Sep 03, 2023
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10 Common Myths About Government Tenders Busted
TenderingClaris Zimbiti | Apr 16, 2023 | | |
If you've thought about bidding for government tenders, you may have heard some myths and misconceptions surrounding this.
Maybe you've been told that you need to know the right people, or that the lowest bid always wins.
But the truth is, many of these myths are just stories that don’t reflect reality.
In this blog post, we'll break down 10 common myths about government tenders and bust them wide open. I am going to teach you valuable insights and strategies to help you better understand the world of government tenders.
By the end of this post, you will understand the truth about government tenders which is crucial to success.
So, let's begin!
Table of Contents
Myth #1: Only big companies can win government contracts
Myth #2: Government contracts are too complicated and bureaucratic for small businesses to navigate
Myth #3: The lowest bid always wins the contract
Myth #4: You have to know someone in the government to win a contract
Myth #5: Government contracts are not profitable
Myth #6: Once you win a government contract, you are set for life
Myth #7: You have to win the tender on your own
Myth #8: Government is an easy quick money fix
Myth #9: We can treat government customers the same as commercial ones
Myth #10: We don't have to market to government agencies like we do in commercial sector
How do government sales work?
Many people fall for the misconception that only big companies succeed in this market.
Yes,it is true that some government contracts are best suited for big companies because of the scope and scale of the work. But there are still plenty of opportunities for small businesses to succeed in this space, as long as you are willing to put in the work.
In fact, did you know that the tender notices you see in the newspapers are just a small fraction of the business opportunities from the government?
These opportunities do not go through the tender but are purchased through Request for Quotations (RFQs). And with RFQs, it’s very simple. You don’t need to comply with so many requirements and write lengthy detailed bids.
Another thing is that the government often breaks up large projects into smaller parts called "lots" instead of giving out one big contract.
Each lot will have a specific scope of work, its own specifications and evaluation criteria.
For example, a construction project may be divided into lots based on the type of work (e.g., electrical, plumbing, concrete).
You can then bid on one or more of the lots, depending on your capabilities and areas of expertise.
This way, smaller businesses can compete for contracts that are a good fit for their capabilities and resources.
Myth #2: Government contracts are too complicated and bureaucratic for small businesses to navigate
Navigating government contracts may seem like a daunting task at first.
But with the right knowledge and support, you can absolutely navigate this complex process.
You can learn how the government procurement process works with the help of different resources that are available on the market.
First of all, the Procurement and Regulatory Authority of Zimbabwe (PRAZ) usually offers training and capacity building programs.
Their training calendar is published annually, so all you have to do is keep an eye out for it.
Also, you can utilize our Tendertube Advisory Services. We can take you from not knowing what to do, to helping you get tender ready and to win your first contract.
Myth #3: The lowest bid always wins the contract
This is a popular myth out there, but the reality is it’s not always the case.
Quality and value matters more than just the price tag. And smart government buyers know that.
In fact, the procurement process takes into account a lot of factors, beyond just the price.
These include things like technical expertise, past performance, and the ability to meet the requirements of the solicitation.
So don't just focus on being the cheapest.
But on developing a strong proposal that showcases your technical expertise, experience, and past performance.
Myth #4: You have to know someone in the government to win a contract
It’s a fact that having a network and building relationships can definitely help.
But, when it comes to government tenders, the procurement process is designed to be open and fair for all bidders.
Government agencies are required to follow strict regulations and guidelines. This is done to ensure that the procurement process is conducted ethically.
For example, there are rules around conflicts of interest and code of conduct for government officials and contractors.
Also, if a bidder believes that the procurement process was unfair or that it was shady, they can file a bid protest or complaint.
So instead of stressing out about connections, focus on what you can control.
Myth #5: Government contracts are not profitable
If you think that government contracts aren't profitable, then you're clearly not doing something right.
The truth is many businesses have found great success by securing government contracts, and you could too.
One thing to be clear about this is that profit margins are not as high as in the private sector. But they can still offer a valuable source of revenue for your business. Plus, they can help you grow and expand your operations.
Working on government contracts can also be a great way to build your reputation, develop new skills, and access new markets.
Myth #6: Once you win a government contract, you are set for life
Winning a government contract isn't a guarantee of long-term success.
The truth is winning a government contract is just the first step in building a relationship with the government.
While it's a great opportunity, sometimes it's not always smooth sailing.
There are a number of things to consider such as government budget cuts and political changes that could impact your contract. Also, government agencies' needs and priorities can change over time.
Renewal of contracts is not always guaranteed, and termination is a possibility.
So, to establish yourself as a trusted government contractor and secure future contracts, focus on delivering high-quality work on time within budget, developing your technical expertise, and building relationships with government agencies.
Let’s take a look at why it’s important to continue building a relationship with your government client, even after winning the contract.
There was an insurance company that had a three-year contract but failed to keep in contact with the procurement officer. As the contract was nearing its end, the company suddenly began calling non-stop, worried about losing the contract.
To avoid being in the same situation, don’t be complacent. Stay proactive, stay in touch, and strive to deliver excellent service to secure future contracts.
Myth #7: You have to win the tender on your own
The truth is, winning a tender is often a team sport.
Government agencies often require a diverse set of skills and expertise to complete a project. By forming a team with other small businesses, you can strengthen your capabilities making you more competitive.
Whether it's leveraging the expertise of key partners or assembling a talented internal team, collaboration is key to help you to bring the best value to the table.
So focus on building relationships with other small businesses and identifying areas of complementary expertise.
Always remember partnerships are key to success in this market.
Myth #8: Government is an easy quick money fix
Government contracts can be a great source of revenue. But they are not a quick solution for solving financial problems.
The reality is that it takes about 18-24 months to secure your first contract. So it’s a long-term investment that requires patience, dedication, and persistence.
The process of responding to a government tender, submitting a bid, and being awarded a contract can take several months or even years.
If you are looking for a quick cash flow, focus on selling to the commercial sector.
Myth #9: We can treat government customers the same as commercial ones
Treating all customers the same is like giving everyone the same medicine regardless of their illness.
Not all customers are the same.
Government customers have unique needs and requirements that you must consider when doing business with them. For example, they have specific regulations and compliance requirements that must be met.
Additionally, government contracts often have stringent requirements for delivering high-quality work on time and within budget.
To succeed in this market, it's important to understand the unique needs of government customers and tailor your approach accordingly.
Myth #10: We don't have to market to government agencies like we do in the commercial sector
Without effective marketing, even the best product or service can go unnoticed. This is so true even for government agencies.
Many small businesses just assume that by registering for PRAZ, government agencies will simply come to them for business.
The reality is you must actively market yourself to government agencies just as you would to potential commercial customers.
Government clients still need to be aware of the value of products and services that you offer. By doing so, you can increase the visibility of your company.
Final Thoughts
Winning a government contract isn't rocket science. It doesn't require special connections. All you need is a good understanding of the rules of the game and to challenge myths and misconceptions surrounding government tenders.
Although it can be a profitable revenue stream, winning government contracts requires careful planning, strategy, and hard work.
By taking the time to understand the process, building relationships, and positioning yourself competitively, you can increase your chances of success and grow your business.
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