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Doing business with government - understanding the tender process

Ever wished you could gain a firm understanding of government procurements rules, processes and programs to help you do business with them? Well there is some good news and the government, both state and federal, have taken steps to simplify things in an attempt to stimulate the economy and encourage small businesses to tender.

While the tender process itself might still be complicated to the newcomer, the government has taken steps to also help businesses build relationships with government prior to tendering to help them identify and qualify for more opportunities. 

Federal government procurement reform

At the Labor Party conference in July, it was announced that new procurement rules will be drawn up for federal government.  Under the reform federal government agencies must demonstrate they are model purchasers by creating opportunities for small business and giving preference to suppliers with good records of environmental sustainability, respect for employee rights and - across the manufacturing sector mostly - use of apprentices 

This means that government departments won't be forced to choose the lowest-cost supplier and must instead take into account a range of social and environmental factors when deciding whether potential suppliers offer "value for money". Businesses bidding for governmetn work will also have to produce "Australian industry participation plans" where they have to outline potential local suppliers and explain any decisions to use competing foreign suppliers. 

The federal government will also boost funding for the Industry Capability Network to help local firms bid for work at home and abroad, and it will also fund business figures to act as supplier advocates in various sectors.

Details of the Industry Capability Network are described later in this article.

Types of opportunities - how you can get your slice of the pie

For the Queensland Government there are four categories of procurement under the State Procurement Policy, not all of which require government to tender for services. They include:

• Specialised services – if you are considered to have a specialised service, then you are encouraged to build a direct relationship with government to educate them about what you do so that you are ‘on the radar’. Your first point of call is to contact a procurement manager (more on that later…) who will be able to set up a meeting between you and the person/people in government with the ‘need’.
• Routine services – Government can purchase what is considered low risk products or services up to $10,000 without tendering. Anything less than $2,000 is made on a corporate credit card. This credit card is also made available to share with staff. The tip is to find out who in government is issued with theses credit cards as they have the $10K limit (it’ll be management level).
• Critical services – High value, high risk. These are always tendered for.
• Volume services – Standing offer arrangements (usually up to 5 years) – items such as gloves, pens, fuel cards or others that are bundled into high volume. Queensland Health, for example, are big users of this type of contract.

Online information

The Queensland Government is moving away from publishing tenders and shifting to online publishing.  It’s important to register with these sites and check them frequently.  There are also tendering opportunities with other state governments published on the Qld Government site (see links on the site) which businesses should consider too.

Tender opportunities are listed at:

www.qgm.qld.gov.au (state)
www.tenders.gov.au (federal)
www.heirg.com (project information for projects above $2.5m – this includes both public and private projects).

Tips to get involved

Industry Capability Networks

The Industry Capability Network (ICN) is a government-funded scheme to match suppliers with capability.  Importantly, it’s where businesses can register as a supplier.

There are currently 720 major projects under study, in planning or underway for Queensland providing an enormous supply chain opportunity for businesses. The Queensland Government wants to ensure Queensland businesses get every opportunity to tender to win business. There are dedicated industry capability networks set up for each state, and there is also a federal government scheme. Visit:

Federal - http://www.icn.org.au/
Queensland – http://www.heirg.com/
New South Wales - http://www.icnnsw.org.au/
Victoria - http://www.icnvic.org.au/
Western Australia - http://www.icnwa.org.au/
Tasmania - http://www.icntas.org.au/
Northern Territory - http://www.nticn.com.au/

When registering online, it is strongly advised to use dot points when describing your service offering in the registration field as this gets entered into a database. The more detailed keywords you can provide, the better chances you have of coming up as a ‘match’.

If there is a project on this list that a business is interested in, then it is advised to phone the Industry Capability Network and talk to them about the project and ask them how to get involved.

Published Procurement Plans – get proactive and start prospecting

Many departments are now publishing online their procurement plans, which provides a pipeline opportunities.  QBuild also publishes their upcoming opportunities on their website (mostly building materials). 

The State Budget (www.budget.qld.gov.au) also has line-by-line what the capital expenditure for next year will be. If there is a sizable amount then it can be safely assumed they’ll go to market to procure that service. If you see something that you think you can offer bigger, better, more cost effectively etc, then find out who the procurement manager is for that area and ask for a meeting well in advance and go in a pitch your product, service – tell them why working with you would be good for the Queensland Government.

Don’t wait for the tender to land to ask questions. Be proactive and make contact with a procurement manager!

Finding out who your competitors are

All tenders above $100K are being published at www.projectservices.qld.gov.au.  On this site they are also publishing the “read out” prices.  That is, who submitted a tender and what their total offer came to.  This does not provide any other information other than who tendered – it does not state who it has been awarded to.  This information will stay on the website for up to 45 days – so it is important that this information gets printed out and kept for later reference.  It will not only provide you with information on who tendered, but it will give you an idea of whether or not your pricing is in the ballpark (or not).  It can also provide you with supply chain opportunities as you’ll know who is active in the market and who may need to purchase products as part of their offer to government.  

In Queensland, awarded tenders are published on www.qgm.qld.gov.au  If you go back and compare the “read out” price to the awarded price, you might also get some insight into people’s pricing strategies (some may have offered a discount etc).

Where to go for further information

The above information is a summary only, and while mostly Queensland-centric there are likely to be similar procurement rules for other State Governments.

Additional information can be sourced directly from the State Procurement Policy which is published in full at: http://www.qgm.qld.gov.au/policy2007/index.html