Public versus private work: the honest trade-offs

Some contractors swear by public work. Others won't touch it. Both are usually right about their own business. Public contracts are a different kind of customer, with real advantages and real costs. Here's an honest list of both.

What's good about public work

Long terms

Service contracts often run two to five years. That's predictable revenue you can plan hiring and equipment around, and use to show a bank you're a good risk.

Payers that don't disappear

Cities, school districts and federal departments don't go bankrupt or vanish owing you three months of invoices. They pay on a process, but they pay. Federal policy sets a 30-day standard with interest if the government pays late.

You can find the work

Above set thresholds, public buyers must post their contracts openly. You don't need to know the right person to hear about them. Where BC tenders are posted lists the places.

Fair rules

Public buyers have to evaluate bids by published criteria and treat bidders equally, and the courts hold them to it. See Contract A. A small crew gets the same process as a large firm.

References that travel

A good record with one public buyer is persuasive to the next. Municipalities, school districts and health authorities all ask for public-sector references, and talk to each other.

What's hard about public work

Paperwork and compliance

Clearance letters, insurance certificates, safety programs, signed forms, addenda. One missing page can sink a bid. See nine ways good bids get thrown out.

Fixed prices for years

You may be held to year-one prices in year four, unless the contract allows adjustments. Price it carefully: how to price a multi-year contract.

Price competition

Open competition means more bidders, and many tenders go to the lowest compliant price. Margins can be thinner than on private work you get by referral.

Slower decisions and payment processes

Tenders take weeks to evaluate. Invoices go through approvals. Cash flow needs planning: see getting paid on public contracts.

Less flexibility

You can't renegotiate a public contract over coffee. Changes need paperwork, and scope is what the contract says.

So what's the right mix?

It depends on your trade and your goals, but a pattern works for many small crews:

• Public contracts for the base: steady, multi-year work that covers your fixed costs and keeps a core crew employed all year. See stacking seasonal contracts.
• Private work for margin and flexibility: commercial, strata, property management and residential clients where relationships and quality can earn a better price.

Starting with one or two public contracts close to home lets you learn the process without betting the business on it. CrewBid also lists requests from non-profits, housing providers and businesses that post their work with us, which sit somewhere between the two.

A question to ask yourself

Do you have, or can you build, the habits public work needs: reading documents carefully, keeping records, meeting deadlines to the minute? If yes, the steady work is well worth it. If not yet, start small, and use the bid or no-bid checklist to choose your first one.