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Date: 2016-08-12

Your Next Customer Could be a Foreign Government

Ask most small and midsize businesspeople what they need in order to begin exporting to other countries or expand beyond the one or two markets they export to now and they’ll tell you:  “Introduce me to the buyers!”

There are all kinds of ways to find buyers, and we continue to talk about many of them in WPG sponsored blogs like this one.  One source that doesn’t get enough attention is multilateral non-government organizations and foreign government themselves.  Let’s look at the latter source.

Governments including that of the U.S. spend many billions of dollars each year purchasing things for their far flung operations.  Perhaps you’ve heard about gold plated toilet seats, “Bridges to Nowhere,” and so forth.  Most purchases are mundane and involve thinks like luggage equipment for new airports, kit for the military, IT equipment, training services for bureaucrats and much more.  Having a foreign government as a customer is usually a good thing, mainly because they have money and tend to pay bills.  Another is the vast array of needs and purchasing power.

Now you might conclude that such governments will always favor their own producers and have in place the equivalent of Buy America or Buy Honduras. In reality, especially in countries that have trade agreements with other countries, foreign companies are supposed to be treated like local companies. In practice it doesn’t always work like this.  But the principle is now well established and despite imperfections there’s no doubt that foreign companies are getting more of this business, either for themselves or in partnership with a local enterprise.

The problem is not one of barriers, but that foreign firms do not see government procurement as a legitimate sales and marketing channel.  In thinking this way, these companies are leaving money on the table--a lot of money.

Steps in the process

This is not to suggest that getting an agency of a government that is not your own to award you a contract is easy.  First, you have to find the opportunity that fits your capabilities. Then you have to respond to the Request for Proposals.  Then you have to monitor the process, preferably with the assistance of representatives of your government’s embassy in that country. Then you need to learn what other companies are bidding so that you can contact them for a subcontract if they win and you don’t. Finally, if you get a piece of the business, you have to perform and perform well.

If at any stage of the process you feel that you are not being treated fairly, you can complain to your country’s government and they can investigate and hold the purchasing entity accountable. Here’s a video about one such case involving a procurement by the Chilean government for earthquake related construction materials and consulting.

The benefit of pursuing and winning some of this business is that you increase your sales. The less obvious benefits are that you get experience working in another business culture and that you meet people both in and out of government in that country who can help you win additional business.

Below are government Websites or links to them that provide information on upcoming tenders for the purchase of a wide range of goods and services. For U.S. companies all of the countries except for most of Africa, Qatar, and the entire EU have free trade agreements with the U.S. and therefore cannot by law treat U.S. companies different than local ones. That’s a big leg up and an unappreciated benefit of FTAs in general.


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