Lots of new markets opening and increasing for government contractors
by Mary Scott Nabers, CEO of Strategic Partnerships, Inc.
Companies with products and services related to vehicles and fleet management should definitely take a look at current opportunities in the public sector.
Governmental entities responsible for large fleets should be of particular interest to these types of companies because there is a current trend toward outsourcing many aspects of fleet management. Only a few firms appear to have recognized this new marketplace, but if the trend continues, it is hard to believe that others will not see the opportunity and step up to compete for the business. The resulting contracts will be quite large.
Government agencies have no option other than to keep their fleets running. And that is a big and costly task requiring vast amounts of time and resources. Because of budget constraints, most public organizations are now receptive to serious discussions and internal consideration of new options. They need relief and they are looking for cost reductions, economies of scale, better maintenance and more sophisticated management of resources.
Public organizations find themselves hard-pressed to purchase new trucks, automobiles, buses and large equipment. Full-service leasing has become quite attractive. And now, many are looking at total outsourcing of fleet maintenance and operations.
School districts need buses that are safer, have tracking devices and are well-maintained. Transit authorities must move citizens with disabilities, students, workers and other residents throughout the day and night.
Law enforcement agencies require hundreds - often thousands - of vehicles on a daily basis. State agencies responsible for transportation and public safety are big purchasers of vehicles, automotive parts, repair services and equipment. Hundreds of millions can be easily spent annually in most states.
Many public entities also are being urged to use hybrid vehicles, which reduce fuel costs and emissions. Elected officials, supporting clean air and energy conservation, are championing vehicles that use alternative and clean fuels. With few funds to make such purchases, officials are searching for options. Hybrid vehicles are routinely offered by leasing companies and firms that specialize in outsourcing.
For the average taxpayer, fleet maintenance costs appear staggering. Most never stop to consider these types of costs. The current trend toward outsourcing opens up a particularly large marketplace for government contractors. It will be interesting to see how competitors begin to line up for market share in the coming months.
Mary Scott Nabers is president and CEO of Strategic Partnerships, Inc., a 15-year-old procurement consulting and procurement research firm headquartered in Austin, Texas.
