Want to win government business? Don’t be too ‘commercial-centric’

Governments may be open for business, but that doesn’t mean doing business with a government is necessarily easy. Government procurement is complex – this is not by happenstance. The rules on public procurement stem from a number of sources including law (trade agreements, the common law and legislation) and policy. It can be a painful and costly learning curve for companies that want to sell goods and services to the country’s largest buyers if they don’t understand the rules.

Government decision-makers are answerable to a very wide range of stakeholders, including the Canadian voters who put them in office and the Canadian taxpayers who fund their operations. In a public procurement, it’s not just about getting the best deal – it is also about meeting the broader public interest and achieving long-term policy objectives.

The goal is to promote fairness

Competition is the rule in public procurement because it offers a fair, open and transparent environment, and meets the public objective that all potential suppliers get a fair kick at the can to sell to government. This is important when you consider that, for example, the Department of National Defence is the largest Canadian purchaser of goods and services from the Canadian defence industry.

Canada has implemented several trade agreements in the past few years, including the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Canadian Free Trade Agreement (CFTA) (which replaced the Agreement on Internal Trade (AIT)). Understanding how these agreements impact procurement is even more important for suppliers and their federal, provincial and territorial government customers, as well as for the municipal, academic, school and hospital (MASH) sector which may now be subject to trade agreements for the first time or subject to additional or new rules brought about by these new trade agreements.

Prepare your RFP response team for a long haul

Businesses must understand the processes that come into play in public procurements, such as the need to resource their RFP response team for a long period of time or the impact of failing to meet mandatory RFP requirements (disqualification from the procurement process).

Learning to manage the length of time it takes to progress through a procurement cycle, and to navigate the processes, is a big challenge. In business, relationships matter, but developing a good working relationship with key decision-makers in government departments or agencies can be difficult since government tends to have greater workforce mobility and people change in and out of roles frequently. Further, dealing with government means complying with lobbying laws and conflict-of-interest rules. In many jurisdictions, discussions about procurement requirements outside of public solicitation processes is considered lobbying, as it is attempting to sell products or services to the government. Conflict of interest rules may also preclude certain people from doing business with government officials.

Approaching public procurement with a “commercial-centric” view often leads to frustration. The federal government does understand “how business works,” but there are still many aspects of a public procurement that are not (and cannot be) commercially focused, including those related to complying with applicable trade agreements, protecting the public interest and serving policy objectives such as regional development and economic diversification. Companies participating in a public-sector procurement process face unique compliance requirements that don’t come into play with a typical private commercial transaction.

Expect heightened security requirements

With the increasing attention being paid to cybersecurity and data protection, companies will find they are now subject to more stringent security requirements, including an increased requirement for product functionality and security control disclosure in advance of their products or services being accepted by government buyers. This level of disclosure can extend through to greater access to the underlying technology used so that the customer itself can test for, and understand, cyber-threat vulnerabilities.

Whether this is your first foray into the world of government procurement – and you need to understand the rules of public procurement so that you can properly understand the RFP documents and the plethora of government policies – or you have a broader interest focused on influencing government policy and direction as it relates to your business or your industry, knowing how to best position your organization to take advantage of both possible routes is critical to a successful government procurement business. Waiting until you have lost a bid is too late to effect a change for your organization’s benefit.

Be proactive with the right advice

Regardless of your focus, knowing how the system works and how to best advocate for your interests is a crucial and part of any successful business plan. Working with a legal team that has knowledge and experience in all of these areas and can assist with strategic planning and approach from start to finish is critical to success.

Marcia Mills is procurement counsel with the Fasken Ottawa office and has 20+ years of private and public sector experience. She provides clients with legal and strategic advice for all aspects of government procurement, as well as advice on government policies and procurement processes. She can be reached at mmills@fasken.com