Seminar Notes: Mythbusting Government Procurement

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How much does the government buy?

  • The Government of Canada is one of the largest buyers of goods and services in Canada.
  • Each year, the Government of Canada spends billions of dollars by awarding hundreds of thousands of contracts and making well over a million direct credit card purchases. This represents a huge potential market.
  • The government spent approximately $23B on goods, services, construction and maintenance projects annually from 2017 to 2020.
  • The government awards over 500K contracts and processes close to 2M credit card transactions each year.

Myth: The government doesn’t buy from smaller businesses

  • The majority of contracts awarded by the Government of Canada are valued under $25,000
  • Almost all credit card purchases, which are direct purchases from vendors, are valued under $10,000
  • Direct purchases from vendors valued under $10k = over $700 million
  • Smaller Canadian companies are well positioned to take on these types of contracts and provide the Government of Canada with the majority of goods and services it needs every year.

Myth: I’m too small to sell to the government

  • In addition to doing business with large companies, Government of Canada buys from:
    • Solopreneurs
    • Small independent businesses
    • Established local businesses
    • Start-ups
    • Medium sized businesses (up to 499 employees)
  • The Government of Canada buys more goods and services from micro, small, and medium enterprises than it does from large companies.
  • Smaller companies vastly outnumber large corporations. Their competitive edge comes from offering a wider range of specialized products and services, and from being local and innovative.
  • The federal government has a number of innovation programs, like those offered by Innovative Solutions Canada, that allow start-ups to sell new products directly to the Government of Canada.

Myth: The Government doesn’t buy from businesses like mine

  • We believe in inclusive procurement:
    • All suppliers must have an equal chance at doing business with us.
  • Includes:
    • Green and clean tech;
    • Women-owned and women-led businesses;
    • Under-represented groups;
    • Indigenous peoples;
    • New Canadians;
    • Social enterprises.
  • The government has been working to make it easier for all kinds of suppliers to do business with the federal government, including those that have little to no experience with the process.
  • We are:
    • Making procurement processes easier, faster and more accessible, so they’re less burdensome for businesses.
    • Experimenting with pilot projects to increase opportunities for businesses run by groups that haven’t sold as much to government in the past, like businesses owned by women, visible minorities or persons with disabilities, and social enterprises.
    • Encouraging departments to find ways to increase the value of contracts awarded to Indigenous businesses.
    • Expanding opportunities for green goods and services by making environmentally friendly purchasing a focus.

Myth: The government doesn’t buy what I sell

  • The usual commodities
    • Technology
    • Military
    • Property
    • Professional services
  • And so much more
    • Catering services
    • Snow removal and landscaping
    • Dogs and dog grooming
    • Clothing
    • Shower curtains
  • It’s a very wide range, and there’s a need for the types of goods and services that smaller businesses sell.

Myth: Government procurement is difficult and time consuming

  • All procurement activities must be open, fair and transparent.
  • Federal laws and regulations as well as Treasury Board of Canada policies guide the Government of Canada’s procurement process.
  • Initiatives to make procurement more accessible:
    • E-procurement
    • E-bid submission
    • 15 day payment
    • Plain language
    • Reducing barriers to entry
  • Real progress has been made to improve your experience as a supplier, and to encourage you to participate.
  • The improvements so far include:
    • Being able to submit bids electronically for some contracts.
    • Getting paid faster. There’s an initiative to pay invoices within 15 days.
  • There are more improvements ahead to make it easier and faster for suppliers to do business with the Government of Canada. For example:
    • Contract paperwork is being simplified.
    • The government’s new electronic procurement solution will move federal procurement online.

Myth: Government procurement is centralized

  • The Government of Canada is not a single client.
  • The Government of Canada has hundreds of departments and agencies, and they operate all across the country. When you think of selling to the Government of Canada, you should think of it as hundreds of potential clients with different needs and in different geographic locations.
  • The RCMP, for example, has detachments all across the country, even in remote areas. They need a whole range of services, like janitorial services, landscaping, snow removal, etc.
  • Larger and more complex contracts are managed by Public Services and Procurement Canada (PSPC).
  • 100+ departments and agencies buy their own goods and services.

Competitive procurement

  • Procurement over $25,000 for goods and $40,000 for services awarded through the solicitation of bids and quotes from potential suppliers.
  • For the purchase of goods over $25,000 and $40,000 for some services, the government will issue a public notice. This is what is known as a tender notice. Tender notices are published on a centralized government hosted website,
  • The tender notice indicates how the government intends to buy the good or service.
  • This is a formal process designed to ensure open, fair, and transparent competition for government contracts. Basically, the government lays all of its cards on the table by publishing a document that clearly outlines:
    • Who has a requirement
    • What they require
    • Where and when the goods and/or services are to be delivered
    • How they intend to pick a winner
  • Anyone capable of delivering on the requirement and willing to take the time to prepare a bid has a fair shot at winning the contract.

Low-dollar value procurement

  • Contracts for below $25K for goods and below $40K for services are usually awarded using some kind of competitive process. But it’s a much less formal process, likely to be along the lines of requesting "3 quotes” rather than the "35-page tender notice document" approach.
  • For purchases under $10K, the process can be even less formal. Often it can be as simple as a telephone buy or an online purchase.
  • Non-competitive approaches can be used.
  • Goal: best value for Canadians while enhancing access, competition and fairness to businesses.
  • Suppliers may be identified through networks, research or federal supplier registration systems.
  • If you want to tap into this multi-billion dollar market, you need to be proactive and make sure buyers know where to find you, like having an online presence.

Figure out if selling to the government is right for you

  • Find out if the Government buys what you sell:
    • Search for your competitors
    • Search for goods and services that you sell
  • If you find those, the Government could be a potential client for you.

Procurement Assistance Canada

  • Supports smaller and diverse businesses in understanding the procurement process.
  • Provides advice and tips on how to sell to the Government.
  • Works to reduce barriers to ensure fairness in the process.
  • Offers free seminars to businesses interested in learning about the procurement process and how to sell goods and services to the Government of Canada.

Request assistance

If you need help understanding the federal procurement process or registering for a procurement business number,

Electronic procurement solution

The Government is moving federal procurement online. During this transition, you may be able to bid on some tender opportunities through the electronic procurement solution. Find out more.