Are you a foreign firm looking to conduct business with the United States government but aren’t sure where to start?
Each year, the United States spends more money purchasing goods and services than any other country in the world, amounting to trillions of dollars. Bidding opportunities with public agencies are available at all levels of government, including federal, state, local, municipal and special districts. Most government agencies welcome bids from any firm that is qualified to compete for the opportunity to win the contract, regardless of whether they are based in the U.S. or a foreign country.
According to the Government Accountability Office (GAO), the United States offers more bidding opportunities to foreign companies to compete for government business, specifically from the 57 countries that are party to international trade agreements with the U.S.
According to the GAO, in 2010 the U.S. spent $837 billion on GPA-covered procurement, more than double what the next five largest parties of the GPA (the European Union, Japan, South Korea, Norway and Canada) spent combined (a total of $381 billion in 2010).
Of the top 100 firms who have been awarded contracts with the U.S. government, around 35 are headquartered in other countries, including the United Kingdom, Sweden, Ukraine, South Africa, Italy, Belgium, Switzerland, Austria, Japan, Saudi Arabia, Croatia, Israel, Singapore, Norway, Brazil, France, Denmark and Australia. Britain’s BAE Systems is regularly listed as one of the top 10 contractors for the United States, as measured by contract award amounts: in 2011, BAE won a $6.92 billion contract to supply the U.S. government, making it the 8th largest government contractor that year.
What to do Before Bidding on U.S. Government Opportunities
Contracting in the public sector is a bit different from the private sector. Public sector contractors in the United States are subject to more rules and regulations and companies that are interested in bidding on government contracts must follow U.S. law at every stage of the bidding process; this is true for any company, whether domestic or international.
The first thing a foreign firm must do in order to start bidding is obtain a NATO Commercial and Government Entity (NCAGE) code. This code is assigned as part of the NATO codification system and is required when registering a foreign firm with the System for Award Management (SAM), which is mandatory for companies that want to bid on U.S. federal contracts. Before registering with SAM, companies also need to obtain a DUNS number, another requirement for any firm bidding on any type of government bid in the United States.
In order to obtain an NCAGE code, your company will first need to register with the NATO Support and Procurement Agency. To register your firm, use the NATO Codification Tool website where you will be prompted to create a sign in and be directed to request a NCAGE code by clicking the “Request New” button. Once you complete the process of requesting an NCAGE, the system will then validate the code and you will receive an email to verify your information and the code. This process could take up to ten business days.
After the code is validated you can then register with SAM, but again, validation could take an additional ten days. Once you have received all your codes and have registered your business through the proper channels, you can start bidding on U.S. government opportunities.
Tips on Bidding for Foreign Companies
- Know your customer – Your country may have its own regulations and laws that apply to firms that provide goods and services to a foreign government, but remember that you must also follow U.S. law when selling to the United States. The best way to find out what the rules and regulations for working with the U.S. government are is by becoming familiar with the Federal Acquisition Regulation (FAR). FAR explains the procedures, laws, regulations, etc. that apply to both the purchaser and seller. It’s a set of guidelines to help both parties participate in a fair, open and transparent competition.
- Go after subcontracting opportunities – If you’re new to bidding, it’s a good idea to start out as a subcontractor if an opportunity allows for it. Subcontracting allows you to get your feet wet in the world of bidding on U.S. government opportunities without having to shoulder most of the risk. Subcontracting also allows you to gain experience and knowledge before going out on your own and becoming a prime vendor.
- Establish a presence in the U.S. – Although companies will not be disqualified from bidding for not having some aspect of their operations based in the United States, it can certainly be helpful to have a presence in the U.S., whether it’s a separate branch of the company or an employee who can take care of U.S. operations. Having someone ‘on the ground’ in the U.S. will be helpful if your company wins a contract.
- Look for bids in your own country – Since the United States government also operates in foreign countries, there may be bid opportunities available in your own backyard. In these cases, not having to pay to ship products to the U.S. could cut your costs considerably, and shorten the time frame for products to arrive to their destination.
Working with the U.S. government can be a great opportunity to build relationships and establish rapport with buying agencies the United States. Winning a contract to provide goods or services to agencies in the U.S. can also lead to more opportunities if the U.S. happens to need the same goods or services provided in the foreign firm’s own country or surrounding countries. Remember to prepare your company for working within the United States by becoming familiar with the rules and laws established for government bidding. If your company can comply with the contract terms and is registered with the authorities, there’s no reason for you not to go after bid opportunities in the United States.
Danielle Calamaras | BidNet.com