How to sell IT services to the Canadian government

Twenty-two billion dollars: This is the value of goods and services the Canadian federal government buys from the private sector every year – including IT goods and services. It’s money that can be made by IT companies willing to put in the time and effort to compete in the federal procurement process.

“The federal government has a robust rules-based procurement system in place,” said Howard Mains, managing director of Tactix, a procurement consulting firm in Ottawa, Ontario.

“Under various trade agreements that Canada is a party to, the vast majority of sourcing requirements are open to competition.”

The downside: As in the US, the state sales cycle is slow, with the gap between the government’s initial invitations to tender (RFPs), bid submission and analysis, contract award, and payment for work performed can take up to two years or more . And it’s complicated, too, with many hurdles that bidders must jump through to meet a variety of state requirements.

Still, for IT firms with the resources and ability to build such long-term prospects, the Canadian government can be a worthwhile and lucrative customer.

The big picture

Shared Services Canada (SSC) is the primary agency handling procurement of IT goods and services for the Canadian government.

“SSC posts bid opportunities on BuyandSell.gc.ca and uses a Procure-to-Pay (P2P) solution to electronically manage its procurement and payment processes,” said the SSC official, who responded to questions via email. “Suppliers can register by visiting the supplier portal within the P2P solution and clicking the Register New Supplier Now button.”

The general procurement process for working with SSC and all federal agencies is managed through BuyandSell.gc.ca. Available in English and French, the site provides a step-by-step online approach to registering with the Canadian government as a potential supplier, searchable tender opportunities (also known as RFPs) for the sale of specific goods and services to Canada, and an explanation of how sourcing works in clearer , simple language.

The Canadian government buys just about every type of goods and services, from airplanes to paper clips and from educational services to scientific research. These purchases are made either through a competitive bidding process or, when circumstances warrant, through a non-competitive sole source process.

It is worth noting that the federal government is ultimately run by elected officials under constant scrutiny and Canadian officials adhere to policies, regulations and policies that ensure the government procurement process is transparent and conducted with integrity. These include policies on employment equity, buying 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 Canadian government’s IT infrastructure, Shared Services Canada has a very broad IT shopping list. According to SSC officials, it includes products and services related to:

• Networking, security and infrastructure products and capacity, Ethernet, fiber, leasing dark fiber, 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 center mainframe, servers, storage, converged infrastructure, power distribution units, software maintenance and support, colocation 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.
• connectivity, productivity and security software for IT software services
• Enterprise-wide solutions.
• Digital communication and collaboration tools, information technology service management tool and services.
• Professional information management/information technology services.

Notable: While SSC is the primary IT vendor for the Government of Canada, some departments and agencies procure their own IT goods and services either because they or the technology in question are not covered by the Shared Services Canada Act. You can find their RFPs at BuyandSell.ca

Some important tires

Because IT is such an integral part of Canadian government, Canada’s approach to IT purchasing of goods and services is commodity-based.

“As a result, they have ‘supply arrangements’ and contracts such as ‘standing offers’ – which are open to North American companies thanks to the Free Trade Agreement – where vendors can bid to be included as potential suppliers for specific goods and services says John Seguin, Procurement Practice Lead at Lumina IT, a procurement consulting firm based in Ottawa, Ontario.

“The government differentiates between hardware and software and services, each of which has its own contracts with source lists or standing offers. If you sell professional IT services, on the other hand, they have a set of pre-packaged source listings organized by type, while most hardware and software listings have standing listings listings.”

As for the traditional process whereby private industry lobbyists meet with senior government officials to present their wares in a more personal and direct way, “most of these interactions, particularly at the senior government official level, have to be registered with the Canadian Commissioner Lobbying,” says Aliénor Peyrefitte, Executive Assistant to the President & CEO at Samuel Associates, a strategic consulting and government relations firm headquartered in Ottawa.

As regulated by Canada lobbying lawIt is the Commissioner’s job to ensure 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 properly registered for the Canadian government’s procurement process, meets all required eligibility/eligibility criteria and is able to offer goods/services at competitive prices that meet the requirements of specific RFPs, it should have a reasonable chance of winning Contracts.

“Contracts are awarded based on best value for the government,” says Mains. “This will be determined based on the evaluation of scoring technical criteria, price and compliance with mandatory requirements. For larger contracts, economic considerations may also be taken into account under the Industrial and Technological Benefits and/or Indigenous Economic Development programs.”

That being said, “If you’re bidding on contracts that are inherently larger than your company’s existing skills and experience, those contracts can be very difficult to win because of a rigorous sourcing evaluation process,” says Seguin. “The key is to bid on contracts that your company has experience fulfilling and is the right size to handle.”

The biggest challenge for many otherwise suitable suppliers is time. Federal government sales cycles are much longer than those experienced in the private sector. Companies should therefore not enter into federal procurement contracts with the hope of quick payment, because that simply will not happen. Likewise, vendors with low cash reserves should think twice about obtaining and executing government contracts, as the time required to do so can be very lengthy.

While politicians shouldn’t interfere with Canada’s federal procurement process, sometimes they do. The good news for IT companies is that this intrusion is focused on multi-billion dollar defense equipment contracts rather than IT.

For example, Stephen Harper’s Conservative government announced plans to source 65 Lockheed Martin F-35s from a single source in 2010 for $9 billion. This procurement later became an issue in the election, in which the Conservatives were defeated by Justin Trudeau and his Liberals. Trudeau canceled the purchase of an F-35 jet fighter. His administration then went through a lengthy procurement process that ended in 2022 with a decision to purchase 88 F-35s for $19 billion.

improve your chances

Unless your IT company is familiar with the Canadian procurement system, it makes sense to hire a procurement consultant to guide you through the process. “The insight and guidance of a government procurement consultancy can really help shape an IT company’s bid strategy and ultimately its chances of winning a government procurement,” says Peyrefitte.

“My number one piece of advice for newcomers to the Canadian government procurement process is to get someone with extensive procurement experience to guide you through the process,” says Seguin.

“You can educate your decision makers internally on the nuances of the process and also know how to communicate effectively with the procurement officers and the buyers on whose behalf they are acting, as these are two very different audiences with different decision-making powers over each government’s procurement of hardware , software, or services, or a combination of the three, as the case may be.”

The Procurement Assistance Canada (PAC) website can improve the chances of success.

“PAC offers free webinars and seminars for companies that want to learn more about the process of sourcing and selling goods and services to the Canadian government,” says Mains. “It also has self-service reference tools for vendors to help them navigate the federal procurement process.”