Small business feels shut out of government procurement

OTTAWA, June 23, 2011 /CNW/ - Attempts by small and medium sized enterprises (SMEs) to access federal procurement are consistently hampered by a confusing application processes, excessive paperwork and a complex system of rules. According to a report by the Canadian Federation of Independent Business (CFIB), the barriers to federal procurement are resulting in small business suppliers feeling shut out of many opportunities.

Sixty per cent of SMEs in sectors most likely to sell to the federal government either chose not to sell to the federal government or felt it was too difficult and not worth the effort. Among the other main obstacles for small businesses was the complexity of the bidding process, the difficulty in determining what the government wants, and the amount of paperwork. "Dealing with federal tenders is too painful to bother. If I spent all my time responding to the silly amounts of paperwork they require just to be "qualified" to bid, I would have gone bankrupt a long time ago," said one CFIB manufacturing member.

"One of the biggest challenges facing small businesses over the past few years is the "bundling" of contracts into one massive contract and awarding it to a single firm. Government seems to believe that this will save money, yet there is very little proof that this is the case. These contracts can reduce competition for government work by smaller businesses, potentially leading to higher costs to taxpayers in the long run," stated Louis-Martin Parent, CFIB policy analyst for Ottawa and report author.

To ensure that small businesses can fully and fairly participate in the procurement process, CFIB recommends the following measures:

  • Rethink the procurement bidding process from a small business perspective, and enhance bidding flexibility.
  • Review the practice of "mega-contracts" to ensure maximum competition and savings.
  • Make the procurement process an integral part of any red tape reduction initiative.
  • Enhance communication between the bidder and the end user.

"To succeed in opening up procurement for current and future enterprises and to get the best value for taxpayers' dollars, procurement officials need to address these problems immediately," Parent concluded.

As Canada's largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 108,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.


For further information:

Louis-Martin Parent at 613-235-2373 or via email at To read Big Opportunities, Bigger Challenges please visit 

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