While it's generally not the norm - I've seen various tactics over the years when a public or quasi-public agency (think state or federally funded, but not managed) simply wants the lowest rate, and so I thought to compile them here.
Let's start it off with a list of the most memorable:
- Stating that the number of videos desired is technically four, though a deeper dive reveals they actually expect 4 English videos and 4 in Spanish with different b-roll, culturally-relevant scripts, and different talent. The number of files/deliverables totals 8 in this case.
- Going in depth about the expected nature of the agency-vendor relationship, how a public agency uses tax dollars to fund most projects, and the like. This excessive prefacing when introducing a scope of work is odd, and maybe agencies use this language in lieu of a Best-and-Final-Offer (BAFO) phase to save time. There must be a sour taste somewhere - on both sides - as a consequence.
- Fragrantly adding in columns for discounts, payment term discount percentages, etc.
- When agencies refuse yearly escalations or increases for long-term projects 3-5 years in duration. When increases to adjust for inflation or cost of goods sold (COGS) are automatically denied, the agency issuing the refusal receives a 9-15% discount right off the bat.
- Turning the procurement into an Invitation to Bid (ITB) or Invitation for Quote (IFQ) used to the best measure for price-related evaluations, but even RFQs are entering this territory. Bonus points if the invitation or solicitation explicitly denies supplemental material often used to justify higher rates. Without added verbiage, appendixes with samples, and lengthier team profiles, the firm submitting has to differentiate with price and this is often extremely frustrating.
- Public procurement teams thinking that the department using the service (the direct stakeholder) will have the know-how to conduct early production or execution phases to save time/money... I think this one is pretty self-evident.
- Rather than use public funds allocated for the respective product/service, the seasoned purchaser applies for a grant instead. The grant then has a super-departmental maximum that cannot be crossed without another re-application/extension. Because the person who applies for the grant generally gets to get the ask, and because they've likely won due to their cost-saving measures, this belongs on my list.
- They are loose with terms like sole proprietor and freelancer, or ones desiring a local market response only.
- Purchasers who break apart every deliverable to its essential component(s) are trying to mitigate the complexity that is usually solved with a higher rate. This is fixed by honestly saying "This is more complex."
There are probably dozens more... But this should help get the conversation started.
How to reverse this? Work with agencies who know the work involved behind the scenes.
