Tips for Developing Inclusive Procurement Strategies

This guide is intended as a starting point to help you create procurement strategies that give small and medium enterprises (SMEs) fair and equal access to federal procurement opportunities. Developed by the Office of Small and Medium Enterprises (OSME), its goal is to reduce barriers – requirements that eliminate otherwise compliant bidders due to unnecessary technical or supplier requirements – for SMEs interested in competing for federal procurement opportunities.

Why is it important for SMEs to have fair access to bid on government procurement opportunities?

The Government of Canada relies on smaller suppliers because they provide value in the supply chain and often operate in niche markets where larger businesses are absent. Smaller businesses are already significant suppliers of goods and services, historically accounting for over one-third of the value of government purchases and well over 60 percent of government contracts awarded.

Ensuring that SMEs do not face unnecessary barriers when bidding on federal procurement opportunities increases competition by expanding the pool of eligible suppliers. This, in turn, helps achieve the best value for the goods and services the government purchases. Supporting the competitiveness of SMEs also affects the well-being of Canadian society and the economy by stimulating job creation, economic growth and innovation. By implementing small changes in the way requirements are defined and procured, procurement professionals can be instrumental in improving access for smaller suppliers, thereby increasing the fairness and transparency of day-to-day government business.

What are you asking me to do?

As procurement specialists, you will already be considering the large majority of these suggestions every time you draft a solicitation document. But by reflecting on these guidelines and implementing just small changes whenever possible, you could be instrumental in improving access for some SMEs. Please take a moment to review the tips.

What is OSME's role in procurement renewal?

OSME, an arm of Public Works and Government Services Canada, was created to reduce barriers and simplify the requirements for suppliers looking to do business with the government, while at the same time, striving to achieve the procurement objectives of the Crown. We reach out to companies across the country through our six regional offices to acquaint them with government procurement opportunities, help them navigate their way through the federal procurement system, and learn from the challenges they face.

What are the "10 Tips" ?

The 10 Tips represent a starting point for procurement professionals tasked with drafting all types of solicitation documents. Each point focuses on an aspect of the procurement process where barriers to SME participation are commonly found. Barriers are viewed as requirements that result in the elimination of otherwise compliant bidders due to technical or supplier attributes rather than business factors.

These simple suggestions can have a big impact on the competitiveness of smaller or regional suppliers simply by making the procurement process both more accessible and more manageable.

The following guidelines are provided to help you create inclusive procurement strategies that promote small and medium enterprises' (SMEs) involvement. The specific requirements of a procurement strategy may preclude the suggestions below. Procurement professionals must, as always, use their discretion when deciding on an approach that would hold up to public scrutiny.

Whenever possible:

1. Seek SME feedback

During the course of regular industry consultation throughout the year, ensure that smaller suppliers are given the opportunity to participate. Valuable input often includes feedback on the capabilities and innovations of the marketplace that can help make proposed procurement plans more realistic and result in strategies that are easier for all parties to apply.

2. Research available procurement tools

Determine whether there is already a competitively-established, consolidated procurement instrument in place to allow contracts and call-ups to be awarded to prequalified SMEs where appropriate.

3. Tailor solicitation requirements

Divide large categories into component streams to allow wider competition and to provide an alternative to joint ventures or subcontracting for niche suppliers. For commodities where SMEs may provide price quotes for services or delivery on behalf of the prime supplier, ensure that the procurement strategy includes a clause to identify these value-added resellers, rather than leaving their selection to chance or arbitrary preference.

4. Use plain language templates

Focus on writing concise documents that avoid repetition and use plain, easy-to-understand language. Documents that are self-contained with a limited number of attachments and reference materials are easier for smaller suppliers to respond to.
For more information on plain language templates and guidance on organizing documents, please see the PWGSC Supply Manual, Chapter 4: Section 4.15.1 Departmental Standard Procurement Templates.

5. Remove unnecessary restrictions

Assess suppliers based on their ability to complete work rather than on restrictive business criteria such as size or revenue. Requirements such as years of experience, distribution chain specifications, national coverage, licensing and personnel certifications should be based on the needs of the contract so as not to arbitrarily eliminate smaller suppliers.

6. Avoid overly-restrictive product and service criteria

In order to allow innovative suppliers to compete, develop specifications based on functional requirements rather than brand or technical attributes. Achievable environmental and standards certifications are those that reflect true industry benchmarks as well as the actual requirements of the product or service.

7. Be sensitive to financing issues

Include established payment policies and ensure that clauses such as credit card opt out are present in order to avoid putting smaller suppliers in the position of having to carry costs over an extended period of time.

8. Reflect on the evaluation methodology

Establish evaluation methods that balance price, experience and efficiency to achieve best value. Consider all options before using a basis of selection that may be unfair to smaller or regional suppliers, such as requesting the inclusion of taxes in bid pricing. Where applicable, consider predefining a range within which bids will be determined compliant, rather than aiming to qualify an arbitrary number of winning suppliers.

9. Highlight potential hidden costs

Clarify the actual insurance, liability, regulatory and security requirements necessary to mitigate the risks the contract may present so as to avoid burdening smaller suppliers with the excess costs and paperwork of overly stringent requirements.

10. Lower contract administration requirements

Ensure that administration and reporting requirements do not present undue costs for smaller suppliers with limited resources. Payment cycles and price refreshes, where applicable, should be established fairly, at intervals that minimize carrying costs.

Submit your comments

Should you have any ideas on how to improve this document, we would love to hear from you. Please send your comments or suggestions to bpme-osme@tpsgc-pwgsc.gc.ca.

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For more information

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