Preparing to sell to the government
Selling to the government can be a profitable step for many businesses.
Make an informed choice
When seeking to enter the government market, and indeed all types of markets, you should do your homework and be well-prepared. To win a contract, you must understand your target market. In some provinces, government organizations may include government boards, councils, committees, commissions and publicly-funded academic, health and social service organizations.
Assess your business
You must carefully assess your business' resources and your strategic and competitive positioning. Ask yourself what your production capacity is, what your position vis-à-vis the competition is, and what your short-, mid- and long-term plans are. Take a good look at your human, physical and technical resources. Evaluate your research and development activities. Analyze your supply and production capabilities in terms of distribution, delivery and after-sales service. The answers to these questions will help you determine if you can tackle public markets and fulfill government contracts.
Study various procurement routes
It can be demanding to fully understand government procurement and to properly target potential niches. In large cities like Montreal, Toronto and Vancouver, there are several hundred public organizations that function differently for their procurement. Learn to recognize the different approaches to procurement and decide whether or not to participate in them. Types of procurement approaches include direct procurement, the use of supplier files, grouping of purchases, publicly advertised tender calls or limited tendering, and standing offers.
The plan of attack for government contracts varies from one business to the next: some companies will concentrate their efforts on accessing and searching national publicly advertised tender calls; others will initially approach government contracts via the local procurement route (below a certain dollar value and via registration in vendor files). Others will monitor government procurement for strategic purposes only, that is, without seeking to win contracts, but simply to identify and keep track of the competition.
Get help to monitor opportunities
Depending on your situation, you could assign someone in your business to monitor these business opportunities with government or you could hire an outside market intelligence service. The upside to hiring an intelligence service is that they can often provide help in a number of areas. They could help you:
- Understand the regulations surrounding government contracts
- Find information on government purchasing requirements
- Find information relating to trade treaties and agreements
- Deal with the purchasing body
- Develop personalized strategic tools
- Settle contract disputes
- Get training on advanced subjects relating to government procurement
Find business opportunities
When a government body needs goods or services valued over a certain dollar amount, the body (purchaser) must publicly advertise a request for proposals. You can find these advertisements on electronic bulletin boards such as Buyandsell.gc.ca, MERX or SEAO (in Quebec). Other places to look for such advertisements are on the websites of the procuring body and in specialized and general newspapers.
For procurement activities of an estimated value below a certain dollar amount, practices may vary from one government body to the next. Many organizations keep a list of possible suppliers (vendor files) whom they contact for either bids or sole-source services that are of low dollar value. You will have to contact the organization directly to make your business known to the government purchasing agent or register as a supplier in specialized databases.
Here are some additional sources of information that will give you a good start on understanding and searching for business opportunities with governments.