According to new data recently released by Amazon Business, poor communication with buyers is a top barrier for SMBs to do business with government customers. The communication difficulties between buyers and sellers, such as lack of transparency around needs, capabilities, and unclear contracting language and terminology, are hurting SMBs’ business.
The report, Cracking the Government Procurement Code, was conducted by Censeo Consulting Group on behalf of Amazon Business and surveyed nearly 500 SMBs registered to do business with federal, state, and local governments.
While government procurement leaders have instituted programs to increase the participation of small and diverse businesses, progress has still been stagnant. These challenges, like incumbent supplier advantage, complex/inefficient processes, poor communication with buyers, onerous legal/regulatory requirements and political uncertainty, can’t be solved overnight.
But government buyers and small businesses alike are turning to online business-to-business marketplaces. Given the current reality, online selling has become all the more crucial for these SMBs. More on this can be found in the report.
Key findings include:
• 93% of respondents report facing significant barriers to selling to the government.
• 74% agreed that the documentation required to respond to a contract is complex and makes it difficult to communicate their capabilities.
• 69% of respondents agreed that government contracts are bundled or written too broadly, making it difficult to compete as a sole or prime supplier.
• 54% of respondents agree government contracts do not clearly articulate their needs, requirements, and desired outcomes.
According to Amazon, the biggest takeaway for supply chain managers from the report, Cracking the Government Procurement Code, is how they can understand the obstacles facing new or smaller sellers who might otherwise be a missed opportunity to source new materials, diversify their networks and fulfill regulatory requirements.
The report shows how small businesses face unique challenges in selling to the government, like incumbent supplier advantage, complex/inefficient processes, poor communication with buyers, onerous legal/regulatory requirements and political uncertainty. For supply chain managers, that means helping to address these challenges and ensure a more level playing field along with a simpler procurement process.
The impact of these findings is that the report starts to outline solutions everyone, from seller to supply chain manager to government agency, plays in improving the procurement process.
• Improving reporting and identification capabilities for government buyers
• Better supporting agency contracting goals by increasing visibility into the socioeconomic certifications of registered small businesses
• Providing more customer service and technical support for new buyers and helping them register with federal, state, and local governments
• Improving education around the contracting process
• Leveraging regional resources designed to help drive new opportunities
About the Author
Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]