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 and below $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 awarded the majority of contracts to smaller businesses in Canada from 2017 to 2020, most of which are valued under $25,000.
- These include credit card purchases, most of which are valued under $10,000.
- 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.
- GCdirectory provides a directory of most federal public servants across Canada (except for the Department of National Defence, RCMP, and the Canadian Security Intelligence Service.)
- Public Services and Procurement Canada (PSPC) Regional Offices can provide information about opportunities in your area.
- 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.
Get more help with procurement
There are many tools available to support you in doing business with the Government of Canada.
If you need help understanding the federal procurement process or registering for a procurement business number:
- Date modified: