Government Contracts: Accessing the Opportunities
Are you considering adding the government to your list of clients? Whether you manufacture paper clips or specialize in aerospace engineering, chances are there is a need for your services in the public sector.
If you haven't done work for the government before, you'll need to know how you can source government contracts, including work that may not go to tender.
Where to find opportunities
In order to secure a government client you may have to go through the process of responding to a posted request. You can find these opportunities on the Internet in a variety of places offering tendering services. Each of the provinces and major cities such as Toronto will run their own listings. Another possibility is organizations such as the Ontario Public Buyers Association.
The most common listing service is (MERX www.merx.com). MERX is a privately run service that lists both federal and provincial requests. You can preview the listings on MERX for free; full access requires a fee. Once the fee is paid you will be able to download the bid document from the site. It is important to read through each of these documents carefully before preparing your response.
"Whatever it says in the bid documents you've got to do. There's a set of rules that have to be followed and there's a set of documents that have to be addressed. That means that the vendors have to follow exactly what the documents ask them. If they don't follow the rules you get disqualified," says Michael Asner, a procurement consultant.
Once you have gone through the document you need to evaluate whether or not you can fulfill all of the requirements. If you are lacking in one area and you still want to go after the contract you will have to figure out how you can fill the gaps while meeting the criteria. This could mean partnering with another firm or bringing an expert onto your team.
The pro-active approach
You should also try to identify opportunities by marketing your business to a select number of targeted departments, just as you would in the private sector. This will allow you to find out about upcoming contracts before they are listed. Contracts Canada, a site set up to help you navigate the procurement process, has contact information for the material managers for departments throughout the country.
In some cases this effort can lead directly to a sale because departments are able to make purchases up to $5,000 without having to list a request with a tendering service. Listing your business in the Supplier Registration Information (SRI) service can present opportunities as well. The SRI allows federal government departments to go through the database to find a vendor.
Registering in this database can also give you the chance to participate in Telephone Buys (T-Buy). Under this process the department will contact three companies, including the one that they last did business with, and ask them to provide a bid over the phone. The vendor who can offer the lowest price and meet all of the requirements of the contract will win.
"Individual departments will do a lot of their own buying. Last year departments spent $3 to $5 billion on their own, compared to $8 to $10 billion that we bought for them," says Jim Todd, Manager of the Contracts Canada Information Centre with the Public Works and Government Services Canada.
Responding to a bid
For more lucrative projects you are likely going to be responding to one of the following: a Request for Quotation (RFQ), an Invitation to Tender (ITT), or a Request for Proposal (RFP). Each involves a competitive process that is open to firms that meet the stated requirements. Responses are evaluated and scored based on the requirements outlined in the original request.
"The process needs to withstand intense public scrutiny because we are spending tax dollars. A fair and open competition will open up more opportunities for more companies," says Todd.
If you are answering an RFQ, you will be supplying goods and services under $25,000. Like the telephone bid you will need to offer the best service for the lowest price. The difference is that you will be competing with more vendors.
An ITT is similar to an RFQ except that the contract is valued over $25,000. The contract is issued for easily assembled goods and has straightforward requirements. Like an RFQ the bid that offers to do the job for the lowest price while fulfilling the contract will win.
Answering an RFP can be more challenging and require more work than the other methods of selling to the government. Commonly issued for contracts over $25,000, the proposal is used when a contract cannot be awarded on price alone. For help on how to write an effective proposal read our article Winning Government Work.
Another term that you may run across is the Request for Standing Offer (RFSO). These requests are not considered to be a contract unless you are contacted by the buyer in which case you will set up the terms and conditions. Todd explains that an RFSO is not a guarantee to do business. You are offering your services on an as-needed basis.