By Jenny Wagler and Joel McKay
Confusing application processes, excessive paperwork and a complex system of rules are causing small and medium-sized enterprises (SMEs) to feel shut out of many federal procurement opportunities.
That’s the message in a new report from the Canadian Federation of Independent Business (CFIB).
The CFIB says 60% of SMEs in sectors most likely to sell to the federal government either chose not to sell to the federal government or felt it was too difficult and not worth the effort.
“I think the impression people have of selling to the government isn’t exactly one that [is] very easy to do, I think that’s obvious,” said Louis-Martin Parent, a policy analyst with CFIB and author of the report.
“The problem is it’s really the process behind it, the forms, the number of steps, the hurdles they have to jump to get noticed or put in a competitive bid.”
According to the report, 46% of survey respondents rated the quality of government procurement forms “poor.”
Meantime, 41% of respondents said they didn’t sell to the federal government because Ottawa doesn’t buy their type of product or service.
This while 27% said they didn’t enter the bidding process because it’s too complicated, and 25% said they chose not to sell to the government because they had no means of determining what the government wanted.
On top of that, nearly 65% of respondents who did sell to the government said it took between 30 and 60 days to receive payment for their work.
“Small businesses must pay their suppliers and their staff promptly, which they cannot do if the government consistently delays its payments beyond 30 days,” the report said.
Parent said the complexity of the bidding process and the fact that payment is often late puts SMEs in a tough spot.
“Some of these contracts are hundreds of pages long … do I prepare that bid and hope it works out? Or do I spend my time working with contracts I already have and managing my business? It’s very tough,” said Parent.
Burnaby-based manufacturer Williams and White Inc., one of the Lower Mainland’s premier machining shops, often doesn’t bother with federal contracts.
“To be honest it was a little bit complex,” CEO Justin Williams said of the procurement process.
Over the years, Williams and White has manufactured machinery for forestry companies and even built the SkyTrain’s first self-propelled rail grinder in the mid-1980s.
In the recent past, the company successfully bid on contracts for both BC Hydro and Metro Vancouver, a process that Williams said was relatively smooth.
One of the biggest challenges Williams sees with the federal procurement process is connecting with the right people in Ottawa.
“That’s the nice thing about dealing with the private sector … in the end, once you find the right procurement person, you deal with that person or that team,” Williams said.
Parent’s report tabled several recommendations for Ottawa to clean up the procurement process.
To ensure that small businesses can “fully and fairly” participate in the procurement process, the CFIB recommends that government:
- rethink the procurement bidding process from a small-business perspective and enhance bidding flexibility;
- review the practice of “mega-contracts” to ensure maximum competition and savings;
- make the procurement process an integral part of any red tape reduction inititiave; and
- enhance communication between the bidder and end user.
Parent added that websites such as www.buyandsell.gc.ca, the government’s “user friendly” procurement website, have improved the process somewhat in recent years, but there’s still a long way to go.
“In fairness, procurement is a tough area,” said Parent. “I don’t think we’ll ever get to a point that everyone will be happy with it, but in the end, small business just wants a fair shot at it.”