What Canadian businesses should know about G2G contracting
G2G contracting is a useful business tool to help connect businesses with foreign governments. However, there are things that government to government (G2G) contracting can and cannot be. In this blog, we review some of the facts and misconceptions with Canada’s approach to G2G contracting.
Government to government (G2G) contracting, also known as intergovernmental contracting, refers to a agreements between government entities for the purchase of products, services or solutions. It is often used for defence, national security and public work contracts, such as the purchase of aircrafts, the construction of airports, and investments in clean technology and water sanitation systems.
The G2G contracting approach is unique in that instead of having an agreement with a company, a government entity has a commercial agreement with another government entity. For businesses, this contracting approach offers reduced political, business, bribery, corruption and payment risks. It also elevates the profile of commercial opportunities.
Canada’s unique approach to G2G
Because Canada’s G2G contracting model is unique, Canadian businesses often have questions about what it can and can’t do for them. Here’s a handy at-a-glance explanation:
|G2G CONTRACTING IS…||G2G CONTRACTING ISN’T…|
For exporters of all sizes in a wide range of sectors.
We work with a broad range of Canadian businesses whose products or services are needed by foreign government buyers in sectors ranging from clean technology and ICT security to infrastructure, aerospace and defence.
We require the companies we work with to have been in business for at least two years and demonstrated ability to deliver on international contracts.
We will work with small companies just starting to take advantage of trade opportunities outside of Canada but having a balance sheet and some business track record is key.
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Beneficial to exporters and buyers alike.
As an exporter, your risk is managed because we help you navigate complex procurement procedures and get you talking to the right people.
Your buyer’s risk is lower because we’ve already confirmed you as a supplier for whom we are willing to extend a guarantee of contract performance.
For just one level of government.
Some people think G2G means national governments only, but we negotiate deals on behalf of Canadians with foreign governments at all levels — national, state/provincial and municipal — and with government-owned enterprises such as utilities. If it’s a government project in a country we do business with, we’re interested.
Ethical and socially responsible.
As a Canadian Crown corporation, CCC respects trade obligations, laws and regulations both here at home and the countries in which we do business.
We work with exporters who have the same standards. Our projects provide a range of social benefits including local employment, training, knowledge transfer and other types of community engagement.
An end run around public procurement processes.
While foreign government buyers may bypass competitive tendering processes when they have urgent requirements, our G2G approach respects local procurement laws and practices.
We work with governments to find a path to a G2G contract that all parties see as a commitment to strengthening bilateral relations.
Value for money.
The fees we charge cover our effort and costs related to the management and execution of a contract as well as any up-front business development costs.
Fees are line with the contract value and the risk and nature of the transaction and included in the contract we negotiate with the foreign buyer.
Contracts with the United States Department of Defense (U.S. DoD) are not subject to a CCC fee per the Canada–U.S. Defence Production Sharing Agreement (DPSA).
An international marketing or financing program.
While we help you connect and negotiate with buyers abroad; we aren’t your agent or representative. We don’t organize trade shows or junkets: our focus is purely on doing deals.
At the same time, CCC is not a bank. If you need financing, we will happily connect you with one of our partners — including EDC and other potential sources — to help you put a competitive term sheet in front of the buyer.
Every year we help Canadian companies win millions in contracts with foreign governments. Download our guide to learn more about our approach, how we prepare you, and priority sectors.
Canada’s G2G services
Doing business with foreign governments
Canada and CCC offers two G2G services. Our International Prime Contractor program is a fee-based program where we work with Canadian businesses to identify, validate and submit G2G proposals with national, state and municipal government buyers.
In these projects we advocate for the Canadian business and their proposal at the government level, seek the right terms and conditions for contract success, and troubleshoot any contract management and financial administration issues.
Doing business with U.S. military
The second G2G service we offer is the U.S. DoD Prime Contractor program. This service is free and supported by both the Government of Canada and the U.S. Government.
This program helps Canadian businesses navigate the complex and strict process of selling products, services and innovation to the U.S. military. We have relationships with over 20 U.S. military procurement offices and supported over $7 billion in trade between Canada and the U.S. military between 2012 and 2022.
The program is not just for the sale of traditional military goods. The U.S. military also buys things like navigation and nautical systems, chartered passenger flights, travelling canes, pharmaceutical manufacturing equipment, snow removal equipment, and surgical instruments. The U.S. DoD also supports innovation through various programs, including the Defense Innovation Marketplace.
Have a G2G Opportunity?
If you are exploring a procurement opportunity with a foreign government, looking to grow your sales to the U.S. military or looking for advice on how to scale internationally, contact us.
This post was last updated on August 18, 2022.
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