Explaining the benefits of Canada’s G2G to government buyers
Government to government (G2G) contracting is a low-risk way for governments abroad to buy from Canadian businesses — but not every government is familiar with the approach. This blog will help you answer some of the questions your potential government customers may have about Canada’s unique G2G contracting approach.
Government to government contracting through CCC offers many benefits to Canadian businesses. We help you navigate complex foreign procurement policies and regulatory issues, provide you with a competitive advantage, and connect you to high-level government decision-makers.
But you’re not the only one who benefits from the G2G approach. Government buyers stand to gain as well and here are a few key benefits that you, as a Canadian business, can point out. This blog discusses the top benefits to government buyers for choosing Canada’s G2G contracting approach.
What is G2G contracting?
Government to government (G2G) contracts are agreements between government entities for the purchase of products, services, or solutions. They are often used for the purchase of goods and services for national security but increasingly used for other purposes such as emergency response, and for the construction of airports, water sanitation systems, and other public services.
Canada’s G2G contracting approach is unique in that instead of having an agreement with a company for the supply of a product, service, or project, a government buyer has a commercial agreement with the Government of Canada to deliver on the requirement. This has the benefits of increasing bilateral relationships, reducing procurement risk and increasing the number of bankable projects of national or sub-national importance.
Use of G2G agreements around the world
Most countries’ procurement laws and legislation include exceptions to competitive procurement for urgent acquisitions or those related to national security. That allows governments to acquire products or services on a G2G basis, which can help avoid the costly delays associated with an open call for proposals.
Many countries, like the UK, Australia, France, and Korea, offer G2G agreements to build and sustain bilateral and security relationships, achieve platform and doctrine alignment with allies, and build policy and technical capability. Canada is no different.
CCC has been negotiating and overseeing G2G contracts since the end of the Second World War, starting with the 1956 Canada–U.S. Defence Production Sharing Agreement, which gives Canadians access to U.S. Department of Defense (DoD) procurement opportunities. Today, CCC is active in countries around the world, negotiating G2G deals with national, state, provincial and municipal governments, including government-owned enterprises such as utilities.
Benefits of Canada’s G2G to government buyers
Assurance from Government of Canada
When CCC signs a G2G contract with a foreign government, we take on the role of the prime contractor. That means we assume all performance oversight and financial administration, handling payments and cash flows throughout the contract’s execution. We also remain fully engaged during the delivery and warranty period, working with the purchasing government to ensure the project is completed successfully.
In addition, our contracts have the legal effect of being signed in the name of the Government of Canada. That provides your foreign government buyer with the assurance and confidence that the contract will be delivered per the agreed terms and conditions, guaranteed.
Favourable financing terms
G2G contracts with CCC are well regarded by commercial lenders as they are backed by a history of success and the Government of Canada. This means that often G2G contracts receive favourable project financing terms.
Value for money
CCC delivers value for money when government buyers choose to use Canada’s G2G contracting. Our fees, which are included in the total contract price, cover the effort and costs of CCC performing due diligence reviews on the Canadian supplier as well as our oversight role in managing contract performance, per the agreed terms and conditions, so we can have a successful outcome.
If your contract is with the U.S. Department of Defense, there are no fees at all per the Canada–U.S. Defence Production Sharing Agreement (DPSA). Our services to your U.S. DoD buyer are funded by the Government of Canada.
Reduce procurement risk
Countries that sign G2G contracts with CCC have the Government of Canada’s assurance that their projects will be delivered as negotiated, guaranteed. Before working with any Canadian exporter, we conduct a thorough review of their integrity, technical, managerial, and financial capabilities. This ensures they have the ethical business practices we require, as well as the technical, managerial, and financial strength to successfully deliver the project.
Because we take on all performance oversight and financial administration of the contract, our G2G approach also greatly reduces the risk of bribery, corruption, and other practices that can hinder procurement effectiveness.
Meet urgent deadlines
When a competitive procurement process or the risk of failed tender has the potential to introduce unacceptable delays to high-value, high-priority projects — or even compromise national security — Canada’s G2G approach accelerates the contracting process to ensure urgent acquisition needs are met. CCC can satisfy priority government needs with unsolicited proposals from our qualified Canadian suppliers using Canada’s flexible and transparent G2G contracting approach.
Support for local economies
Beyond the products or services being delivered, Canada’s G2G contracts can also create local benefits through direct employment and the use of local subcontractors. This can provide opportunities for local training and knowledge transfer — all of which result in positive, long-term economic impacts.
For example, in Bermuda Canada’s Aecon Group successfully built a new terminal for the country’s airport. Not only did Aecon use mostly local contractors during construction, but 90 percent of the employees of the subsidiary it created to manage the airport’s operations are Bermudian.
Take advantage of Canadian expertise
Acting as prime contractor, CCC provides foreign governments with easy access to Canadian products and services — allowing them to choose their preferred Canadian exporter for whatever expertise they require.
Let CCC help explain Canada’s G2G
CCC’s G2G approach appeals to foreign government buyers because it offers less risk and a Government of Canada guarantee of contract performance. Our position as a Canadian agency that respects local procurement laws and practices is another reason that foreign governments are willing to start discussions with us about their needs and to consider a sole-sourced G2G contract.
If you are working on a project with a government buyer and would like assistance from our regional directors and our partners at the Trade Commissioner Service, contact us to learn about how we can support your international opportunity.
This article will guide you through everything you need to know about G2G contracting
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