What is Government to Government (G2G) contracting
In this blog, we’ll examine a contract type used by governments to buy goods, services and solutions from another country.
Government procurement offers significant opportunities for companies looking to expand internationally. One powerful way to tap into these opportunities is through government to government (G2G) contracting.
G2G contracting allows businesses to collaborate with their government to sell their products, services and solutions to foreign governments. In this blog, we’ll dive into how G2G contracting works, its key benefits for both exporters and foreign government buyers and how it can help you unlock high-value contracts in sectors ranging from defence and aerospace to clean technology and infrastructure.
Whether you’re a seasoned exporter or new to international markets, understanding G2G contracting can open the door to exciting global opportunities.
G2G meaning
A G2G contract or G2G collaboration is an arrangement between governmental bodies to acquire goods, services, or solutions. With G2G contracting, the buying government works with the “selling government”, rather than the supplier.
Example of how a G2G collaboration works (offered by Canada’s CCC)
By elevating the relationship to a governmental level, the buying government can at times bypass the complexity of private-sector bidding processes, reduce procurement risks, streamline decision-making and ensure national interests are better protected. It can also be a crucial aspect of international diplomacy and public service delivery and offer more direct oversight of projects that reduce the risk of corruption or inefficiency. For the selling government, G2G contracting is an opportunity to support the exports and build diplomatic relationships and alliances.
For the businesses offering the products and services, G2G contracting does not remove the requirement to meet the buying governments needs as dictated by the project and contract but does elevate their credibility with the government buyer.
Many countries offer G2G contracting, including Canada, the United States, France, South Korea and the United Kingdom.
Best use of G2G
G2G agreements are an attractive vehicle for many procurement opportunities. However, some government procurement markets are more conducive to G2G. Markets with urgent and compelling needs (i.e., emergency response or national security procurements), lack of government procurement capacity, issues of bribery and corruption, and failed competitive procurement processes are most favourable to G2G contracting.
Canada’s G2G
G2G contracting is CCC’s signature service to help bring qualified Canadian businesses to government buyers worldwide. As a Canadian crown corporation, CCC acts on behalf of the Government of Canada and assumes the responsibility to work with the buying government (municipal, state and federal) and the Canadian supplier to meet a procurement or project need.
Depending on the buying government, CCC not only negotiates the contract, but it also acts as Prime Contractor. CCC takes on all contractual matters, performance oversight and financial administration of the agreement. It also has policies to reduce the risk of unethical business practices that can hinder procurement effectiveness and supports environmental, social and governance (ESG) best practices.
Canada’s G2G contracting service offers another key differentiator. Canadian G2G projects significantly reduce the risks associated with international procurement since every contract signed by CCC with a buying foreign government has the legal effect of being signed in the name of the Government of Canada.
This is enabled by the fact that every company that works with CCC has been evaluated technically, financially and managerially to confirm its ability to deliver projects successfully. This provides the buying government buyers with assurance that the contract will be delivered in accordance with the agreed terms and conditions but it can also create attractive conditions for project financing.
What sectors qualify for G2G
G2G contracts are frequently employed to procure items and services critical to national security, international development, infrastructure or the public interest, such as military equipment, agricultural products, or construction of airports, hospitals, or water treatment facilities.
Canada’s G2G is typically used for contracts greater than $250,000 with the U.S. DoD and greater than $10M for non-US DoD opportunities. Typically, large-scale purchases and projects in major sectors qualify, including those in:
How CCC facilitates G2G contracts
CCC offers the following services to facilitate and ensure the success of the procurement deal.
- Before the negotiation – CCC may sign a memorandum of understanding (MOU) with the relevant government ministry and proposing a solution that meets the need of the government buyer. At the same time, CCC will establish a services agreements with the relevant Canadian company, define requirements for the project, review their proposal, confirm alignment on the proposed terms and conditions and submit a proposal with the Canadian company with technical, managerial and financial strength . The aim is to come to a strong starting position that both organizations are comfortable with.
- During the negotiation – During this phase, the Canadian exporter speaks to the technical details of the solution. CCC, who will undertake the role as prime contractor, facilitates the contract negotiations including advising on pricing strategies, contract guarantee instruments and contract terms.
- After the negotiation – Once the contract with the buyer is signed, a domestic sub-contract between the Canadian exporter and the CCC is signed. The CCC, as the prime contractor, will oversee the execution of the contract. This may include the transfer of funds to ensure transparency, compliance to anti-corruption policies, and manage any issues that arise. The Canadian exporter handle any technical issues.
Due diligence process for G2G collaborations
When assessing the capabilities of the Canadian exporter, CCC’s performs due diligence on the organization to evaluate the following during the onboarding process:
- Technical strength: Questions asked include “Does the Canadian company have sufficient technical expertise to meet the requirements of the contract?”, “Does the Canadian company have capacity to undertake the contract?” and “Is there an alternate source of supply for the product or service?”. This review may include site visits.
- Managerial strength: Questions asked include “Is the management team at the Canadian company capable of carrying on your business over the life of the contract?”, “Is there a project team at the Canadian exporter capable of managing the contract?” and “Does the Canadian company have experience in managing successful export contracts in markets with risk profiles like that of the proposed contract?”.
- Financial strength: Questions asked include “Does the Canadian company understand the risk of insolvency during the contract period?”, “Is there adequate capacity for the Canadian company to meet the contract’s cash-flow demands?” and “What is the ability of the Canadian company to handle scope changes and cost overruns commensurate with the risk of the project?”
G2G examples
Many Canadian companies and government buyers have benefited from G2G contracts through CCC. Here are example of some of our recent G2G project announcements:
- Aecon and Government of Bermuda for international airport redevelopment project
- Gastops and U.S. Coast Guard for engine analysis system
- JV Driver and Ghana for new maritime port terminal
- De Havilland and Biman Bangladesh Airlines for fixed-wing aircraft
- Festo and Government of Peru for skilled workforce development
- Bell Textron and Montenegro Air Force for rotary-wing aircraft
- Argentina’s Federal Police and Viking for aircraft
- Coulson and Bolivia for firefighting service
Every year we help Canadian companies win millions in contracts with foreign governments. Download our guide to learn more about our approach, how we prepare you, and priority sectors.
Where to find G2G opportunities
Many of the major government procurement opportunities are posted on online portals for bidding companies to review, register and respond. To help Canadian exporters access more global opportunities and to help government buyers receive bids from Canadian companies, we have created our own portal called the Global Bid Opportunity Finder (GBOF).
Our portal is one of the largest sources of government procurement opportunities exclusively for Canadian companies. The single sign-on portal provides access to bid opportunities from over thirty sources in over 200 countries. Five thousand new opportunities are added to the portal daily.
Examples of portals whose procurement opportunities are aggregated into GBOF include: U.S. Government including U.S. DoD, Public Services and Procurement Canada, United Nations Development Programme (UNDP), The World Bank, and Contracts Finder (UK). Access to GBOF is free to all Canadian companies.
Have a G2G Opportunity?
If your company and export opportunity checks several of the boxes below, the CCC can help you be successful.
If your company…
- Has experience selling internationally, especially into similar markets
- Sells directly to international government entities
- Has prioritized selling internationally as a key component to grow sales
- Has staff, local partners or representation
- Has the capacity and financial strength to pursue deals of a significant size as buying governments usually consider G2G for larger, critically important procurements
If the opportunity…
- Is relatively large (1) >$250,000 for U.S. DoD opportunity and >$10M for non-U.S. DoD opportunity
- Will lead to a larger deal that will get attention at senior levels of the buying government
Want to discuss the specifics of your export opportunity? Contact Us
This post was last updated on November 29, 2024.
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Let us help you explore ways that the Government of Canada can help you win more international deals.
