Identifying opportunities to sell to government

What does the Australian Government buy?

The Australian Government is a large potential market for businesses of all sizes.

From advertising to cleaning services, engineering, office equipment, training, project management, research and recruitment — Australian Government organisations buy a wide variety of goods and services. Each Australian Government organisation has its own needs and makes its own purchases to meet its requirements.

How does the Australian Government usually buy these things?

The Australian Government uses two methods for procurement: open or limited tender. The choice of method then dictates how the Australian Government approaches the market. More information on these methods is provided in the section below.

Regardless of the method, the Commonwealth Procurement Rules (CPRs) outline a set of rules that must be followed by relevant Australian Government organisations.

The CPRs contain procedural rules that apply to procurements, with some different requirements for procurements valued above certain thresholds or covered by specific exemptions.

Generally, the process is most structured for buying goods and services in excess of $80,000. Below this threshold, Australian Government buyers must comply with the rules for all procurements, outlined in Division 1 of the CPRs, which is focused on ensuring Australian Government purchases achieve value for money .

Above this threshold, unless there are specific exemptions that apply, Australian Government buyers must comply with additional rules, outlined in Division 2 of the CPRs. For some Australian Government organisations, the threshold above which these additional rules apply is $400,000. For procurement of construction services, the threshold is $7.5 million. The Australian Government buyer will take the relevant thresholds for their organisation into account when approaching the market.

Australian Government procedures operate on an underlying presumption that there will be an open approach to the market unless certain limited circumstances apply. The CPRs are a common set of rules that relevant Australian Government organisations apply in a manner consistent with the business needs of each individual organisation. The information available in this guide will give you an understanding of the obligations that apply to Australian Government organisations as outlined in the CPRs.

Procurement methods

Open tender

Open tenders are advertised on AusTender and publicly invite all potential suppliers to bid for the contract. An open Approach to Market (ATM) allows:

interested suppliers to respond by providing the required information
responses to be reviewed against the stated evaluation criteria
the preferred supplier(s) to then be selected.

Further information on how to use AusTender is available in the Frequently Asked Questions – Using AusTender section of this website, or the AusTender Help and Information Centre.

Limited tender

Under a limited tender, one or more potential suppliers are invited to bid for the contract. The ATM is only accessible to suppliers invited to submit a response.

In most cases, there are specific conditions which must be met when Australian Government buyers apply a limited tender procurement method. For instance, when the value of the procurement is over $80,000 (or $400,000 for specific entities) and the Australian Government buyer is procuring non-construction goods and services. Conditions for limited tenders are set out in the Commonwealth Procurement Rules.

There are also a range of specific exemptions which permit the use of a limited tender approach listed in Appendix A of the CPRs.

Procurement through a standing offer (or panel)

Australian Government buyers may also approach suppliers through a 'standing offer’ that has been established through a previous procurement process. Under a ‘standing offer’, a supplier enters into an agreement, known as a 'deed of standing offer’, with an Australian Government organisation to provide goods or services for a set period under agreed terms and conditions, which can include agreed pricing. Where there are multiple suppliers under a standing offer arrangement it is commonly called a ‘panel’. Generally, the deed of standing offer will be the same for each supplier on any given panel.

Panels and standing offer arrangements are established for use by an Australian Government organisation or group of Australian Government organisations, and are usually published as an open tender on AusTender. Businesses can respond to the ATM and if value for money is demonstrated in their response, be appointed on the panel. Appointed suppliers then enter into a deed of standing offer with the Australian Government organisation.

When Australian Government organisations have identified a need to procure goods or services, they may approach suppliers appointed to panels to request quotations, in line with the standing offer terms and conditions. Buyers must then select the response that represents the best value for money. To maximise competition, Australian Government buyers are encouraged to approach multiple suppliers, where possible.

There are a range of Whole of Australian Government arrangements that are mandatory for most Australian Government organisations, established as standing offers or panel arrangements. To learn more about these arrangements, please visit the Department of Finance website.

Further information on panels and standing offers, including Whole of Australian Government arrangements, is available in the Frequently Asked Questions – Understanding panel arrangements section of this website.

Is every Australian Government purchase advertised and can any business respond?

Generally, procurements valued above $80,000 (or $400,000 for specific entities) must be published via an open tender on AusTender unless they meet specific conditions for a limited tender or fall under certain exemptions. When these exemptions apply, an Australian Government buyer may use a limited approach to engage one or several businesses directly for a response. Procurements valued below these thresholds do not have to be advertised publicly and can be conducted through a limited tender approach.

Australian Government buyers may also approach suppliers through an existing panel or standing offer, to procure goods and services covered under that arrangement. This includes certain Whole of Australian Government arrangements that most Australian Government buyers must use for categories of commonly purchased goods and services. In these cases, only businesses that are covered by the arrangement may be approached for work.

The Australian Government buyer must still be satisfied that any purchase achieves the best value for money.

How can I find out what the Australian Government wants to buy?

You can visit AusTender and search current approaches to market to see what Australian Government organisations are currently in the market to buy. You can search by keyword or browse the current opportunities sorted by categories such as closing date, or buying organisation.

If you are already registered on AusTender, you will be sent an email whenever there is an opportunity that matches your criteria. Further information on setting up notifications can be found on AusTender.

All currently open ATMs are also listed in the AusTender Current Approaches to Market report.

Australian Government organisations may also publish advanced notice of their longer-term procurement plans through an Annual Procurement Plan (APP), which is published on AusTender.

These are also available in the AusTender Planned Procurements report.

Further information on how to use AusTender is available in the Frequently Asked Questions – Using AusTender section of this website, and on the AusTender Help and Information Centre.

Australian Government purchases below $80,000 (or $400,000 for specific entities) do not need to be advertised broadly, and in these situations, the Australian Government buyer will approach the market directly for quotes.

For lower value contracts, it may be helpful to market to Australian Government organisations as you would for any other potential client. The challenge can be in reaching the buyer(s) within the organisation at the right time. Calling on Australian Government organisations in the hope they buy your service or product (commonly called cold-calling) is generally not an efficient marketing method. This is because officials need to consider probity requirements and remain impartial when making purchasing decisions.

Often, the most valuable things you can do to make sure that Australian Government buyers are aware of your goods and services are to:

have an active, attractive, easy to find and user-friendly website
build connections in your industry
attend industry events and trade shows where Australian Government buyers may be present.

What is AusTender?

AusTender is the procurement information system operated by the Australian Government. It advertises most forms of openly available business opportunities with the Australian Government. AusTender is a useful source to find information on which Australian Government organisations are currently buying, what they are buying, and who to contact. It also provides information on which businesses have won contracts and their value. Registering for and using AusTender is free.

Further information on how to use AusTender is available in the Frequently Asked Questions – Using AusTender section of this website, and on the AusTender Help and Information Centre.

Can I find out when the Australian Government wants to buy something?

All open ATMs from relevant Australian Government organisations are published on AusTender, which is free to join and use.

If you are invited to participate in a limited tender, or are approached under a standing offer or panel arrangement, you will be contacted by the Australian Government buyer with the tender details. These procurement processes only happen in specific circumstances.

Australian Government organisations may publish advanced notice of their longer-term procurement plans through an Annual Procurement Plan (APP), which is published on AusTender.

These are also available in the AusTender Planned Procurements report.

It is important to note that APPs are an indication of what organisations expect to procure each year and are based on the best information available at the time of publication. Planned procurements may be revised, withdrawn, or cancelled, and the organisation may undertake procurements that have not been previously identified in APPs.

It may also be useful to cultivate sound professional working relationships with potential Australian Government users of your goods and services so that they are aware of the capabilities of your business. For example, Australian Government organisations with standing offers may invite their suppliers to provide information about their goods and services for distribution to other Australian Government organisations.

Can anyone put in a response to an ATM?

Yes, if the ATM is an open tender. In these circumstances, any business that considers it can meet the requirements is able to respond. All open ATMs are published on AusTender, which is free to join and use.

For a procurement valued below $80,000 (or $400,000 for specific entities) or that meets certain exemptions, the Australian Government organisation may invite only a limited number of potential suppliers to respond to the ATM.

For a procurement from a standing offer arrangement, the Australian Government organisation may choose to invite one or more businesses that are appointed to that standing offer to respond to the ATM. You can only respond to an ATM through a standing offer if you have been appointed to the relevant panel and entered into a deed of standing offer. To maximise competition, Australian Government buyers are encouraged to approach multiple suppliers, where possible.

How can I make sure Australian Government buyers know about my business?

Across the Australian Government, each individual organisation is responsible for buying goods and services from the private sector to meet its business requirements. This means that for many categories of goods and services there is no single Australian Government buyer or market.

It is worth investing the time to get to know the particular business requirements of different Australian Government organisations so you can target the most relevant markets for your business.

There are many steps you can take to understand the needs of Australian Government organisations and market your business as providing attractive, value for money solutions. You may need to invest time and resources to enter the Australian Government market with success.

Responding to open tender approaches to the market is not the only way for you to sell to the Australian Government. For limited tender approaches to market, Australian Government buyers will approach potential suppliers directly.

In many respects, you should treat the Australian Government as you would any other client. An active, attractive, easy to find and user-friendly website is typically the best marketing tool you can have. You might also want to participate in ‘meet the buyer’ functions or other professional networking opportunities. All of these things make it easier for Australian Government buyers to find your business when they are carrying out their market research.

Just like business development in the private sector, it is important to build relationships and ensure your potential Australian Government customers are aware of your capabilities and have confidence in your ability to deliver. A good reputation is an effective way of promoting your services within the government sector. When an organisation is pleased with your goods or services, ask if you can use them as a referee for future opportunities.

To help get you started, here are some basic tips on marketing to, and doing business with, Australian Government organisations:

try to identify the organisations likely to need your goods or services, and within those organisations, identify the specific areas that are most likely to make purchasing decisions
build relationships in your sector
attend industry events and trade shows where Australian Government buyers may be present
develop your relationships by meeting with the relevant officials and providing useful information – information could include your corporate profile, track record, testimonials, website address, pricing schedules and contact details
make sure Australian Government buyers know what sets you apart from your competitors
maintain contact with Australian Government organisations to ensure you are aware of future prospects
be aware of any regulatory requirements, conditions, licenses etc. that you might need to supply to the Australian Government organisation
consider whether you can partner with other businesses that sell to government organisations
build a reputation for providing value for money – bid competitively and wherever possible add extra value within the scope of the requirement – an innovative solution is often welcomed.

Where can I find out more about specific Australian Government organisations, and what they are buying?

A good place to start your research is online. Most Australian Government open tender opportunities are listed on AusTender.

Further information on how to use AusTender is available in the Frequently Asked Questions – Using AusTender section of this website, and on the AusTender Help and Information Centre.

Australian Government organisations also have their own websites that provide information about what they do, and strategic business opportunities are included in their Annual Procurement Plan which can usually be found on the organisation website, and is also on AusTender.

It is important to note that Annual Procurement Plans are an indication of what organisations expect to procure each year and are based on the best information available at the time of publication. Planned procurements may be revised, withdrawn, or cancelled, and the organisation may undertake procurements that have not been previously identified in these plans.

You can find the information on the structures, organisations and key people in the Australian Government Directory website.

You can find further information on accessing specific opportunities and markets in the below sections of this website:

I just received a number of questions about my products and services. Does this mean the Australian Government is planning to buy something from my business?

Australian Government organisations sometimes need to gather information from potential suppliers to enable them to make a business case to buy something, and if the business case is positive, secure a budget allocation to make the purchase. Unless you were specifically advised that the Australian Government organisation wanted to place an order with you, they were only conducting market research, like any other client would do, before committing to buy something.

If an Australian Government organisation intends to buy something from your business, you are likely to be asked to provide a formal quotation or tender response, and you should receive a written contract of some type.

The only exception to this is for very low value procurements, often those made using a credit card. In this case, you may be asked to provide a verbal quotation, and will be given the relevant purchasing card number if the Australian Government organisation intends to make a purchase from your business.

If you are not sure whether the Australian Government organisation is merely making enquiries or is actually placing an order with you, be sure to ask and clarify.

I’ve never sold to the Australian Government before — can I still win a contract?

Yes.

Just because you haven't worked with the Australian Government previously, does not mean that you cannot win a contract.

If you haven’t worked with a government organisation previously, there are steps you can take to both build and clearly demonstrate your business’ capacity and capability to meet the needs and expectations of an Australian Government buyer.

These include:

showing that you have current or past clients of a comparable size with similar requirements who are satisfied with your business
identifying the risks the Australian Government might be taking in dealing with your business and explaining how you will manage and reduce those risks
applying for smaller government contracts first to get experience and references before applying for larger contracts
partnering with other businesses that have more experience in supplying to government until you build experience and reputation, and then subsequently responding to ATMs in your own right.

Why would I want to partner with another business for government work?

Strategic business relationships can take a number of forms and can offer substantial benefits. For example, by forming a consortium to pool resources and capabilities and submit a joint bid, you can reduce your tender costs and participate in projects you could not bid for individually.

Probably more common than joint bids are prime / sub-contractor arrangements. Under these arrangements, suppliers who are awarded prime contractor status use sub-contractors to perform some or all of the services required by the Australian Government organisation. Developing relationships with these prime contractors can be a relatively simple and attractive way to access the government market.

The key is to build relationships with other businesses in your industry and related industries, and make full use of your business networks. Networking can be the best way to find other suppliers to work with, but industry associations and business consultants can also act as brokers on your behalf.

For some ideas on business networks that may be able to help you make these connections, refer to the Business information and networks section of this website.

Finally, it is important to plan ahead — it is much easier to develop your relationships before a tender is announced, rather than during the bidding process.

What should I consider before partnering with another business for government work?

You should carefully consider and take steps to protect your interests before partnering with another business. Partnering has risks as well as rewards. You need to understand all aspects of your strategic partnerships to make sure they work for you. It is worthwhile investigating your partner’s record of supplying to government, their capabilities and key staff. Be sure to address issues such as payment arrangements, risk sharing and intellectual property before you enter into contractual arrangements that bind you to your partner.