Reference sheet: Low dollar value opportunities

How the government buys

• The Government of Canada is one of the largest buyers of goods and services in Canada.
• The federal government buys a wide range of goods and services each year, with contract values ranging from hundreds to billions of dollars.
• Government buyers use a variety of methods including direct purchases from vendors as well as public tenders.

Low dollar value procurement

• Purchases below $25,000 for goods, $40,000 for services and construction, including all applicable taxes, are considered to be low dollar value procurements.
• Unlike larger purchases that are done through the solicitation of bids and quotes from potential suppliers using a tendering process, low dollar value procurements are often direct purchases from vendors.

Opportunities for smaller and diverse businesses

• Low dollar value procurement can present an opportunity to grow your business by developing a business relationship with the Government of Canada through smaller contracts.
• The Government of Canada awards a large number of low dollar value contracts to smaller businesses in Canada.
• These include credit card purchases, most of which are valued under $10,000.

Build networks

• Building relationships can go a long way in becoming a government supplier, just as it does in any line of business.
• Connect with officials in departments and agencies, learn about what directions their department's procurement may be heading, and find out about upcoming procurement opportunities in your region.
• Promote your business and share information regarding your capabilities.

Know your business and know your clients

• Who are the appropriate points of contact outside and/or inside government?
  • Find out who does the buying and who the end users are so you can target the appropriate department or agency.
• What does your research tell you about your end user's needs?
  • Find out what the government needs and buys, so that you can clearly show how your business can supply the required goods or services.
  • Search low dollar value procurement history on the Open Government Portal to find information about what government buyers have bought in the past.
  • Search award notices on the Government Electronic Tendering Service to find information about what the government has bought in your region in the past.
  • Learn about searching for award notices and contract history.
• Do you want to be the prime or subcontractor?
  • in some cases, you may want to consider partnering with another company, or becoming part of a larger company’s supply chain
  • depending on your business capacity, subcontracting can be an option to access smaller contracts
• Can you accept payment from the Government of Canada?
  • you may wish to prepare your business to accept payments through various methods including credits cards, since purchase amounts below $10,000 are often paid by acquisition cards

Register as a supplier

• Government buyers often use source lists or their professional networks to find suppliers for low dollar value procurements on a competitive or non-competitive basis.
• Registering in government supplier databases can help buyers find your business when they are looking for a specific requirement.
• Provide as much information as you can about your business, including the commodities you sell and the socioeconomic profile of your business. This will help buyers identify your business as a potential supplier, and you may benefit from procurement initiatives that aim to increase supplier diversity.
• Learn more about registering as a supplier.

Note: Indigenous businesses are encouraged to register in the Indigenous Business Directory. This will allow buyers to identify businesses for set-aside opportunities and meet government objectives to support Indigenous businesses with procurement opportunities.

For more information

Attend a seminar to learn more about doing business with the Government of Canada.