Government procurement not worth the hassle: SMEs
June 23, 2011
by Erika Beauchesne
OTTAWA―Sixty per cent of Canada’s small and mid-sized firms have given up trying to sell to the federal government because they say the process is too time-consuming.
Those are the findings of a recent survey by the Canadian Federation of Independent Business (CFIB).
CFIB sampled companies that had either sold to government before or were in sectors and regions that made them more likely to sell to government.
Respondents said their attempts to access federal procurement have been tied up by a complex application system.
One Canadian manufacturer, who spoke on the condition of anonymity, called the current bidding process “too painful” to bother.
“If I spent all my time responding to the silly amounts of paperwork they require just to be “qualified” to bid, I would have gone bankrupt a long time ago,” the manufacturer said.
Another Ontario-based manufacturer wishing to remain anonymous said that procurement personnel lack the equipment knowledge to make correct evaluations.
“One day, they are buying paper cups, then the next, they are expected to evaluate a specialty piece of industrial equipment,” the manufacturer said.
SMEs from sectors such as construction, wholesale and retail reported similar deterrents, including a lack of clarity about what the government wants.
And the smaller the firm, the less inclined they were to use the government’s electronic tendering service, called MERX.
“You would think that small companies would be more likely to go online, but the process behind all those postings is really frustrating for them and a lot just don’t bother applying,” says Louis-Martin Parent, CFIB’s policy analyst for Ottawa.
Parent says one of the biggest problems right now is the bundling of contracts into one massive deal that’s awarded to a single firm.
“These contracts can reduce competition for government work by smaller businesses, potentially leading to higher costs to taxpayers in the long run,” he says.
The CFIB is calling on the government to review its current practice of awarding mega contracts.
It’s also lobbying for a more flexible bidding process with better communication between the bidder and end-user.