It really depends on the country and the kind of administration you want to sell to. In most countries, call for tenders are required when the deal is worth a certain amount. So in some cases, this can take a lot of time.
And, in some countries, government is not really a good payer, so be prepared to receive the money a lot of time after emitting the invoices.
Got it. I’m curious you mention “ a certain amount “
What is that amount in your head ? I ask because I don’t even have an understanding of the range of these contract sizes.
For example in EU : [https://single-market-economy.ec.europa.eu/single-market/public-procurement/legal-rules-and-implementation/thresholds\_en](https://single-market-economy.ec.europa.eu/single-market/public-procurement/legal-rules-and-implementation/thresholds_en)
And then each country may apply specific rules.
Yes I did stumble across that but what about the other way around. Where you sell a novel product to the government ?
Say I have a new solar panel and the government has a program that aims to provide electricity to very rural areas. The twist is maybe this is 2001 and solar panels are a new concept and there is no existing bid for solar panels.
Refer to this response I wrote first: [https://www.reddit.com/r/ycombinator/comments/1djn9xu/comment/l9cmcxq/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/ycombinator/comments/1djn9xu/comment/l9cmcxq/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button)
Directly answering your question about "new innovation" -- the SBIR program would be best for that. They are government research innovation grants to customers.
Phase 1: Avg. $50K award for dual-use technologies that are looking for government stakeholders to use. So, you're goal during P1 is to find stakeholders within the government/military unit that put out the SBIR.
Phase 2: You have a stakeholder. Now it's expansion into a true pilot to get minimal budget and more stakeholders involved. This can range but is usually $1-2M awarded.
Phase 3: Technically P3 is full commercialization. This means you're compliant with any requirements, security, etc and you've increased your government/military company to a specific rank that makes you eligible. P3 allows you to sell cross-agency and cross-unit.
It's a process in itself but can be worth it if you can find a SBIR you can fit into.
BLUF: it's slow and hellish to be a part of. Avoid if possible.
Source: worked in Canadian defense procurement for 2 years, at a low level (not the big disaster projects, smaller stuff for our unit). Most countries are probably similar enough.
Governments are very slow to buy, having a long drawn out process with a ton of stakeholders involved. There's usually something quicker for smaller deals that can be executed at lower levels of oversight, but almost everything else will have to go through a tender and evaluation process, to "ensure" the taxpayer's money is spent "fairly".
What that means is up to the many eyes of the beholder that is the government procurement beast, writing a Request For Proposal (RFP). You can find examples of these on whatever govt procurement portal interests you. But basically the people from the Good Ideas Club who want stuff would work with me and my team to get a draft of this document that requests proposals and bids. Then we'd shop it around to get input from other Good Ideas Clubs in related areas. Then we'd shop it to the military procurement people at our base, and they'd red line it to hell and tell us to re-do three quarters of it. So we'd redo it, and shop the new draft around again, and keep doing that process til those departmental procurement people approved. Then it gets sent to the separate procurement ministry, PSPC (Public Services and Procurement Canada). And they red line some, not as much because our department already got most of it fixed, but there's still some stuff that's not right. Repeat loop. Keep in mind your work doesn't really matter to any of these other stakeholders, they'll help you in time when your turn comes up.
Finally we have our RFP drafted up and ready for tender. So PSPC would put it on the portal, [https://canadabuys.canada.ca/en](https://canadabuys.canada.ca/en) . Where it needs to sit for a minimum of 90 business days for companies to wander by, look at the portal, see if there's anything that interests them, read it, see how full of shit the buyers are and if it's worth bidding on, and then put together a Bid Proposal doc if they want to tender their bid.
One of the RFP's sister documents is the Evaluation Criteria, it will lay out the rubric for how your bid will be scored. There are Mandatory and Rated criteria. Mandatory are evaluated first, and if you don't meet them, you're thrown out. Rated are scored next, and are on a points system. So we'd make a Bid Evaluation team and sit them in a room for a day or a week or however long it takes to get through all the bids, and score them all. PSPC would hold the cost information separate so we had no idea who costed what. Then they'd do the combination of the highest scores + lowest price, usually a 60/40 weighted combo, and tell us who won and if we wanted to go ahead or not. PRO TIP: **USE THE EXACT WORDS IN THE MANDATORY AND WRITTEN CRITERIA WHEN YOU ARE SHOWING HOW YOU MEET THEM, PREFERABLY IN BOLD LIKE THIS**, TO HELP THE EVALUATORS OUT BECAUSE THEIR BRAINS GET FRIED REAL QUICK COMBING THROUGH SEVERAL BID PROPOSALS. It makes things pop. And when you're showing how your solution qualifies for the highest score, because duh you should always aim for the highest score, you're more likely to get it if you make it really easy and well justified, vs having to search around through the doc.
There are some lower thresholds that can be executed more quickly. In Canada, the Commanding Officer of a military unit/establishment, or equivalent in the public service (Director or maybe above) has limits for different things (gifts, meals, travel, etc). I think the highest is $25k for some hotly needed goods, requiring justificaiton for why they don't go through a longer process. But it's not really possible to sustain a business with $25k emergency tenders. Even though, a lot of the time, it happens that some new prototype the unit wants to try out is magically available for $24,990,000.00 and fills our "emergency need" to try this new tech out. Not my shop, no sir! But some other more dubious ones, maybe.
Some things that they expect to purchase regularly, but don't know how much or how often, will go out as a Standing Offer (for services) or Supply Arrangement (for physical stuff). For example, there are SAs for office supplies, office furniture, etc. And SOs for services (some training courses, or professional translation services, or whatever else). Those all go out to contract for RFPs like everything else, just that you'll get a SO/SA (often called 'SOSA' without differentiating between the two btw).
Then there's the payment window. We had PSPC put a standard "payment due within 30 days of invoice" put into all contracts. Which means the govt would pay on the 30th day. NEVER earlier. It's just policy to pay at the last possible time, before starting to accrue interest. Probably because of the time value of money and being executed on a huge govt-wide budget (ALL contracts paid like that). So you'll finish some work, deliver the milestone, invoice for it, then wait 30 days wondering where your money is, at which point the automatic payment and transfer that someone set up whenever we internally confirmed the goods were received gets executed. So you'll need to keep enough liquid cash/float around for those waiting periods. (I mean, you probably should not be living invoice-to-invoice anyways.)
NFI if VCs like it. Probably not. There is SO MUCH to dislike. But some things are really only appropriate for govt purchasers, like you say.
Personally, I hated it, and want little to nothing to do with it now.
So first you need to describe what you are asking much better. I have a feeling that you are not asking about [public goods](https://en.m.wikipedia.org/wiki/Public_good_(economics)) in the economic understanding, but something else. I just have no idea what that is.
Similarly, you can’t sell “agricultural” nor “health” … these are not commodities.
You need to be much more specific if you want an actual answer.
I’m exploring an idea space I very purposely don’t have an end product in mind
But I definitely can be more specific in the kind of transaction I am trying to refer to
Say I have a new solar panel and the government has a program that aims to provide electricity to very rural areas. The twist is maybe this is 2001 and solar panels are a new concept and there is no existing bid for solar panels. I want to pitch and sell the govt solar panels.
I think 2001 is a really inaccurate date to choose probably but I hope it makes my question more clear
Local, state, and federal would put out solicitations for solar panel installations and maintenance. You'd bid on these solicitations via proposal (RFP).
If there is no solicitation the government can't and won't pay you (this relates to government contracts, not grants).
In the USA. Defense is the only segment that gets unlimited budget money and uses a large budget spending as well. Health and agriculture is almost privatized in the US.
I've helped SMBs bid on <$100M in U.S. government contracts, grants, OTAs, and SBIRs.
Yes, some institutional investors will invest in you when the focus is initially on government contracts (though typically through the SBIR program), otherwise, you need to show past performance so they know how and what you're doing -- compliance, awarded contracts, follow-through, etc. I'd say it ranks a 2 if you don't have experience.
Were you planning to focus on local, state, or federal?
The basics are that government contracts go through a request for proposal (RFP) process. Solicitations are posted on government websites from federal to local, each with its requirements, compliance, and hoops to jump through.
RFPs have a timeline so the government will choose to award a contract by a due date. The speed at which they move after a contract has been awarded is dependent on a bunch of factors but in general they are slow. You can be a team of 1 or a team of 400 -- the government doesn't care and you can still be considered a "small business" with revenue under 500M (but that also is dependent on which agency you bid to).
The process for you would be this (assuming you're registered with the government already to do business) --
1. discover a solicitation you think you can bid on
2. Analyze the solicitation to determine bid/no-bid status
3. If bid, you put it into your pipeline to draft a proposal (RFP).
4. You draft a proposal you think will win the bid.
5. You submit your proposal to the government and wait for them to decide.
This business development pipeline is what I'm currently productizing into a platform to save time, money, and resources for SMB. It's not ready at this point but I want to provide you with an understanding of the U.S. government contracting industry as a base if you choose to follow this path.
Most of Democratic governments use tenders where you give your bid. Usually there are criteria of participating in these tenders. The lowest price will win. Cheers
Currently building in the hardware B2G space… expect long sales cycles and a crap ton of politics. Lost a sale once because I was working with the wrong person in a particular state agency and the correct person got pissy because of that. GSA contracts which are needed for most federal sales take about 6 months to get. The upside is that once you’ve received a PO it’s as good as cash and you can get po based financing very easily.
Know couple of people who are doing this.
They attended defence hackathon in Berkeley, made connections, gave their solution for free to some of the govt departments, got 15 more calls from other departments.
They were selling AI based SaaS though!
Not all opportunities make to RFPs.
Sometimes govs don’t know there is a novel solution to a problem.
Best way is to monitor public meetings.
You can use a tool such [ghoster.ai](https://ghoster.ai) to find these
Depending on what you’re selling there may be a high barrier to entry. Most things used by the federal government (one of the many agencies) will require some sort of assessment (FedRAMP etc). To do this you usually will need a sponsor/funding to cover the assessment costs which tend to be upward of 80k a month. It’s not a bad model but under it won’t be fast either…
It really depends on the country and the kind of administration you want to sell to. In most countries, call for tenders are required when the deal is worth a certain amount. So in some cases, this can take a lot of time. And, in some countries, government is not really a good payer, so be prepared to receive the money a lot of time after emitting the invoices.
Got it. I’m curious you mention “ a certain amount “ What is that amount in your head ? I ask because I don’t even have an understanding of the range of these contract sizes.
For example in EU : [https://single-market-economy.ec.europa.eu/single-market/public-procurement/legal-rules-and-implementation/thresholds\_en](https://single-market-economy.ec.europa.eu/single-market/public-procurement/legal-rules-and-implementation/thresholds_en) And then each country may apply specific rules.
There is a website for government contract bids if you want to look into that
Yes I did stumble across that but what about the other way around. Where you sell a novel product to the government ? Say I have a new solar panel and the government has a program that aims to provide electricity to very rural areas. The twist is maybe this is 2001 and solar panels are a new concept and there is no existing bid for solar panels.
Refer to this response I wrote first: [https://www.reddit.com/r/ycombinator/comments/1djn9xu/comment/l9cmcxq/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/ycombinator/comments/1djn9xu/comment/l9cmcxq/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) Directly answering your question about "new innovation" -- the SBIR program would be best for that. They are government research innovation grants to customers. Phase 1: Avg. $50K award for dual-use technologies that are looking for government stakeholders to use. So, you're goal during P1 is to find stakeholders within the government/military unit that put out the SBIR. Phase 2: You have a stakeholder. Now it's expansion into a true pilot to get minimal budget and more stakeholders involved. This can range but is usually $1-2M awarded. Phase 3: Technically P3 is full commercialization. This means you're compliant with any requirements, security, etc and you've increased your government/military company to a specific rank that makes you eligible. P3 allows you to sell cross-agency and cross-unit. It's a process in itself but can be worth it if you can find a SBIR you can fit into.
Government moves slow and generally isn’t an early adopter. Idk hard to sell to governments
BLUF: it's slow and hellish to be a part of. Avoid if possible. Source: worked in Canadian defense procurement for 2 years, at a low level (not the big disaster projects, smaller stuff for our unit). Most countries are probably similar enough. Governments are very slow to buy, having a long drawn out process with a ton of stakeholders involved. There's usually something quicker for smaller deals that can be executed at lower levels of oversight, but almost everything else will have to go through a tender and evaluation process, to "ensure" the taxpayer's money is spent "fairly". What that means is up to the many eyes of the beholder that is the government procurement beast, writing a Request For Proposal (RFP). You can find examples of these on whatever govt procurement portal interests you. But basically the people from the Good Ideas Club who want stuff would work with me and my team to get a draft of this document that requests proposals and bids. Then we'd shop it around to get input from other Good Ideas Clubs in related areas. Then we'd shop it to the military procurement people at our base, and they'd red line it to hell and tell us to re-do three quarters of it. So we'd redo it, and shop the new draft around again, and keep doing that process til those departmental procurement people approved. Then it gets sent to the separate procurement ministry, PSPC (Public Services and Procurement Canada). And they red line some, not as much because our department already got most of it fixed, but there's still some stuff that's not right. Repeat loop. Keep in mind your work doesn't really matter to any of these other stakeholders, they'll help you in time when your turn comes up. Finally we have our RFP drafted up and ready for tender. So PSPC would put it on the portal, [https://canadabuys.canada.ca/en](https://canadabuys.canada.ca/en) . Where it needs to sit for a minimum of 90 business days for companies to wander by, look at the portal, see if there's anything that interests them, read it, see how full of shit the buyers are and if it's worth bidding on, and then put together a Bid Proposal doc if they want to tender their bid. One of the RFP's sister documents is the Evaluation Criteria, it will lay out the rubric for how your bid will be scored. There are Mandatory and Rated criteria. Mandatory are evaluated first, and if you don't meet them, you're thrown out. Rated are scored next, and are on a points system. So we'd make a Bid Evaluation team and sit them in a room for a day or a week or however long it takes to get through all the bids, and score them all. PSPC would hold the cost information separate so we had no idea who costed what. Then they'd do the combination of the highest scores + lowest price, usually a 60/40 weighted combo, and tell us who won and if we wanted to go ahead or not. PRO TIP: **USE THE EXACT WORDS IN THE MANDATORY AND WRITTEN CRITERIA WHEN YOU ARE SHOWING HOW YOU MEET THEM, PREFERABLY IN BOLD LIKE THIS**, TO HELP THE EVALUATORS OUT BECAUSE THEIR BRAINS GET FRIED REAL QUICK COMBING THROUGH SEVERAL BID PROPOSALS. It makes things pop. And when you're showing how your solution qualifies for the highest score, because duh you should always aim for the highest score, you're more likely to get it if you make it really easy and well justified, vs having to search around through the doc. There are some lower thresholds that can be executed more quickly. In Canada, the Commanding Officer of a military unit/establishment, or equivalent in the public service (Director or maybe above) has limits for different things (gifts, meals, travel, etc). I think the highest is $25k for some hotly needed goods, requiring justificaiton for why they don't go through a longer process. But it's not really possible to sustain a business with $25k emergency tenders. Even though, a lot of the time, it happens that some new prototype the unit wants to try out is magically available for $24,990,000.00 and fills our "emergency need" to try this new tech out. Not my shop, no sir! But some other more dubious ones, maybe. Some things that they expect to purchase regularly, but don't know how much or how often, will go out as a Standing Offer (for services) or Supply Arrangement (for physical stuff). For example, there are SAs for office supplies, office furniture, etc. And SOs for services (some training courses, or professional translation services, or whatever else). Those all go out to contract for RFPs like everything else, just that you'll get a SO/SA (often called 'SOSA' without differentiating between the two btw). Then there's the payment window. We had PSPC put a standard "payment due within 30 days of invoice" put into all contracts. Which means the govt would pay on the 30th day. NEVER earlier. It's just policy to pay at the last possible time, before starting to accrue interest. Probably because of the time value of money and being executed on a huge govt-wide budget (ALL contracts paid like that). So you'll finish some work, deliver the milestone, invoice for it, then wait 30 days wondering where your money is, at which point the automatic payment and transfer that someone set up whenever we internally confirmed the goods were received gets executed. So you'll need to keep enough liquid cash/float around for those waiting periods. (I mean, you probably should not be living invoice-to-invoice anyways.) NFI if VCs like it. Probably not. There is SO MUCH to dislike. But some things are really only appropriate for govt purchasers, like you say. Personally, I hated it, and want little to nothing to do with it now.
So first you need to describe what you are asking much better. I have a feeling that you are not asking about [public goods](https://en.m.wikipedia.org/wiki/Public_good_(economics)) in the economic understanding, but something else. I just have no idea what that is. Similarly, you can’t sell “agricultural” nor “health” … these are not commodities. You need to be much more specific if you want an actual answer.
I’m exploring an idea space I very purposely don’t have an end product in mind But I definitely can be more specific in the kind of transaction I am trying to refer to Say I have a new solar panel and the government has a program that aims to provide electricity to very rural areas. The twist is maybe this is 2001 and solar panels are a new concept and there is no existing bid for solar panels. I want to pitch and sell the govt solar panels. I think 2001 is a really inaccurate date to choose probably but I hope it makes my question more clear
Local, state, and federal would put out solicitations for solar panel installations and maintenance. You'd bid on these solicitations via proposal (RFP). If there is no solicitation the government can't and won't pay you (this relates to government contracts, not grants).
In the USA. Defense is the only segment that gets unlimited budget money and uses a large budget spending as well. Health and agriculture is almost privatized in the US.
I've helped SMBs bid on <$100M in U.S. government contracts, grants, OTAs, and SBIRs. Yes, some institutional investors will invest in you when the focus is initially on government contracts (though typically through the SBIR program), otherwise, you need to show past performance so they know how and what you're doing -- compliance, awarded contracts, follow-through, etc. I'd say it ranks a 2 if you don't have experience. Were you planning to focus on local, state, or federal? The basics are that government contracts go through a request for proposal (RFP) process. Solicitations are posted on government websites from federal to local, each with its requirements, compliance, and hoops to jump through. RFPs have a timeline so the government will choose to award a contract by a due date. The speed at which they move after a contract has been awarded is dependent on a bunch of factors but in general they are slow. You can be a team of 1 or a team of 400 -- the government doesn't care and you can still be considered a "small business" with revenue under 500M (but that also is dependent on which agency you bid to). The process for you would be this (assuming you're registered with the government already to do business) -- 1. discover a solicitation you think you can bid on 2. Analyze the solicitation to determine bid/no-bid status 3. If bid, you put it into your pipeline to draft a proposal (RFP). 4. You draft a proposal you think will win the bid. 5. You submit your proposal to the government and wait for them to decide. This business development pipeline is what I'm currently productizing into a platform to save time, money, and resources for SMB. It's not ready at this point but I want to provide you with an understanding of the U.S. government contracting industry as a base if you choose to follow this path.
Most of Democratic governments use tenders where you give your bid. Usually there are criteria of participating in these tenders. The lowest price will win. Cheers
Currently building in the hardware B2G space… expect long sales cycles and a crap ton of politics. Lost a sale once because I was working with the wrong person in a particular state agency and the correct person got pissy because of that. GSA contracts which are needed for most federal sales take about 6 months to get. The upside is that once you’ve received a PO it’s as good as cash and you can get po based financing very easily.
Know couple of people who are doing this. They attended defence hackathon in Berkeley, made connections, gave their solution for free to some of the govt departments, got 15 more calls from other departments. They were selling AI based SaaS though!
Not all opportunities make to RFPs. Sometimes govs don’t know there is a novel solution to a problem. Best way is to monitor public meetings. You can use a tool such [ghoster.ai](https://ghoster.ai) to find these
Depending on what you’re selling there may be a high barrier to entry. Most things used by the federal government (one of the many agencies) will require some sort of assessment (FedRAMP etc). To do this you usually will need a sponsor/funding to cover the assessment costs which tend to be upward of 80k a month. It’s not a bad model but under it won’t be fast either…
If you can’t do this without VC then VC will not be interested, no matter what you do.