Local Government Procurement: An Insider View | Podcast

Most vendors trying to sell into local government focus on the wrong things. They blast cold emails to city administrators. They pitch products without knowing anything about the city. They find out about an RFP when it drops and wonder why their win rate is in the single digits.

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On Episode 8 of In Pursuit, host Mike Bitchick sits down with Milton DeHoney, City Administrator of Ann Arbor, Michigan. Milton has spent 40 years in city administration across Louisville, Lexington, Cincinnati, Phoenix, and now Ann Arbor. He has seen local government procurement from every angle, and he is refreshingly direct about what works, what does not, and what vendors consistently get wrong.

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Watch the full episode here.

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How Local Government Is Actually Structured

Before getting into procurement, Milton walks through the legal framework that governs everything a city does. Understanding this structure is essential for any vendor trying to navigate local government procurement intelligently.

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At the top is the city charter, the constitutional foundation of local government. It defines the structure of government, who has authority over what, and the term of council participation. Nothing can override it.

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Below the charter are ordinances, which are laws passed by city council. Below ordinances are resolutions, which represent the stated preferences of city council but do not carry the weight of law. And below those are administrative regulations, internal policies that the city administrator signs off on to guide day-to-day operations.

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"The charter is the constitution. For those who will be so inclined, the charter is the Bible. It's the guiding foundation. Ordinances are laws that are passed by the city council. They can never usurp the charter. Resolutions are in effect a stated preference of the governing body."

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For vendors, this framework matters for one practical reason: the rules that govern procurement, including bidding thresholds, evaluation criteria, and approval requirements, exist somewhere in this hierarchy. In Ann Arbor, procurement policy is set by city council. In other cities, it may be in an ordinance or embedded in city policy. Knowing where to look, and what can be changed versus what cannot, is the first step to understanding the system you are selling into.

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How a Purchase Actually Gets Made

Milton walks through what an ideal technology procurement looks like end to end, and the picture is more layered than most vendors expect.

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It starts with a need identified within a department. The department does its homework, figures out what kind of solution might address the need, and brings in IT to validate that the solution makes sense technically and that an existing system does not already cover it. Finance then confirms that the budget is there, not just for the acquisition but for the ongoing operating costs, licensing fees, and staffing implications.

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Only after those conversations have happened does procurement get involved.

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"You wouldn't necessarily bring in procurement until and unless IT has blessed it and finance has confirmed that you actually have the money to do it. If you haven't done those two things, going to procurement is premature."

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Once procurement is engaged, they run the RFP process, coordinate with the department on scope, and manage evaluation. In Ann Arbor, the scope of what is needed has to come from the user department, not procurement. Procurement does not write what the product needs to do. The people who will use it do.

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For vendors, the implication is clear: the department is the starting point, not the city administrator and not procurement. Get to know the people who have the problem you are solving.

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The Budget Reality Vendors Need to Understand

One of the most practical sections of the conversation covers how budget works in local government, and what it means for vendors trying to close a deal.

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A purchase either has budget allocated for it in the current fiscal year or it does not. If it does not, there are essentially three paths: the department reallocates from elsewhere in its own budget, the city goes to council mid-year to appropriate additional funds from the general fund, or the purchase waits until the next budget cycle. In Milton's five years in Ann Arbor, mid-year council appropriations have happened fewer than ten times.

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"Most of the time I'm going to say no, it's not urgent. It's important, but it's not urgent. It can wait until the next budget cycle."

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Grants are a fourth path and one that Ann Arbor pursues aggressively. But Milton is careful about grants that fund positions rather than tangible items. When grant funding for a position runs out, the city either absorbs the cost or separates the employee. Every grant-funded hire knows this going in.

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For vendors, the takeaway is straightforward: understand the budget cycle of the entity you are selling to. If the money is not there this year, pushing harder will not change that. But getting on the radar early enough to be in next year's budget conversation can change everything.

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What Vendors Get Wrong About Local Government Procurement

This is the part of the conversation that every vendor should hear. Milton is candid, specific, and not unkind about it.

The first mistake is going straight to the city administrator. Milton receives dozens of emails a day from vendors trying to get 15 or 30 minutes on his calendar. Almost none of them get a response, not because he is dismissive, but because it is genuinely not a good use of either party's time. He does not have deep knowledge of every department's needs, and he is not going to shop a vendor's email around the organization on their behalf.

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"One of the biggest mistakes that vendors make is they think they have to start the conversation with me personally. They're trying to get 15 or 30 minutes on my calendar. It's not going to happen."

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The exception is when a vendor's product has city-wide application, or when city council has publicly expressed a priority that the vendor's solution directly addresses. In those cases, a well-researched email to the city administrator can make sense. But the key word is well-researched.

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The second mistake is sending generic outreach that shows no evidence of having looked at the city at all. Milton regularly receives emails from vendors trying to sell shipping and logistics services to Ann Arbor, a landlocked college city with no port operations. Those emails go straight to delete.

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"Only about 10 of them will have something contained in the message that shows me they've actually looked at who Ann Arbor is and what we do. Sometimes they will put, we listened to a council meeting, or we read a document, or we know that program X is going to happen. Now you're getting specific. And that's going to at least hold my attention."

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Relevance is the price of admission. If a vendor cannot demonstrate that they understand what the city is trying to accomplish, they have already lost.

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The Right Way to Engage Before an RFP

Milton is clear that there is no such thing as a predetermined bid in his world. Procurement processes are public, competitive, and legally required to be fair. But that does not mean vendors cannot build relationships and credibility before an RFP drops.

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The right approach is to engage with the department that has the need, not the procurement office or the city administrator. Attend public events where relevant departments have a presence. If the sustainability office hosts a green fair and your product is relevant, have a booth. Read council meeting minutes. Watch recorded meetings. Understand what the city's stated priorities are and map your outreach to them.

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"There are times when vendors send people and they try to get five minutes on the street or in the park. That's fine. Sometimes, for example, our sustainability office does a green fair every year. You may want to look into having a booth at the green fair if that's relevant to you."

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Once an RFP is released, the rules change. No side conversations, no informal meetings, no attempts to influence the process outside of the prescribed channels. The RFP issuance is the cutoff. Everything before that is relationship building. Everything after that is the process.

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Cooperative Contracts and When Ann Arbor Uses Them

Like most local government entities, Ann Arbor uses cooperative contracts when it makes sense. Milton's approach is pragmatic rather than prescriptive.

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If a co-op contract covers what the city needs, the vendor has been vetted through a legitimate competitive process, and using the co-op gets the city to the outcome faster or at better value, it is worth considering. Supply chain realities have made this more relevant in recent years. Milton notes that a fire truck ordered today might not arrive until 2030. If a co-op arrangement can shorten that timeline, it becomes a real factor in the decision.

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"We will piggyback where it's in our best interest or where it makes the most sense. We look at state contracts, we look at other opportunities to purchase because the vendor and the product have been vetted already. So if we can get it faster, we may go that route."

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The evaluation still happens. Scope, performance, and price are all examined relative to the city's specific need. A co-op contract is not a free pass, but it is a legitimate and increasingly common path into local government procurement for vendors who have done the work to get on those vehicles.

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The University of Michigan Relationship

Ann Arbor's relationship with the University of Michigan comes up in the conversation, and Milton describes it in terms that are both honest and constructive.

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The university and the city intersect constantly: public safety, transportation, sewer infrastructure, sustainability, housing development. Milton coordinates at the VP and CFO level with university counterparts, and department heads talk to their equivalents on the university side regularly.

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In recent years, the university has begun funding city projects it wants to see happen but that the city cannot currently afford. The Quiet Zone project near the new university dorms is one example, a roughly $15 million investment by the university to reduce train horn noise in the area, coordinated with but not funded by the city.

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"The university has provided significant funding for us to do things. Sometimes projects that we can't afford to do right now but we need, they have chosen to fund."

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The relationship is not without tension, but Milton describes it as genuinely collaborative. For vendors operating in Ann Arbor, understanding that the university and the city are distinct entities with overlapping interests, but separate procurement processes, is important context.

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What Milton Wishes Every Vendor Knew

The clearest advice Milton offers to vendors trying to get into local government procurement comes down to three things.

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First, do your homework. Read the budget documents. Watch council meetings. Understand what programs are being discussed, what priorities council has expressed, and what challenges the specific department you are targeting is dealing with. If you cannot demonstrate that you have done this, you will not get past the delete key.

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Second, go to the right person. Start with the department that has the need. Build a relationship with the people who will actually use your product. Do not waste the city administrator's time unless your product has city-wide application or you are directly responding to a publicly stated council priority.

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Third, be patient with the process. Local government procurement is formulaic by design. There are legal requirements, approval layers, and timelines that exist for good reasons. Understanding and respecting that process is not just good practice. It is the only way to build the kind of long-term relationship that leads to winning government contracts consistently.

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"You're simply trying to get in a position where you can be competitive. There's nothing that we will do that should be interpreted as sending you a signal that if you bid, you're going to get the business. But at least understanding what your business is and what you can provide consistent with what we need, we're open to that."

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This post is based on Episode 8 of In Pursuit, featuring Milton DeHoney, City Administrator of Ann Arbor, Michigan. Watch the full episode for more on city charters, ordinances, budget cycles, and how the city navigates its relationship with the University of Michigan. Milton is also the author of "It Always Begins with Leadership," available on Amazon.

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