Convincing bureaucrats that bigger isn’t always better

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Tips for small businesses that want to win government work

Owners of small and medium-sized businesses in the National Capital Region can be forgiven for feeling squeezed out of the multibillion-dollar federal government market.

(Stock image)

By Serge Buy

Bureaucrats and apologists for Public Works’s Office of Small and Medium Enterprises – the organization tasked to help SMEs navigate the government’s purchasing machine – proudly proclaim that access to federal work has never been better for these independent firms.

However, some observers and representatives of various business groups privately say the agency acts more like a public relations organization dedicated to making small business owners feel better about their experience of selling to the federal government.

The office prides itself on the number of seminars and workshops it holds to help SMEs sell to the federal government. However, taking a close look at actual sales to the federal government tells a different story.

In fact, OSME has little leverage and almost no power to defend the interests of SMEs.

While numbers are thrown at SMEs to try to convince them otherwise, the general trend shows the proportion of federal contracting dollars going to SMEs is decreasing. And it’s about to shrink even more.

Small businesses say it is becoming more and more complicated to sell to the federal government. The process to qualify for procurement vehicles is increasingly difficult and seems designed to exclude SMEs. It is cumbersome and requires many references from previous projects of a similar nature. This makes it difficult for firms looking for their first crack at government business or companies looking at larger contracts.

Furthermore, the bundling of contracts makes it nearly impossible for small businesses to submit a bid, as very few SMEs have the ability to respond to large multimillion-dollar contracts.

Making the contracts larger and the process to qualify for them more difficult are ways to dissuade SMEs from bidding, without overtly saying so.

These structural obstacles are just the latest challenges facing SMEs in the National Capital Region trying to sell to the federal government.

Generally speaking, public servants are becoming risk-averse. Awarding a contract to a small company is seen as more risky than trusting a large firm, regardless of the cost savings and innovation that often comes with working with a more nimble partner.

Additionally, the Conservative government faces pressure to give contracts and benefits to companies in other regions, including elsewhere in Ontario, the west and, yes, even Quebec.

Finally, cohorts of lobbyists hired by large companies spend their time trying to convince politicians, their advisers and bureaucrats that bigger is better, and that doing business with large companies will accomplish more and save money.

Unfortunately, small companies have a tendency to only act when problems arise and generally do not invest to protect the future of their business. They find it difficult to invest in building relationships and lobbying on issues facing them directly.

Not all is doom and gloom, though. Businesses can take some proactive steps, such as forging relationships with public servants to get to know their needs. This is also an opportunity to promote the number of jobs created by one’s company, as well as its ethics and cost-benefit comparisons.

Business owners can also participate in associations specifically designed to represent SMEs. However, one must be wary of associations involved in procurement issues whose members include large companies that pay the majority of the fees and subsequently call the shots.

Sales professionals should also monitor the government’s plans for the future, as well as what the competition is up to, and plan accordingly. Most importantly, businesses should continue to provide great goods and services.

A healthy SME sector in the National Capital Region is essential to maintain our status as an innovative region where employment can continue to thrive.

Rather than simply talking about how well they’re supposedly serving small businesses, federal officials would benefit from actually addressing the structural barriers preventing this important economic sector from winning government work.

Serge Buy is a senior partner at government relations and communications firm Flagship Solutions.

Organizations: Office of Small and Medium Enterprises, Public Works, Flagship Solutions

Geographic location: National Capital Region, Ontario

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