Doing business with government

The biggest consumers of business products and services by far are government departments.  In the best of times, their spending forms a crucial portion of our economic activity.  Now, as Australia’s economy slows, government purchasing is becoming more significant, as stage and federal governments spend to stimulate the economy overall.

Despite the importance of government spending, however, many businesses lack an understanding of government buying processes.  Educating yourself and your business on the nature of government purchasing has the potential to improve your bidding success.

Get your “ducks in a row”

Some basic housekeeping is required to win government work.  Some of the things that you may need to organise before considering government work include:

  • Ensure you are adequately insured.
  • Get your business listed on any required procurement panels or prequalification lists.
  • Ensure you have all of the required certifications.

This information is typically available publicly or by request.

Understand the buying organisation

For all but the smallest transactions, government purchasing is rarely done by individuals.  It is typically done by a buying team.  These roles may include:

  • end users
  • technical experts
  • managers
  • external consultants
  • procurement specialists
  • legal
  • environmental and regulatory compliance
  • stakeholders (internal and external).

The better that you can understand this buying organisation, the better you will understand how their decisions will be made, and therefore tailor your offering to these criteria.  Often these criteria are listed in an “evaluation matrix”.  If this is provided ensure you follow it closely – the decision-making team may be unable to choose a provider that does not fit within these criteria.

Government buyers are in the most part risk-averse.  If your offering falls outside of the conventional there is a high chance that you will be penalised for this in the evaluation, even if you are offering a superior solution.  Unless you have had the opportunity to influence the buying decision (eg, by educating your government customer) prior to the procurement process, you will usually be wise to provide a more conservative offering.

Another area where I see businesses come unstuck is in offering too much.  If the benefit that you are offering is not included in the evaluation matrix, it won’t be evaluated.  The result is a higher cost to service them for no extra benefit to your business.  This will put you at a significant disadvantage to other bidders.  Stick to the scope that you are asked to provide – you may be able to negotiate a change in scope after award of your contract.

Building relationships

While government purchasing can be very rigid, there is an opportunity to influence the criteria that you are evaluated on.  Prior to issuing a request for proposal, you can be educating your client so that they can see the benefit in what you are offering.  Your motivation in this should be helping your government customer to get the best possible value – not an unfair advantage over your competitors.  As you build trust, your ability to influence this process will grow.

After the bid

Whether you win or lose the work, there is an opportunity for you to improve. Typically, you will have the right to a debrief on your bid to understand where you were weak, or what helped you succeed.

Bidding for government work can seem like a painful and bureaucratic process.  However, if you invest the time to understand their decision-making process, it can become an important part of your business success.

James Baker, Director, Ars Imperatoria Consulting

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