What is Government to Government (G2G) contracting
In this blog we’ll examine CCC’s signature solution for bringing qualified Canadian companies to government buyers around the world: the government to government (G2G) contracting service.
How G2G works
The government to government (G2G) contracting solution is CCC’s signature service to help grow Canada’s exports by bringing qualified Canadian businesses to government buyers around the world.
G2G contracting significantly reduces the risks associated with international procurement since every contract signed by CCC has the legal effect of being signed in the name of the Government of Canada. In addition, every company that works with CCC has been evaluated technically, financially and managerially to confirm its ability to successfully deliver projects. This provides the foreign government buyers with not only the assurance that the contract will be delivered in accordance with the agreed terms and conditions, but it can also create attractive conditions for project financing.
Acting as Prime Contractor, CCC takes on all contractual matters, performance oversight and financial administration of the contract. As well, CCC’s participation in contracts reduces the risk of unethical business practices that can hinder procurement effectiveness. CCC is also committed to environmental, social and governance (ESG) best practices, as an integral part of supporting inclusive trade and applying responsible business conduct in all its business dealings.
Best use of G2G
The G2G contracting solution can be used at any time, for any type of procurement. However, some foreign government procurement markets are more conducive to G2G than others. Markets with urgent and compelling needs (i.e., emergency response or national security procurements), lack of government procurement capacity, issues of bribery and corruption, and failed competitive procurement processes are most favourable to G2G contracting.
G2G contracting is a perfect vehicle for a buying government that sees value in partnering with the Government of Canada (through CCC), to deliver an important project in an expeditious timeframe and requires the assurance the project will be delivered successfully. G2G contracts may also create an opening for governments that need a partner in order to attract financing for a project.
G2G contracting is a low-risk way for sovereign governments at the federal, state and municipal levels to buy goods from foreign companies. Many government agencies offer this service to minimize the political, business and payments risks exporters can face when doing business with a foreign government. It also greatly reduces the procurement contracting risks faced by foreign government buyers. In this article, we will review how we as the Canadian Commercial Corporation (CCC) approaches G2G contracting and how it benefits both Canadian companies and foreign government buyers.
Global government procurement is a $3 trillion dollar market, and countries hit hard by the COVID-19 pandemic are committed to spending to get their economies back on track. But beyond the dollars, there are plenty more reasons why government procurement is an attractive market opportunity for Canadian exporters. Selling to governments is appealing because the deals tend to be secure and reliable. That’s especially true with the help of CCC, which elevates commercial deals to a government to government (G2G) contract. The map below shows the reach of our organization where we have contracts, opportunities and MOUs.
Many Canadian companies and government buyers have benefited from G2G contracts through the CCC. Here is a sample of some of our recent G2G contract announcements:
- Aecon and the Bermuda International Airport Redevelopment Project
- Gastops and U.S. Coast Guard Cutter POLAR STAR
- JV Driver and Ghana’s new port terminal
- De Havilland Aircraft with Biman Bangladesh Airlines
- Cascade Aerospace with the U.S. Department of Defense (U.S. DoD)
- Festo and skilled workforce development in Peru
- OSI Maritime Systems and Allied Naval Force
- Bell Textron and Montenegro Air Force
- Argentina’s Federal Police for Viking
- Coulson Aircrane and Bolivia’s firefighting service
The majority of government to government procurement processes fall into one of these tendering categories (some countries may use different names for these):
- Open tendering – In this type of process the contracting government will put out a request for proposal and anyone can bid;
- Two stage procurement– This is similar to an open bidding process however potential bidders must meet initial set criteria before they’re invited to bid
- Restricted Procurement: Only a small number of vendors are invited to bid on the contract.
The contract stages are as follows:
- Contract notice – This is how a government procurement officer formally informs all potential suppliers about a public sector contract opportunity. It includes enough information for the bidding company to determine whether to bid for the contract opportunity or not
- Pre-selection process – If the process includes a pre-selection phase, the bidding company must submit the requested information as indicated to qualify for bidding.
- Bid submission – In this phase, the bidding company submits all the information and documentation as indicated in the tender documents. The bidding company should ensure to follow all instructions precisely, provide all elements of the submission in the format and language specified, and submit the bid package before the deadline.
- Contract award – When the bidding company is selected, they will move into final negotiations or contract signing with the government buyer, and then deliver the product or service.
When a Canadian bidding company identifies a contract notice that they would like to bid on, if the opportunity is greater than $10M for international contract opportunities and $250,000 for U.S. DoD opportunities, and they have prior experience exporting their goods and services, they can contact us to see if the opportunity would qualify for a government-to-government contracting opportunity.
Due diligence process for G2G contracts
We help Canadian exporters gain access to foreign procurement markets through a government to government contracting approach. When assessing the capabilities of the Canadian exporter, we evaluate the following during the onboarding process:
- Does the Canadian company have sufficient technical expertise to meet the requirements of the contract?
- Does the Canadian company have capacity to undertake the contract? This may involved site visits.
- Is there an alternate source of supply for the product or service?
- Is the management team at the Canadian company capable of carrying on your business over the life of the contract?
- Is there a project team at the Canadian exporter capable of managing the contract?
- Does the Canadian company have experience in managing successful export contracts in markets with risk profiles similar to that of the proposed contract?
- Does the Canadian company have an understanding of the risk of insolvency during the contract period?
- Is there adequate capacity for the Canadian company to meet the contract’s cash-flow demands?
What is the ability of the Canadian company to handle scope changes and cost overruns commensurate with the risk of the project?
How CCC helps to win G2G contracts
CCC offers the following services to facilitate and ensure the success of the procurement deal.
- Before the negotiation – Your CCC representative meets with the Canadian company to review their draft proposal and confirm alignment on the proposed terms and conditions. The aim is to come to a strong starting position that both organizations are comfortable with.
- During the negotiation – During this phase, the Canadian exporter speaks to the technical details of the solution while the CCC facilitates the contract negotiations. These can include everything from advising on pricing strategies, contract guarantee instruments and contract terms.
- After the negotiation – Once the contract with the buyer is signed, a sub-contract between the Canadian exporter and the CCC is signed. The CCC, as the prime contractor, will oversee the execution of the contract. This may include the transfer of funds to ensure transparency, compliance to anti-corruption policies, and manage any issues that arise. The Canadian exporter handle any technical issues.
CCC understands the challenges government buyers face when making acquisitions internationally. Drawing on decades of experience, CCC offers a customized government to government approach to meet specific project needs, regardless of complexity. As Prime Contractor, CCC stands behind every G2G contract with the full assurance of the Government of Canada. CCC’s responsibilities as Prime Contractor may include:
- Establishing a memorandum of understanding (MOU) with the relevant government ministry
- Proposing a Canadian solution to meet the needs of the government buyer.
- Establishing Services Agreements with the Canadian company.
- Defining the requirements for the Canadian company to pursue a government procurement bid.
- Submitting a proposal with a Canadian company with technical, managerial and financial strength.
- Negotiating an international contract and undertaking the role of Prime Contractor.
- Issuing a Domestic Contract to the Canadian company.
- Passing all contractual obligations of the international contract.
- Managing contract performance and administering funds from the government buyer.
- Providing a Government of Canada guarantee that the contract will be performed in accordance with its terms and conditions.
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.
Where to find G2G opportunities
Many of the major government procurement opportunities are posted on online portals for bidding companies to review, register and respond. To help Canadian exporters access more global opportunities and to help government buyers receive bids from Canadian companies, we have created our own portal called the Global Bid Opportunity Finder (GBOF).
Our portal is one of the largest sources of government procurement opportunities exclusively for Canadian companies. The single sign-on portal provides access to bid opportunities from over thirty sources in over 200 countries. Five thousand new opportunities are added to the portal daily.
Examples of portals whose procurement opportunities are aggregated into GBOF include:
- U.S. Government including U.S. Department of Defense (DoD)
- Public Services and Procurement Canada
- United Nations Development Programme
- The World Bank
- Contracts Finder (UK)
Access to GBOF is free to all Canadian companies.
Have a G2G Opportunity?
If your company and export opportunity checks several of the boxes below, the CCC can help you be successful.
If your company…
- 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…
- Is relatively large (1) >$250,000 for U.S. DoD opportunity and >$10M for non-U.S. DoD opportunity
- Will lead to a larger deal that will get attention at senior levels of the buying government
The above are guidelines, so be sure to contact us to discuss the specifics of your export opportunity with one of our deal experts.
You can also browse our Global Opportunity Finder which is available exclusively for Canadian companies to view upcoming global government procurement bid opportunities from over 30 sources, in over 200 countries. Register to view the opportunities available to you.
This post was last updated on April 11, 2022.
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