If you’re a local business owner, you probably already know that the biggest customer you can have in Singapore is the government.
After all, they constantly have to purchase goods and services for their operational needs and to keep the country running. Most of the time, these involve long-term or large-scale contracts that can boost business profits.
However, there are many businesses – especially new ones – that do not bid on these government contracts largely because they do not understand the process or feel intimidated by it.
The good news is that bidding and winning government procurement contracts is not as complicated and cumbersome as it seems!
We’ve put together a Singapore Government Procurement Guide, which will demystify the entire process and break it down into simpler, bite-sized steps for you.
Support For SMEs Extend To Awarding More Government Contracts
As of 2020, there are 273,100 Small and Medium Enterprises (SMEs), of which 81% are local enterprises. SMEs are defined by the Department of Statistics as enterprises that have operating receipts of not more than $100 million or not more than 200 employees. Although SMEs are smaller companies, they are a key driver of Singapore’s economy.
Apart from being responsible for 65% of Singapore’s employment, it was reported in 2017 that SMEs contributed $196.8 billion, or 49% to the economy. Thus, there’s no doubt that SMEs are valuable to the country and the Singapore Government recognises this.
In recent years, the government has made it a point to support SMEs by awarding more contracts to them. The total number of government contracts was around 35,500 and worth S$22.6 billion in 2016. Of which, over 80 per cent – which comprises about half of total government contract value – went to SMEs.
Earlier this year, Workforce Singapore and Urban Redevelopment Authority (URA) awarded some tenders to SMEs and these are only two examples out of many others as contracts become more open to smaller companies.
COVID-19 Measures To Help SMEs Are Good But Not Enough For Business Growth
With almost 300,000 SMEs in Singapore, the government noticed that a lot of support is needed especially during the COVID-19 pandemic. After all, it is a challenging time and small businesses have to survive and try to stay afloat.
Hence, measures have been taken to do so. They include embracing digitalisation to help transform traditional business models, support schemes, and SME grants as well as taking the steps to enable SMEs to more easily compete for Government Procurement projects.
Apart from that, there has been a recent extension for the Temporary Bridging Loan Programme and the Enhanced Enterprise Financing Scheme – Trade Loan and there are additional support measures expected to cost S$1.2 billion.
There is also the Jobs Support Scheme (JSS) which helps to subsidise local employees’ salaries, tax rebates, and loans.
Additionally, there was also rental support in the form of a waiver that was intended to assist eligible SMEs and non-profit organisations during the Heightened Alert (HA) period. This involved tightened safe management measures that affected businesses from May 16 to June and July 22 to August 18 this year.
However, while saving money and cutting costs is essential for a business, it is far more effective and scalable to bring in new business and win more contracts, especially during this challenging period where business survival is at the forefront.
Understanding The Government’s Procurement Evaluation Process Is Key
Through a one-stop e-procurement portal known as Government Electronic Business (GeBIZ), suppliers are given equal opportunities to participate in the public sector’s Invitations To Quote or Tender.
Government procurements are guided by the three core principles of transparency, open and fair competition as well as value for money. All eligible bids will be evaluated fairly, regardless of the size of the firm. Also, government agencies will ensure that tenders are appropriately sized so that all suppliers (SMEs included) will have a fair chance to compete for them.
Under this open procurement system, SMEs have been fairly successful when it comes to winning Government contracts. It has been reported that SMEs secured over 50% of total Government contract value and around 80% of all Government contracts. More than 40% of the total contracts were won by smaller companies with less than S$10 million in revenue.
When it comes to value for money, it doesn’t mean that the lowest bidder always wins. In fact, approximately half of all procurements are not awarded to the lowest quote. Although price is a big consideration in evaluation, agencies will have to first ensure that bids comply with all the requirements that are specific to the tender.
Besides that, there are other factors such as reliability, quality of the goods and services, timeliness in delivery, and after-sales support.
Types Of Purchases And Procurement Approaches You Must Know
Based on the value of the procurement, agencies will choose a suitable procurement approach.
There are three procurement approaches:
- Small Value Purchases (SVP)
- Invitation To Quote (ITO)
- Invitation To Tender (ITT)
For Small Value Purchases, the estimated procurement value is below S$6,000. The purchase will be made directly from suitable suppliers or off-the-shelf, depending on whether the prices assessed reflect fair market value.
When the estimated procurement value is more than S$6,000 but not exceeding S$90,000, the selected procurement approach would be the ITO.
There would either be an Open Quotation which is a quotation notice published openly on GeBIZ for suppliers to quote or a Limited Quotation, which is only open to a few selected suppliers.
An ITT is the procurement approach of choice when the estimated procurement value exceeds S$90,000. This would involve either an Open Tender, Selective Tender, or Limited Tender.
An Open Tender would be published on GeBIZ, inviting any interested supplier to bid according to the specified requirements.
On the other hand, a Selective Tender consists of a 2-stage process in which interested suppliers will be shortlisted according to their capabilities through an open pre-qualification exercise. Those that are shortlisted will then be invited to submit their bids.
The most elusive type of ITT is a Limited Tender, which is issued only to one or a few selected suppliers that will be invited to tender.
The Government Procurement Process (What You Need To Know)
Now that you have a better idea about the government’s evaluation process as well as the types of purchases and procurement approaches, here’s what you need to know about the government procurement process.
1. Register As A GeBIZ Trading Partner And/Or Government Supplier
As a GeBIZ Trading Partner, you’ll gain unlimited access to the business opportunities that are available on GeBIZ.
Apart from that, you’ll be able to download documents and take part in bidding for tenders and quotations as well as obtain detailed information on tender and quotation awards. You’ll also be able to conveniently receive purchase orders and submit invoices for purchases electronically.
When you register to be a GeBIZ Trading Partner, you will be required to submit your Singapore company incorporation documents and other key information.
Once you are successfully registered, expect another set of paperwork for each tender or project. As there is quite a bit of paperwork, you should make it a point to keep your documents organised and in order.
In the event you chance upon tenders that list Government Supplier Registration as criteria, you’ll have to select the correct category. For general goods and services, you may access the registration guide via the Ministry of Finance (MOF). If you’re looking to register for construction-related goods and services, you’ll have to do the registration via the Building & Construction Authority (BCA).
Tip: Registration is free for the first user account.
2. Browse Through Available Government Procurement Opportunities At GeBIZ Portal
As of today, there are 10925 recently closed tenders and 728 currently active ones on the GeBIZ portal.
Invitations for quotations and tenders are constantly getting published, so it helps to keep yourself updated with the new requests regularly – in case any of them are relevant or a good match for your business.
Tip: Get familiar with GeBIZ’s interface so that you can use it to your advantage when it comes to filtering and seeking out the best opportunities for your business.
3. Understand The Tender Criteria & Requirements
While it could be tempting to cast your net far and wide and try to bid for as many tenders as possible, it isn’t a good idea to do so because it could be counterproductive.
Instead of going for quantity, you should take the time to go through each tender document thoroughly and opt for the ones that are a better fit for your business.
It helps to take note of all the specifications, deliverables, scope, and timelines to clearly understand what’s required so that you can determine whether or not you are able to deliver.
Even though you might end up submitting fewer bids or quotations, at least you would be applying for the most relevant ones.
Do note that agencies typically have 2 sets of criteria:
- Critical Criteria: Criteria that must be met in order for the bid to be taken into consideration for the award.
- Not defined as Critical Criteria: Suppliers who do not meet these criteria will still be considered and might have a chance at securing the job. However, they may face a disadvantage when put against other suppliers that meet the criteria.
Tip: Be selective and only bid for jobs that you have the capacity and capability to take on.
4. Prepare A Competitive Bid For The Procurement Opportunity
Once you understand the requirement and criteria of the quotation or tender document, the next step is to prepare a competitive bid to secure the job. To submit a competitive bid, there are few things you can do.
Firstly, seek clarification with the procuring agency if you are unclear with any of the terms and conditions.
Apart from that, make it a point to attend tender briefings or site show-rounds. These briefings are meant to give suppliers a better idea of what the agency requires for the tender. Also, it allows you to address any questions and seek clarification with the agency on the tender documents, requirements, and evaluation criteria.
Sometimes, agencies might require suppliers to have professional qualifications or accreditations to ensure the delivery of industry-standard quality products or services. Thus, if this applies to your business, you’ll have to apply for the required accreditations and qualifications.
Lastly, address all the criteria and showcase your competitive advantage as well as value-for-money. When you emphasise your strengths and how you can meet all the requirements, you increase your chances of securing the job.
Tip: Give yourself enough time to make your submissions and avoid submitting your tender or quotation at the last minute. Late bids (submitted after the closing date) will be rejected.
5. Evaluation Of Your Quotation/Tender By The Government Agency
After submitting your bid, the agency will take some time to evaluate your quotation or tender. Do note that you will be up against other competitors that are bidding for the same job, so expect to have a bit of a wait while the agency goes through all the bids and attempts to identify the best supplier for that specific job.
Tip: At this point, the ball isn’t in your court. Keep calm and continue searching for other opportunities!
6. Deliver Quality Products & Services If You Win The Contract
In the event, you win the contract, congratulations! Your next step is to work hard and deliver quality products and services.
When it comes to contract performance, there are three core aspects to keep in mind and ensure you’re sticking to.
Similar to how you plan and prepare when putting together your competitive bid for the procurement opportunity, your execution process should also involve making sure you have sufficient resources and preparing your team. When you plan properly and stick to your timelines, your project will go more smoothly.
Another critical thing to take note of is the deadline for the delivery of your services as the government has to ensure the proper functioning of public infrastructures and missing a deadline could affect public works.
If you face any challenges when it comes to fulfilling the requirements after awarding the contract, you should highlight and resolve them with the agency as early as possible.
It also helps to maintain timely and frequent communication with the agency to ensure you are aligned and that expectations are being met.
Having high-quality service could help you stay on the agency’s good side and in the event you do a good job, you might even win a renewal or contract extension since they are already familiar with your work.
However, winning the contract does not guarantee that the job is yours till the end of the contract if you aren’t able to deliver.
In fact, there are grounds for debarment to protect the interest of the government against errant suppliers.
Suppliers may be debarred from getting future government contracts for a period of time if any of the following happens:
- Abandonment or termination of the contract
- Withdrawal of tenders before award
- Withdrawal of tender after award
- Use of sub-standard materials and short supply or cheating / attempted cheating
- Giving false information
- Poor performance reports
- Unauthorised subcontracting
- Novation of contract
- Defaulting repeatedly
- Violation of safety regulations or safety requirements or debarment for a poor safety record
- Compromise of national security or public interest
In the event the agency wants to debar a supplier, they will submit the debarment recommendation for approval.
Once it gets approved by the Standing Committee on Debarment (SCOD), the company or employee will be informed of the outcome as well as the reason for debarment.
Debarred suppliers will then be barred from participating in all government tenders in GeBIZ for a period of one to five years, depending on the severity of the default.
Tip: Your brand’s reputation is on the line so ensure that you carry out your contract with due diligence and deliver what you promised to in your bid.
7. Providing & Requesting Feedback To Understand Why Your Bid Failed
If you didn’t win the contract, don’t fret. It could be disheartening to not succeed in scoring the project, but instead, focus on figuring out how to do better the next time.
If you have any concerns regarding the tender process, you may provide feedback to the agency and also request one from the agency as well.
You can do this by reaching out to the specific contact person that will be listed in the respective quotation and tenders.
Once you get in touch, the agency is obliged to explain why your bid was unsuccessful. You can then take this feedback and figure out how to improve.
Tip: Keep an open mind and consider the agency’s feedback when preparing future bids.
Bid For Overseas Opportunities As Well
If you’re interested to look beyond Singapore and explore opportunities with other governments, it’s worth bidding for overseas opportunities too.
As Singapore is a signatory to World Trade Organisation Agreement on Government Procurement (WTO-GPA) and multiple Free Trade Agreements (FTAs), there are various procurement opportunities in overseas markets for Singapore suppliers – for example, in Singapore Tourism Board’s (STB) Overseas Regional Offices.
Besides facilitating local suppliers in participating in overseas procurement opportunities, overseas suppliers would also be able to take part in local business opportunities more easily.
Tip: Keep a lookout for opportunities in other governments which can be found on the GeBIZ portal, via links to relevant websites.
Win More Government Contracts With Our Procurement Checklist Here
Now that you have a better idea of the process, ensure that you don’t miss out on any crucial steps by following our procurement checklist!
1. Have you registered as a GeBIZ Trading Partner and/or Government Supplier?
Ensure that you have registered as a GeBIZ Trading Partner to gain unlimited access to all the business opportunities and make the most of the GeBIZ portal.
2. Have you browsed through the GeBIZ portal properly?
Keep yourself updated by constantly keeping tabs on the available government opportunities so you don’t miss out on any that are relevant to your business.
3. Do you understand the specific tender criteria and requirements?
Take the time to thoroughly go through the tender document so that you can determine whether or not you have the capability to take on and deliver what’s required.
4. Is your bid for the procurement opportunity competitive enough?
Make sure you clear all your doubts with the agency, if any, and ensure that your bid addresses all the required criteria. You also want to make sure you give yourself enough time to prepare so that you can submit your bid in time.
5. Are you waiting for the results of your quotation or tender?
Be patient and continue keeping a lookout for other relevant opportunities.
6. Have you mapped out your plan now that you’ve won the contract?
Ensure that you have sufficient resources and capacity to deliver quality products and services. It helps to stay organised and stick to your timelines to be on track and do a good job.
7. In the event your bid didn’t win, do you understand why it failed?
Reach out to the specific contact person in the quotation or tender and find out from the agency why your bid was unsuccessful. After that, take the feedback and improve so you can do better for the next one!
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