenses and permits required by the City to conduct business
- Continuously occupied an office within the City
The company must also meet at least one of the following criteria:
- More than half or more than 50 of the company’s full time employees must work at least sixty percent of the time in the City
- The company’s principal place of business is within the City
(If the company’s principal place of business is not in Philadelphia the company will be asked to submit addresses for both the principal place of business and the city location; they will also be required to submit employment and other data to establish qualifications and may be subject to a site visit.)
Vendors who are certified as an LBE will be required to submit a Continuing Eligibility Affidavit on an annual basis. The certification is valid for five years and the company must maintain their certification throughout the contract term if awarded a contract.
(Source: Procurement: City of Philadelphia. Local Business Preference. Phila.gov. n.d. web. 26 Sep. 2016)
After the Bid Opening Vendors that win a contract will receive a Purchase Order with the details of the products being purchased. For vendors who were disqualified from the bid due to submitting a proposal after the bid opening date or time, or because the department deemed the bidder unqualified for the specific bid, appeals to decisions can be submitted within 24 hours of receiving notice of disqualification.
Other Bid Opportunities
For vendors looking to do business with the City of Philadelphia there are a number of opportunities to choose from. Other departments that post bids for products and services that a vendor may consider are for the following:
- Philadelphia Gas Works Procurement Department
- Philadelphia Parking Authority Purchasing and Public Bid Department
- Philadelphia Housing Authority Contract and Procurement Department
- School District of Philadelphia Office of Procurement
- Redevelopment Authority City of Philadelphia Office of the Executive Director
Take advantage of all that the City of Philadelphia has to offer. Make sure to get your business registered with the City or certified as a local business entity which can improve your chances at winning a contract. Whether or not you want to do business with the City, have your business placed on their bidders list, that way you will receive notices about contracts that are open for bidding. You never know when the perfect opportunity will fall into your lap!
Danielle Calamaras | BidNet.com