At first glance the Australian government market might seem to many like a maze of different departments, restrictive processes and bewildering jargon. Selling to government does not have to be difficult if you understand your market. Once you identify the right customers and understand what they want and how they operate – your job will be a lot easier.
When you are initiating business with government, it is important to know where the buying activities take place. As all agencies structure their buying activities differently, you will need to do some research to work out who is the right person to talk to, particularly if you don’t already have a good understanding of the agency’s structure.
There are some significant differences between government and the private sector in how procurement is conducted.
Because government procurement is undertaken on behalf of the public, it is regulated to ensure decisions made are fair, impartial, comply with legal requirements and deliver best value for money.
The procurement policy of each state provides broad terms of engagement with suppliers. Each government agency has its own detailed purchasing procedures which set out how their buyers will purchase goods and services.
Government procurement policy is always focused on getting value for money. Good value isn’t restricted to price alone, and covers a range of other factors including social and economic objectives, non-cost factors such as fitness for purpose, quality, service and support and cost-related factors such as whole-of-life costs and transaction costs.
There are some commodities which all agencies buy, for example, fuel, travel and personal computers. In these cases the government maximises its value by approaching the market as a single buyer. These are called whole-of-government common-use arrangements.
There are other commodities which may be bought by two or more agencies (for example, specific types of emergency equipment or health supplies) for which the relevant government agencies will join together to approach the market as one and coordinate the approvals process – these are known as lead agency arrangements.
To successfully sell to an Australian government agency, you need to:
- identify the right customers
- invest the time to get to know the particular business requirements of different agencies
- understand the language of government
- be aware of the tender process
Where to start
There are literally thousands of people across Australia making purchasing decisions on behalf of the Australian Government. In the A-ZGovBIZ database for example – the work has been done for you. There are over 4,000 key decision makers in 342 federal government agencies and in state government there are over 12,700 decision makers in 2,289 state government departments and agencies. Any or all these contacts can be sourced from A-ZGovBIZ at a fraction of what it would cost to do it yourself.
Marketing to government is often a lesson in the art of getting into the minds of public sector managers. Although this may present a challenge, A-ZGovBIZ has completed most of the work for you. Our team of experts surveyed government buyers and asked a crucial question: how do you find new suppliers?
The results showed:
The value thresholds that trigger the mandatory procurement procedures that agencies need to follow vary according to the type of agency and the nature of the procurement. Where the value of goods or services sought is below the threshold, agencies have more flexibility to decide on a procurement process appropriate to the scale, scope and relative risk of the proposed procurement.
Many procurements below the threshold will not be advertised publicly.
It is important that officials in agencies are aware of the products, skills and capacities of the marketplace. Therefore, as a potential supplier, you need to promote your products and services as a value for money proposition for the government agency in the same way as you would when dealing with other private sector consumers.