Posts Tagged ‘canada’

Securing Government Contracts

August 3rd, 2009 No comments

If you’re looking for clients who can pay you for your services, you really should consider dealing with the entity that you’re invariably doing business with every year, the Canadian Government (if you’re in Canada that is). After all, you do give them lots of money in taxes!

Canada’s governments account for 40% of every dollar produced in Canada. Yet many small businesses don’t even consider the public sector as a market for their goods and services, while in reality there is a strong chance that some of this business could easily flow their way. However, selling to the Government is a bit different from what we may be used to. You don’t have the usual set of end-users, influencers and decision makers that make up the bulk of your interactions with corporate and consumer clients that your firm normally deals with. Let me take this opportunity to demystify the procedure and launch you on your path to success in selling to the Government.

I’ll cover the following points:

  1. How do you find opportunities to bid for?
  2. How do you decide if this candidate opportunity is one that you’d like to bid for
  3. How do you win the business for your firm
  4. Some gotchas that you need to avoid

Opportunities are knocking every week
First read up Contracts Canada Business Primer. This site is an on-line primer that spells out the basic rules and answers many questions you’ll have. Then you may want to register once in order to be considered for government business. You can do this on-line at the Supplier Registration Information (SRI) and you’ll need either your business number or your GST number.

Once you’ve registered, you’re eligible to bid for contracts, congratulations!

Now mosey over to MERX, which is Canada’s official, public-sector electronic tendering service. ‘Tendering’ is a fancy word for reverse auctions, where people bid for the privilege of doing business with her majesty’s Government, and (normally) the lowest bid wins! MERX has a nice interface for finding opportunities, and as you’re already registered, you are eligible to download the full RFP (Request for Proposal) package for free (at least for Government opportunities).

Is this for real? Am I in the running?
The next step is to figure out if you can bid for the RFP. In most cases, you can, as there is no bar (usually) on who can bid for a project. The real question is, do you want to bid for this particular contract? Applying for a contract is a complex activity, where you need to gather together a lot of supporting information, and weave it together into a credible proposal that outlines a plan for fulfilling the service within a competitive rate. Fortunately, there is a simple checklist that you can follow:

  1. Is my company capable of offering this service?
  2. Only apply for those opportunities where you can complete the work you’ve committed to. The alternative is to be sued for breach of contract, which is not a pretty situation to be in.

  3. Does my company meet the evaluation criteria? (Typically section 4 of the RFP)
  4. Sometimes there are mandatory conditions such as security or HRDSC certifications, requirements for financial stability, or proof of having provided similar services in the past, which you need to supply. If you cannot meet the evaluation criteria yourself, you may want to consider finding a partner to apply for this contract with, or subcontracting. You don’t have to be Sun Tzu to realise that a weak ally speaks with the voice of the stronger ally! This principle works equally well in business as well as warfare. I speak more about this in the next section.

  5. Does my company accept the terms and conditions?
  6. Part 1 to 5 in the RFP describes how you can apply for this oppotunity, and how your bid is going to be evaluated. Part 6 contains the contract that you’ll have to agree to, and these are non-negotiable. You should only apply if you’re happy to sign on the dotted line; if you’re not, and you bid, all you can do is withdraw your bid before the contract is awarded!

  7. Is my company capable of winning the contract against the competition?
  8. MERX allows you to track the list of other companies that have downloaded the RFP. You can easily find out if you’re going mano-a-mano against Jo Bloe, or IBM.

  9. Does my company accept the payment and pricing method?
  10. The Government typically payes Net-30, which means 30 days after you’ve invoiced the Government or the delivery of services have been made (whichever is later). Some departments are notorious for paying a year later! This can kill your firm if you’ve got working capital issues.

Are you a winner?
Firstly, let’s cover the basics of the bid. There are three parties to the decision-making process.

  1. The end-users are the Government employees who requested this product or service. They are completely anonymous, and you only find out who they are once the contract is awarded to you. the only you can request information from them is via the procurement officer who will only contact them if he cannot answer the question herself. These guys provide the technical and managerial evaluation of your solution and your firm, and can only provide a pass/fail judgment (typically). They do not determine if the contract is awarded to you, but can kill your bid if they specify that your proposal does not fulfill their requirements. This evaluation is typically done by three individuals independently.
  2. the procurement officer (typically from from PWGSC) then carries out the financial evaluation, and usually assigns the project to the lowest bid unless they have a more complex evaluation methodology, which is always specified in the RFP.

Gotchas.. avoid these like the plague!
the following mistakes can kill your bid:

  • Being late to submit the bid. If the bid says 2:00pm on Friday, and you’re a minute late, tough tamales… you’re out of the running.
  • Forgetting to sign the document!. Imagine that, you spend a week getting the bid together, and forget to sign. ouch!
  • Not meeting the mandatory requirements. If the RFP requires some sort of certification, or that you provide 100% of the requested items, in a purple box with yellow polka dot pattern… well, you’d better cover all these mandatory requirements in your proposal, and ideally prove that you can provide them! If you are convinced that the requirements are unreasonable, be sure to inform the procurement office of that. Finding Ruby on Rails experts with 10 years experience is impossible, and procurement officers are not experts in all areas. They will be happy to amend the RFP, and provide an extension
  • Not submitting a single-sided paper bid!. If you submit an electronic bid, you’re trusting the procurement offices to print out your bid, and make copies etc. Well, if a page goes missing, who is to blame. Especially if this page deals with a mandatory requirement, which would effectively kill your chances at securing this contract?
  • Not separating the financial and technical aspects of this proposal (ideally in different binders, or via a cardboard separator). Remember, the end-users do not make decisions around the finances; all they do is decide if your proposal meets their requirements or no. Allowing them to view the financial info can influence their recommendations, which is why most RFPs require that the financial information is kept separate.
  • Sending the proposal to the wrong address! Confusingly, there are three different addresses on the front cover page of the RFP. The one you need to send your proposal to is marked clearly as ‘return bids to’.. but the history books are full of incidents where the bids were sent to either the procurement officer, or the service/goods destination.

If you win the bid congratulations! You’ve made your first successful step in doing business with the Government. If you’re not won, try again, there is lots of business to go around, and be sure to ask for a debrief (which is your right) to learn why you lost. Be polite when asking for the debrief, it always helps. If this has helped you, please be sure to comment below. If you need any further information, I’ll be happy to dig up the answers for you, just ask!

Angels in the Canadian Government

June 16th, 2009 2 comments

There just isn’t that much free money out there. In most instances, if you can find someone who wants to invest in your venture, you’re going to have to give up a healthy chunk of ownership in exchange; not a pretty deal if you truly believe that your venture will succeed.

The Canadian Government (bless them) has an excellent program for individuals like me who want to throw their sweat equity into the venture, and do not want to be drained emotionally by thoughts of missing rent/mortgage payments, and not being able to provide milk to your kids!

This gem of a programme is the HRDSC ‘self employment’ program. You can read more about it HRSDC site and the Canadian Small Business site.

There are a couple of very compelling aspects to this programme

  • You receive feedback from expert evaluators. This is the same process you would need to go through with a VC or with the more careful angels, without the disadvantage of dealing with their neurosis and negotiation+posturing games.
  • The money is given in the form of a grant. This means that you do not need to give it back. Compared to the 22% interest rate from a BDC loan, this is incredibly better.
  • You are provided mentorship and are given access to resources that can help you fill in the gaps in your knowledge.
  • Any money you make can be reinvested in the business without having taxes taken out.

What makes this program so outstanding is the level of support provided. Participants not only get help in creating a business plan for a viable business, but receive income support while they do it – for up to a year (or up to 78 weeks for a person with a disability). You have to be Employment Insurance eligible to apply, so getting a layoff notice is probably one of the best things that could happen to you, eh?

If you consider this program, the existence of CRA SR&ED, the OCE First Job Programme, and the MITAC ACCELERATE programme, I’d say that Canada has provided more than sufficient support for individuals who want to create a high-technology startup.