The business of selling goods and services to government agencies is one area where small businesses can establish a name, a cash flow and a future. Government contracts can be lucrative, carry cache and provide great cash flow.
The value of government contracts has more than doubled since FY 2006/07. In 2014/15, there were almost 70,000 government contracts awarded. Services make up two thirds, and the top three contractors are Defence Material, Defence and Employment.
Scope for local small business is vast. The Federal Government has a policy of SME participation by total contract value of 10 percent, but it went up as high as 39 percent in FY2011/12.
Last financial year over 41,000 SMEs earned $16.7 billion in government contracts, with billions more available at a state level.
Helping SMEs get up to speed
Queensland-based consultancy firm Pinnibar Pty Ltd knows all about this. Pinnibar was started up by a savvy group of professionals with experience in government procurement across a huge range of industries from aged care to construction. They say that the trick to responding to government tenders lies in knowing what government wants, and ticking off the compliance requirements in advance so you are ready to go when opportunities arise.
“SMEs who want to get some government work need to not only provide a high quality service at a competitive price,” said Naomi Main, Pinnibar Director, “but also need to meet the prerequisite compliance requirements.”
“Odds are that they will all require different levels of certified quality, safety and environmental management systems. There will also be fairly common requirements for professional indemnity, public liability and workers compensation requirements.”
Understanding the rules
So how can your business get up to speed? There are generally three types of tenders:
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