When considering expanding into new markets, a company will often seek to develop a new country or a different region of the globe. However, it can still look into selling south of the border by exploring whether the U.S. Department of Defense (U.S. DoD) would be interested in purchasing the products or services it has to offer.
Many companies with a commercial product or service all too often overlook the military market, either because they don’t believe their products have a military use or they think selling to a defense department is too cumbersome. However, a trade agreement in place since the early 60s – the Canada-U.S. Defense Production Sharing Agreement (DPSA) – provides Canadian exporters with access to the U.S. defense market.
The U.S. Department of Defense has a procurement budget of more than $74.9 billion for 2005. It’s the U.S. federal government’s largest purchaser. When people think of military acquisitions, what immediately comes to mind are aircraft, ships, combat vehicles, or weapons. In reality, the U.S. DoD buys a lot of paper towels, cleaning products, as well as many other items. The Defense Logistics Agency - the division that provides supplies to the military services – buys about $28 billion in goods each year from more than 20,000 suppliers.
Although the Navy, Army, Air Force, Defense Logistic Agency and other agencies each has its own procurement offices around the United States, the laws, regulations and guiding principles are the same across all the service branches. “This centralized and uniform procurement system makes it easier for a firm to deal with more than one division, once they gained some experience with the U.S. DoD procurement system” said Daniel C. Nielsen, Deputy Director of Defense Procurement Program Acquisition and International Contracting at the Office of the Under Secretary of Defense (Acquisition, Technology, Logistics). Mr. Nielsen’s comments were made at the 2004 Federal Government Procurement Conference of the Americas in Vancouver. In addition, procurement experts have noticed an increase in the purchase of “off-the-shelf solutions,” a trend that usually favor providers of civilian products.
To get an idea of which organization to target first within U.S. DoD, the Department has published a list of the major military purchasing offices of the Army, Navy, Air Force, and Defense Logistics Agency (DLA) and the products and services that each one purchases. The list can be found on the Internet at: www.acq.osd.mil/sadbu/publications/selling/index.html. Canadian companies can access SourceCan’s Business Opportunities section, an online bid matching service, where opportunities for the U.S. Department of Defense and other foreign governments are posted. To find out more about SourceCan, go to www.sourcecan.com.
“Once a company realizes that the U.S. DoD might be interested in their products, it should then immediately register to the Centralized Contractor Registry (CCR), a requirement for obtaining contracts from a U.S. Federal Government department,” said Mr. Nielsen. In order to complete the registration, Canadian companies will be required to get an FSC Code, an NCAGE Code, a DUN number and a SIC Code or NAICS Code.
For companies wanting to get some assistance in registering to the CCR or obtaining all the necessary codes to comply with the Department of Defense requirement, the Canadian Commercial Corporation (CCC), can take all the necessary measures to ensure your company is registered in the Central Contractor Registry.
If you’re interested in pursuing opportunities with the U.S. Department of Defense, find business leads at www.sourcecan.ca and get information on pursuing your lead at Next Steps Online.
To find out the best strategy for marketing to the U.S. DoD or to learn more about all the steps needed for a company to comply with U.S. DoD requirements, go to DoD Prime Contractor Solution or contact Ron Lindon at CCC at (613) 995-0140 or at ron@ccc.ca.
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