Business Essentials

The US government market offers many opportunities for Canadian firms willing to make a long-term investment in developing the business. This section starts with a close look at key factors for making a profitable market entry decision, including:

• whether a market exists for your products or service
• how trade agreements help Canadian firms compete
• whether export controls may apply
• whether there are barriers to selling your product or service to the US government
• links to help you get started.

The Market

$200 billion in contract awards annually

The US government contracts offer extensive contracting opportunities for Canadian firms in the closest foreign market to Canada. The US government buys services and products offered in the commercial market, as well as highly specialized systems and custom-tailored professional services. No matter which you offer, the US government could be a potential new customer. For example, of the US$204 billion in goods and services purchased by the US government in 2000, over US$5.3 billion was acquired from foreign contractors by the Department of Defense. The Federal Procurement Data Center and GovExec offer additional data on US government procurement spending:

• Civilian Agencies & Department of Defense (FY 2002)
• Supplies and Equipment (FY 2002)
• Services and Construction (FY 2002)

US Government Contracts Can Be Profitable

• Successful US government contracts offer profitability and a stable source of income including options that last for several years. Such long term client relationships can build your business and provide a reliable source of income.
• The US fiscal year runs 1 October 30 September.
• Like Canada, US government does a LOT of fourthquarter spending.
• So, there is bigmoney business to pursue in July through September
• US government agencies must have funding in order to sign a contract, and must pay interest penalties on late payments. Contractors can therefore expect to get paid, on time, for work completed. See Evaluating Opportunities.

Federal contracting experience can enhance credibility in the US commercial sector

• Successful performance on US government contracts can add credibility to a Canadian firm's reputation among US private sector clients and partners, and attract new commercial business.
• The effort needed to meet the quality and skills required by the US government can expand the capability of your company and staff to win future business, with the government or private sector.

Build global links

• Teaming partners that work successfully on one contract may seek each other out for future business. See Teaming and Subcontracting.
• Canadian businesses operating in other foreign markets may have a competitive advantage in the US government market through their existing relationships.
• Such companies may offer their global connections to both government and commercial buyers that are not available to their competitors.

Next: Trade Agreements