MYTH 4: Government Chooses the Cheapest Suppliers
“Pay peanuts, you get…”
Well… monkeys. You know this as well as I do. And while many might not realise it, Government knows this as well. However, it’s a long-held belief that Government most often awards business to the lowest bidder. This belief is stopping many quality businesses from letting Government know that they’re ready, willing and able to supply
Don’t get me wrong, price is certainly one of the criteria which Government factors in when they decide who they will work with on most opportunities. And it makes sense, right? After all, it’s taxpayers’ money they’ll be using to pay for the contract, so it’s a logical and prudent decision to ensure pricing is considered.
But (and yes, another ‘but’ from me), pricing is only one of several criteria which are assessed. Government contracts will most often list a number of other criteria which are deemed important to the solution. These can include (list not exhaustive):
Management experience
Local supplier/s
References
Evidence of prior work
Capability to supply
Quality of product or service
Other criteria, depending on the requirement
So, you’re not the cheapest, and you know this?
Sure, you might not score as highly in that criteria as the business up the road using offshore labour to keep costs down.
However, you have a tried and tested people with experience; you have some great client references; you’ve successfully completed work in the past similar to this opportunity presented by Government; and your product or service is top quality (and you can prove it!).
Well, why not put your hand up, then? You’ll score highly in key criteria areas where other bidders might not. Further, I know of several companies whose submissions haven’t even been considered because their pricing was too low.
It’s worth repeating: Government factors in many different things before they award any contract. Yes, price, or what they term ‘Value for Money’ is one of them. But please stop believing that Government will just select the bottom-feeder pricing, because this is simply not the case.