Twenty-two billion dollars: that’s the value of goods and services the Canadian federal government buys every year from the private sector – including IT goods and services. It’s money that can be earned by IT firms willing to take the time and effort to participate in the federal procurement process.
“The federal government has a robust, rules-based procurement system,” says Howard Mains, Managing Principal of Tactix, a procurement advisory firm in Ottawa, Ontario.
“Under various trade agreements Canada is party to, the vast majority of procurement requirements are open to competition.”
The downside: as in the US, the federal sales cycle is slow, with the gap between initial government requests for proposal (RFPs), bid filing and analysis, contract awards, and payment for work done taking up to two years or more. And it is also complicated, with many hoops for bidders to jump through to satisfy a wide range of government requirements.
Still, for IT firms with the resources and capability to cultivate such long-range prospects, the Canadian government can be a worthwhile and lucrative client.
The big picture
Shared Services Canada (SSC) is the main agency that handles IT goods and services procurement for the Canadian government.
“SSC posts tender opportunities on BuyandSell.gc.ca and uses a procure-to-pay (P2P) Solution to electronically manage its procurement to payment processes,” says the SSC public official who responded to questions via email. “Suppliers can register by visiting Supplier Portal within the P2P Solution and clicking on the New Supplier Register Now button.”
The general procurement process for working with SSC, and indeed all federal departments, is managed through BuyandSell.gc.ca. Available in English and French, the site offers an online step-by-step approach to registering with the Canadian government as a potential supplier, searchable tender opportunities (aka RFPs) for selling specific goods and services to Canada, and a explanation of how procurement works in clear, plain language.
The Canadian government buys just about every kind of good and service from aircraft to paper clips, and from training services to scientific research. These purchases are done either through a competitive bidding process or, when circumstances merit, a non-competitive sole source process.
It’s worth noting that because the federal government is ultimately run by elected officials under constant scrutiny and Canadian civil servants adhere to policies, regulations and directives that ensure that the government’s procurement process is transparent and carried out with integrity. This includes policies on employment equity, purchasing goods and services that are less harmful to the environment, and more.
What Canada wants to buy
As the agency responsible for operating and modernizing the Government of Canada’s IT infrastructure, Shared Services Canada has a very broad IT shopping list. According to SSC public officials, it includes products and services related to:
- Network, security and infrastructure products and capacity, ethernet, fiber optics, lease dark fibre, switches, routers, security threat technologies, and satellite services.
- Data center and cloud services such as infrastructure as a service (IaaS), software as a service (SaaS), platform as a service (PaaS) and anything as a service (XaaS).
- Data centre mainframe, servers, storage, converged infrastructure, power distribution units, software maintenance and support, co-location and workload migration services.
- Telecommunications: local telephone network access, toll-free services, long distance, local internet access services, audio and web conferencing services, contact centers, and cellular services.
- IT hardware: desktops, microcomputers, peripherals, printers, scanners.
- IT software service connectivity, productivity, and security software
- Enterprise-wide solutions.
- Digital communication and collaboration tools, information technology service management tool and services.
- Information management/information technology professional services.
Worth noting: While SSC is the main IT provider for the Government of Canada, some departments and agencies procure their own IT goods and services either because they, or the technology in question, is not covered under the Shared Services Canada Act. Their RFPs can be found on BuyandSell.ca
Some important hoops
Because IT is so integral to the Canadian government’s operations, Canada’s approach to IT purchase of goods and services is done on a commodity basis.
“As a result, they have source lists called ‘Supply Arrangements’ and contracts such as ‘Standing Offers’ – which are open to North American companies thanks to the free trade agreement – where vendors can apply to be included as potential suppliers for specific goods and services,” says John Seguin, Procurement Practice Lead with Lumina IT, a procurement consulting firm based in Ottawa , Ontario.
“The government makes a distinction between hardware and software and services, each of which have their own Source List or Standing Offers contracts. Meanwhile, if you are selling IT professional services, these have a series of pre-established source lists organized by type, while most hardware and software have Standing Offer lists.”
As for the time-honored process of private industry lobbyists meeting with senior government officials to pitch their ware in a more personal and direct manner, “most of these interactions, especially at the more senior government official level, must be registered with Canada’s Commissioner of Lobbying,” says Aliénor Peyrefitte, Executive Assistant to the President & CEO at Samuel Associates, a strategic consulting and government relations firm headquartered in Ottawa.
As governed by Canada’s Lobbying Act, the Commissioner’s job is to make sure that all conversations between paid lobbyists and government officials are transparent to the Canadian public.
The reality of winning Canadian government contracts
If an IT company has registered correctly for the Canadian government procurement process, meets all of the necessary eligibility/security criteria, and is able to offer competitively priced goods/services that satisfy the requirements of specific RFPs, they should stand a reasonable chance of winning contracts.
“Contracts are awarded on the basis of best value to the government,” Mains says. “This is determined on the evaluation of point-rated technical criteria, price, and compliance with mandatory requirements. With larger contracts, consideration may also be given to economic considerations under the Industrial and Technological Benefits and/or Indigenous Economic Development programs.”
This being said, “if you’re bidding on contracts that are basically larger than your firm’s existing capabilities and experience, those contracts can be very difficult to win due to a rigorous procurement evaluation process,” Seguin says. “The key is to bid on contracts that your firm has experienced delivering on and is right sized to handle.””
The biggest challenge for many otherwise suitable suppliers is time. Federal government sales cycles are far longer than those experienced in the private sector. As a result, companies should not sign federal procurement contracts with any hope for quick payment, because this just won’t happen. In the same vein, vendors with shallow cash reserves should think twice about seeking and fulfilling government orders, because the time it takes to do so can be very long indeed.
Although politics is not supposed to infringe on the Canadian federal procurement process, it sometimes does. The good news for IT companies is that this intrusion tends to focus on multibillion-dollar defense equipment contracts rather than IT.
For instance, the Conservative government under Stephen Harper announced plans to single source 65 Lockheed Martin F-35s for $9 billion in 2010. This procurement subsequently became an issue in the election that saw the Conservatives be defeated by Justin Trudeau and his Liberals. Trudeau canceled the F-35 jet fighter purchase. His government then went through a lengthy procurement process, ending in 2022 with the decision to buy 88 F-35s for $19 billion.
Improving your odds
Unless your IT firm knows its way around the Canadian procurement system, it makes good sense to hire a procurement consultant to guide you through the process. “The insights and guidance from a government procurement consulting firm can really help shape an IT company’s bidding strategy and ultimately their chances of winning a government procurement,” Peyrefitte says.
“My number one piece of advice for newcomers to the Canadian government procurement process is to get someone with extensive procurement experience to take you through the process,” says Seguin.
“They can educate your decision makers internally to the nuances of the process, and they also understand how to communicate effectively with the procurement officers and the buyers they are acting on behalf of, because these are two very different audiences with different authorities to make decisions on the respective government procurement of hardware, software or services or of any combination of the three as the case may be.”
The Procurement Assistance Canada (PAC) website can improve the odds of success.
“PAC offers free webinars and seminars for businesses interested in learning about the procurement process and how to sell goods and services to the Government of Canada,” Mains says. “It also has self-serve reference tools for vendors to help them navigate the federal procurement process.”