Military Special Report: Securing a Slice of the Government Pie

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special report financing government military sales

Shannon and Scott Tracy, owners of UV Country Kawasaki in Houston, earlier this year won a contract worth up to $28.4 million to supply the military with up to 1,625 Teryx side-by-sides during the next five years.

The U.S. Special Operations Command (SOCOM) had been searching for a vehicle with a side-by-side seat configuration to augment the existing saddle-seat configuration ATV already used by special ops forces. They ultimately decided on the Teryx. After placing a bid for the Teryx order, UV Country got the contract.

Shannon, a Navy veteran, became a Kawasaki dealer in 2002 and, by applying with the General Services Administration, became a government contractor in 2005. The dealer has fulfilled several smaller federal and state contracts, but the SOCOM deal is the largest by far, she says.

So what goes into becoming a government contractor? "It takes a lot of time and a lot of effort," Shannon says. "You spend a lot of time on the quotes, and because there is a bid process that you have to go through, sometimes you get the government purchase order and sometimes you don't get it."

She says there are some drawbacks to government contracting. "Dealers need to understand that it's highly competitive. All of us dealers are still competing against each other, and it's sometimes really frustrating because there are dealers who'll mark the product down so low that, to beat them, it is hard to make any profit on the bid," she says. "We're not in business to give things away for free, so that's the part that is kind of frustrating sometimes."

Kawasaki offers two programs that assist dealers in selling to the government. The Government Sales Assistance program helps support dealer sales of motorcycles, ATVs, Jet Skis, Mules, and Teryx vehicles directly to qualified government agencies. The Fleet Sales Program allows dealers to provide discounts on Mules and Teryx vehicles when they're sold to customers purchasing multiple vehicles at one time.

Kawasaki's John Griffin helps Kawasaki dealers research and manage government and fleet sales opportunities. At the OEM's dealer meeting last year, he offered a seminar covering government sales. Griffin worked closely with the Tracys to land the SOCOM contract.

"Kawasaki has a few hundred dealers that participate in the government sales program each year," Griffin says. "In the past, a few dealers complained that government sales were not worth the effort. Today, most dealers jump on every sales opportunity."

Griffin suggests that retailers interested in government sales should research each opportunity and see if it makes sense, taking into consideration whether they're located near a military base, government agency or large fleet center. Dealers should also assess whether or not they have the staff to support the added paperwork and service calls, he says. And, with all good opportunities: Can they offer something other dealers can't?

Yamaha also offers a program to assist dealers in fulfilling government contracts. Government agencies that purchase through dealerships are eligible for receiving discounts, says Yamaha spokesman Van Holmes. "For example, Dick Davis, owner of Extreme Sports Yamaha in Sumter, S.C., has sold more than 100 Rhinos to the Air Force through the program," he notes.

Extreme Sports sales manager Ryan Haddock initiated the Air force contract after securing the dealership's status as a government contractor. "Shaw Air Force base is right down the street from us, and a few of the guys [who] purchase items for personal use from our store also happen to be into purchasing for the Air Force. So the logistics of it worked out very well," Haddock says.

While Haddock says most dealers he knows involved in government contracting are in close proximity to a military installation, it's not a necessity. "You really just have to have the competitive bid," he says. "Fortunately, the Yamaha government order program offers a bit of a discount on the units ordered because they know that in a government sale you're going to have to discount the units to have that competitive bid."