How CCC aids deals between Canadians and foreign governments
CCC understands the challenges Canadian exporters face when selling to foreign governments and what government buyers face when making acquisitions internationally. For this reason, CCC offers a customized government to government contracting approach to meet specific project needs. In this blog, we discuss CCC’s role in aiding deals between Canadian exporters and foreign governments.
Government to government (G2G) contracting refers to a type of contract where a government agency or department enters into a business agreement with another government agency or department for the provision of goods, services, solutions or information.
Many countries offer G2G contracting but Canada’s G2G offering is unique. A key difference between G2G contracting through CCC and conventional procurement is that, in a G2G contract with non-U.S. DoD government bodies, CCC serves as the prime contractor. That means CCC signs the contract with the foreign government buyer on behalf of the Government of Canada and the Canadian exporter signs a sub-contract with CCC to execute the work of the overarching agreement.
“Our goal is two-fold,” says CCC Export Sales Manager Antony Rizk. “First and foremost, we want to get a good deal for Canadian exporters, with terms and conditions acceptable to them. At the same time, we are also working to ensure the buyer is happy with the results.”
By considering both sides of the transaction and the strength of the deal overall, CCC is an effective advocate for Canadian companies — and protects Canada’s reputation as an honest broker accountable for international project deliveries.
Before the negotiation
A lot of work happens before sitting down at the negotiating table with the buyer. Your CCC representative meets with you to review your draft proposal and confirm alignment on the proposed terms and conditions. The aim is to come to a starting position that both you and CCC are comfortable with — a united front.
“We know what tends to work for foreign government buyers — and what doesn’t — so we can make sure the starting negotiation position is strong and fair,” says Rizk. “Everything we do is in partnership with the exporters we work with and is aimed at achieving a contract win. We never impose terms and conditions unilaterally. It’s a joint negotiation, we’re working together for the win.”
During the negotiation
When it’s time to meet with the buyer, Rizk says you should consider this your contract. You’ll speak to the technical details of your solution, and CCC will facilitate the contract negotiations.
“Our team knows a lot about contract law, but we fully respect exporters’ expertise when it comes to their own products and services,” says Rizk. “The technical details are a huge part of the negotiation, and we rely on our exporters to lead those parts.”
CCC will consult with you on pricing strategy, but you set the direction based on your business requirements. As a representative of the Government of Canada, CCC provides a level of reliability that can help buyers feel comfortable foregoing some of the risk mitigation measures they typically ask for. These can include contract guarantee instruments like bonds, holdbacks or advance payment guarantees. By calling on Canada’s AAA credit rating, CCC can often have these provisions waived and help keep the overall costs of the contract down.
An important decision in contract negotiations is which country’s laws will be used to govern and interpret the contract. Both the exporter and buyer need to agree on that point. CCC has negotiated acceptable arrangements for exporters with many government buyers trying to minimize their risk.
After the negotiation
Once the contract with the buyer is signed, you’ll sign a sub-contract with CCC, which delegates responsibility for the fulfilling the contract terms to you and outlines how the contract will be managed. In general, we’ll oversee the transfer of funds to ensure transparency, appropriate use of funds, respect for anti-corruption policies, and manage the contractual obligations and issues that arise. You’ll handle any technical issues — unless they require a contract amendment which we will put in place with the agreement of all parties.
The key thing, says Rizk, is that CCC only ever signs a contract with a government buyer if you, the exporter, are satisfied with the provisions.
“At the end of the day, we’re here to help Canadian companies succeed internationally,” he says. “We make sure exporters are comfortable with what’s expected of them and commit to terms that give them the best change of success for contract delivery.”
What opportunities are best suited for Canada’s G2G?
Outside of opportunities with the U.S. Department of Defense (U.S DoD), CCC looks for Canadian companies and export opportunities that check several of these boxes:
The Canadian exporter…
- Has experience selling internationally, especially into similar markets
- Sells directly to international government entities
- Has prioritized selling internationally as a key component to grow sales
- Has staff, local partners or representation
- Has the capacity and financial strength to pursue deals of a significant size as buying governments usually consider G2G for larger, critically important procurements.
If the opportunity with the foreign government…
- Is relatively large (>$10M) or
- Will lead to a larger deal that will get attention at senior levels of the buying government.
For contract opportunities with the U.S. DoD, CCC support Canadian businesses that have goods and services that are of interest to the U.S. military, have an opportunity to sell directly to the U.S. DoD, and have a sales lead valued at more than USD$250,000.
The U.S. military buys a variety of products and services every year, including massive volumes of non-military goods such as medical equipment, and construction supplies. Canadian companies have delivered goods and services like navigation and nautical systems, aircraft parts and chartered passenger flights, travelling canes, pharmaceutical manufacturing equipment, hoists and monorails, snow removal equipment, fabricated metals and surgical instruments to the U.S. DoD.
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Let us help you explore ways that the Government of Canada can help you win more international deals.