Government procurement transactions can offer many benefits to your startup or SME. For example, winning government contracts allows you to earn enough revenue to settle your business loans while trying to establish your company’s profits. Moreover, the longevity of your business relationship with the government ensures a steady income, helping you increase your organization’s resources.
Platforms like PhilGEPS help make procurement opportunities accessible for your budding company. Through PhilGEPS, you can browse and bid on contracts from government agencies more efficiently as a merchant or supplier.
Read on to learn what PhilGEPS is and its purpose.
What is Business-to-Government?
Understanding what PhilGEPS is first requires knowing the nature of business-to-government transactions. Business-to-government (B2G) is the relationship between the private sector and the government, as well as public institutions like schools, hospitals, and utilities.
In B2G, private companies provide goods or services to government agencies. For example, if you are an office equipment supplier, you can sell your products to a government entity like the city hall. Government agencies may also turn to your organization for construction projects via B2G transactions.
However, selling to the government is different from selling to a regular consumer. You must follow certain rules and regulations to qualify as a contractor for the government. Meanwhile, government agencies and public institutions must conduct a bidding process when awarding project contracts.
B2G Advantages and Disadvantages
1. Provides a steady source of revenue
Governments must address several local and national matters. As such, they are one of the largest buyers of goods and services. They often have ongoing projects requiring a constant supply of resources.
Your business can leverage B2G transactions as a reliable source of revenue to stabilize your cash flow. B2G deals can also reduce the risks associated with market fluctuations. Even if you’re a small business owner, you get a level playing field with B2G reducing your struggles of finding a consistent stream of customers.
2. Gives access to large markets
Since the government is responsible for the entire nation and its affairs, it’s safe to say its agencies and institutions work with nearly every industry to acquire relevant goods and services.
By participating in B2G transactions, you can access these markets that may be otherwise difficult to penetrate if you were to focus on the private sector alone. Working with the government also lets you establish a trustworthy reputation and credibility in your industry. As such, you can find more opportunities with customers in the private sector and expand your business.
3. Offers long-term business relationships
Contracts with the government typically have longer commitment terms than those with private businesses. That means B2G transactions offer a more stable and long-lasting business relationship. You and your clients from the government can leverage this partnership such that neither of you has to look for customers or contractors constantly.
Your company can also operate with increased resources. Think of the partnership as building a customer base through repeat business and referrals from long-term B2G contracts.
1. Requires a lengthy and complicated procurement process
Due to the long-term nature of B2G transactions, government agencies must choose suppliers who pass their standards. As such, you must undergo an extensive and complex process to qualify for government projects.
If you’re low on resources, you might find it challenging to submit bids, respond to requests for proposals (RFPs), and meet specific criteria and regulations.
2. May have high levels of competition
B2G transactions can be highly competitive since many businesses are vying for the same contracts. You must overcome obstacles like limited resources and financing options to compete against larger enterprises. Additionally, the competitive nature of B2G transactions can drive the prices down. In such cases, your company may have reduced profit margins.
3. Can encounter payment delays and uncertainty
Government agencies often have strict payment schedules, requiring extensive documentation before settling their outstanding balances. The process can take time which may lead to delays in payment. In effect, your business may face cash flow problems, especially if late payments accumulate.
Plus, government and economic performance changes may cause a shift in priorities or lead to contract cancellations. If any of these happens, you might be up against unexpected business losses and uncertainties.
What is PhilGEPS?
So what is the meaning of PhilGEPS, and how do B2G transactions relate to it? Firstly, PhilGEPS is an acronym for Philippine Government Electronic Procurement System. It is an online portal where government agencies can publish their procurement needs.
The purpose of PhilGEPS is to provide government organizations with an online platform. Here, they post procurement opportunities for businesses to bid on electronically. This platform uses automation technologies to streamline the procurement process for all stakeholders. As a participant or member, you can access bidding documents, notices, and awards in this centralized platform.
How Does PhilGEPS Work?
Here’s a rundown of how to use PhilGEPS to participate in government contracts or projects.
Step 1: Registration
Step 2: Search for procurement opportunities
Registering your company lets you search for procurement posts from various government agencies on the PhilGEPS website. You can use keywords and filters, such as categories and locations, to find procurement opportunities for your business.
Step 3: Participation in the bidding process
Through the PhilGEPS website, you can submit proposals digitally in real-time with the required documents and information stated on the notice.
The PhilGEPS portal also has a feature that allows you to connect with the procuring entity for necessary clarifications or questions. This way, you can provide a complete and accurate proposal. Depending on the requirements, you can submit your bids through the PhilGEPS platform, email, or mail.
Step 4: Evaluation from the procuring entity
The requesting government agency evaluates submitted proposals based on specific criteria. Typically, they look at the price, quality, and delivery schedule. After the evaluation, they announce the bidding results and award the contract to the winning bidder.
If your bid wins, PhilGEPS will be your tool for contract management, as it keeps track of deliverables, invoices, and payments.
PhilGEPS Membership Types
If you plan to enter the B2G scene in the Philippines, you must choose your type of PhilGEPS membership.
Registering to PhilGEPS is free, and any SME with valid requirements can apply. The Red membership is the default. One of the perks of this membership is you don’t have to renew it since it has no expiration date.
Other benefits include viewing open and closed opportunities, award notices, and procurement service catalogs. You can also order relevant documents and see bid matches.
Since it is a default membership, the requirements for the PhilGEPS Red membership are the same as the ones for registration. They are as follows:
- Valid email address
- Company Taxpayer Identification Number (TIN)
- Department of Trade and Industry (DTI) license
- Securities and Exchange Commission (SEC) Certificate or a Registration Number from the Cooperative Development Authority (CDA)
- Other proof of legitimate business operations
You can upgrade your membership to Platinum to access more PhilGEPS features. With a PhilGEPS Platinum membership, you can enjoy the benefit of directly bidding on the website for any open notice, including projects over P1 million.
Plus, you can become a “preferred supplier” since you’ll have the PhilGEPS Certificate of Registration, increasing the strength of your bids without needing to submit additional documents as supplements for your proposals. Platinum membership also lets you store and manage your eligibility documents, consultant listings, and ongoing or completed projects.
Unlike the standard documents of a Red membership, the requirements for PhilGEPS Platinum membership are the following:
- Valid Certificate of Business Registration from DTI for single proprietorships, from SEC for corporations, or from CDA for cooperatives
- Valid Mayor’s Permit
- Audited financial statements with a Bureau of Internal Revenue (BIR) stamp
- Notarized PhilGEPS Sworn Statement
- Tax Clearance Certificate
- Payment of P5,000 membership fee
- Contractors must present their license from the Philippine Contractors Accreditation Board (PCAB).
- If a PCAB license does not apply to your business, upload a file stating, “The PCAB License is not applicable.”
FAQs on PhilGEPS Registration
This section offers vital information on how to navigate PhilGEPS registration.
1. How do I pay for my PhilGEPS Platinum renewal or registration fee?
According to the PhilGEPS website, you can pay the fee through the Land Bank of the Philippines using an OnColl Payment Slip. You can also pay directly to the PhilGEPS cashier on the ground floor of the DBM Arcache Building, San Miguel, Manila.
2. How do I renew my PhilGEPS membership?
How to renew your PhilGEPS membership depends on your membership type. But regardless if you have a Red or Platinum account, you must gather the proper requirements for PhilGEPS renewal.
For example, there’s no need for a PhilGEPS Red membership renewal process since it has no expiration date. On the other hand, you must undergo a renewal process for PhilGEPS platinum since it expires. Simply follow these steps.
Step 1: Log in as “merchant” and update your profile and organization page, including your Platinum certificate details.
Step 2: Proceed to payment by clicking BACK or MENU. Once done, click “organization” and then “Platinum Membership.”
Step 3: Click the “Select” option on the “Platinum Registration Management” dropdown menu. Then, click the “Renew” button on the “Actions” tab.
Step 4: Review your Certificate details and press “Save and Continue.” The portal will generate the payment slip you’ll use to settle applicable fees. Your renewal application will remain a draft until you have paid and provided proof of payment.
Step 5: Upload the proof of payment and click the “Submit for Approval” button. You can view the status of your application on the Platinum Registration Management Tab. Note that the validation process may take up to three working days.
3. What are the limitations of a Red PhilGEPS membership?
As it is the default, the red PhilGEPS membership has limitations. Firstly, you cannot submit your bids directly on the platform. Instead, you must send them to the Bids and Awards Committee (BAC) chairperson. Moreover, PhilGEPS Red members can only bid on projects worth less than P1 million.
Also, since you don’t have the PhilGEPS Certificate of Registration issued to Platinum members, you must submit Class A eligibility documents.
Enter the B2G Scene with PhilGEPS
PhilGEPS allows startups and SMEs to participate in government procurement, leveling the playing field. PhilGEPS’ automated and streamlined procurement process makes it easy to bid on government projects that interest you. This way, you can grow your business and provide quality products or services to government agencies and their projects. So apply for fast online loans at Asialink Finance to help fund your government-awarded contracts.