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3 strategies for SMEs to procuring government contracts

Adrian Flores
Adrian Flores
19 August 2020 1 minute readShare
Tender Training College managing director Kate Burrows

An education firm specialising in tender processes has outlined three strategies small businesses can use in gaining a competitive advantage over larger organisations to winning government contracts.

According to the Tender Training College, some strategies small businesses can use include:

  1. Thoroughly reviewing the tender – Read all parts of the tender closely to get a complete picture of what you are bidding for. Failure to do so means you are tendering blindly. 
  2. Conducting a go/no-go process – Do the analysis when receiving a tender to determine your chances of success and whether or not you should actually bid for the work. Otherwise, bidding could be a waste of time, cost and effort. 
  3. Offering the best value for money – Develop a competitive price and identify areas of opportunity that differentiate your tender response and provide value to the client. Put your bid on a superior footing.

The advice comes as Australian Small Business and Family Enterprise Ombudsman Kate Carnell said small businesses will play a critical role in the post-COVID economic recovery, and called on the federal government to offer contracts with a value of up to $10 million to small businesses before they are opened to the wider market.

In the 2018–19 financial year, the federal government awarded 78,150 contracts, with 53 per cent going to SMEs totalling $16.7 billion in value, representing an 18.2 per cent increase in the number of federal government contracts awarded to SMEs compared to the previous period.

Tender Training College managing director Kate Burrows said SME tendering is key to giving the Australian economy the kickstart it needs in a post-COVID era.

“We have seen a 30 per cent increase in SMEs looking to improve their tendering skills in recent months so they can compete for government contracts, as they find new ways to survive during this tumultuous time,” Ms Burrows said.

“That’s because government contracts offer good tenures, clear payment terms, defined deliverables and reliable income streams for SMEs to grow their businesses securely.

“However, many small businesses simply don’t know where to start with tendering often because of the highly complex nature of the tenders themselves and the formalities of the process. Tendering is like learning a new language.”

Ms Burrows said she’s often witnessed how SMEs are unfairly disadvantaged in the government procurement process compared to big business because tendering requires significant time, effort and resources to be successful.

“It’s imperative SMEs educate themselves with the fundamentals of tendering to put themselves in the best possible position to tender, but also for governments at all levels to make the process more equitable and accessible,” she said.

3 strategies for SMEs to procuring government contracts
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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