Canadian firms missing out on government contracts, research shows
Only small fraction of homegrown companies at receiving end of $20B in federal spending
New research out of the University of Ottawa's Telfer School of Management shows only a meagre fraction of small- and and medium-size companies in Canada are doing business with the federal government.
Emerging businesses have complained for years that it's almost impossible to sell goods and services to government, and have lobbied for changes making it easier to crack the market.
The latest study, initiated by the federal department in charge of procurement, puts real numbers on those complaints, according to Barb Orser, a professor in growth enterprise at the university and a co-author of the report.
"The federal government is a huge opportunity for contracting, with over 20 billion dollars in spending. Less than 10 per cent [of smaller Canadian companies] are doing business with the federal government," said Orser.
Nor do most businesses consider the federal government as a potential client, Orser said.
"Eighty per cent of those who are not doing business with the federal government do not see them as a [potential] client. So that's a huge lost business opportunity."
Range of opportunities
Opportunities for Canadian companies range from catering to construction, and from manufacturing to information technology products and services.
That's a huge lost business opportunity.- Barb Orser, University of Ottawa
The study found that the small- and medium- size companies that did secure contracts tended to be older, larger, tech-based and led by men.
The federal Office of Small and Medium Enterprises was set up to help and encourage Canadian companies to seek out federal contracts, but Orser said many businesses don't even know the office exists.
Orser said many emerging firms aren't aware of the contracting opportunities that exist, and those that try to drum up federal business are too often frustrated by the long, complex procurement process.
Minister promised change
Public Services and Procurement Canada is well aware of the issues.
The government commonly chooses its business partners from among huge multinationals including IBM, CGI and Hewlett Packard, making it tough for the little guy to get a foot in the door.
"We're here to fix that," Foote told a business audience in Ottawa in March. "Procurement needs to be faster and focused on service delivery. It also needs to be about more than just buying: it can help drive forward social and economic priorities."
Compiling the data will help the government figure out how to do better, according to Orser.
"The key takeaway, at least at this initial point, is there's need to communicate to small business owners that the federal government is open for business," she said.