Navigating international waters
Jason Cooney addresses the challenges and strategies for New Zealand companies looking to win Government contracts in the UK and Europe. New Zealand companies are increasingly looking to the UK and Europe to expand their businesses and secure private sector and government contracts. However, they face many challenges, particularly regarding localisation, and must employ innovative […]
Jason Cooney addresses the challenges and strategies for New Zealand companies looking to win Government contracts in the UK and Europe.
New Zealand companies are increasingly looking to the UK and Europe to expand their businesses and secure private sector and government contracts. However, they face many challenges, particularly regarding localisation, and must employ innovative as well as tried-and-tested strategies to overcome them.
The entity structure conundrum
One of the foremost challenges for Kiwi companies vying for government contracts in the UK and Europe revolves around entity structure. Many government tenders stipulate the necessity for a local entity to bid, creating a hurdle for international players.
New Zealand companies navigate this challenge by:
a. Opening a local office: Setting up a local office demonstrates commitment and facilitates a better understanding of the regional nuances. This physical presence enhances communication and fosters relationships with local stakeholders. It also satisfies the local office criteria of some governments in the EU and for some UK contracts.
b. Establishing a subsidiary: Creating a subsidiary provides a distinct legal entity that operates independently but is still under the control of the New Zealand parent company. This approach allows companies to comply with local regulations and eligibility criteria. It also helps navigate issues surrounding sub-contractor and subsidiary compliance.
c. Partnerships and joint ventures (JVs): Collaborating with a local company through partnerships or joint ventures is a strategic short and medium strategy adopted by many companies when first penetrating a market. This not only satisfies the requirement for a local entity but also leverages the local partner’s expertise, network, and understanding of the regional market. This can help for winning tenders in Europe (such as Greece, Italy and Spain) as well as the UK, where they specifically ask for a track record in the respective country.
Finding the right joint venture partner with the right track record and in a new market (and country) is always a challenge. Thorough due diligence is required involving researching potential partners’ past projects, assessing their financial stability, and evaluating their reputation within the industry. More often than not, the RFP documentation asked for previous relevant experience. A potential joint venture partner needs to be able to provide a track record of previous government contracts with similar requirements to the proposed contract they are bidding for.
Demonstrating international experience
To ensure international experience is presented in a credible manner and scores well, organisations from New Zealand are going into substantial detail when developing their case studies for tenders in the UK and Europe. In addition to detailing the scope of project, personnel involved, and any challenges that were overcome (and how), they are also detailing:
- Similarities in the government and regulatory process of the target country to countries where they have previous experience. For example, the New Zealand governance and regulatory structure is similar to the UK. Both countries subscribe to many of the same international norms and protocols. This is generally highlighted in the case study with detail being provided on safety, quality and environmental protocols that were monitored as part of the contract and how these are similar to the proposed contract.
- Similarities with reporting and invoicing processes as well as other contract management processes. Procurement teams want to have confidence in the contractors’ ability to manage the contract over the longer term. When writing about previous international experience, companies need to demonstrate they have experience running the nuts and bolts of a contract – i.e. complying with invoicing and reporting requirements and meeting KPIs. They also need to demonstrate that the requirements they have complied with are largely the same or at least similar to those in the host/target country.
Regulatory compliance and cultural understanding
Government contracts in the UK and Europe come with stringent regulatory frameworks and cultural intricacies. Adhering to these regulations and understanding the local culture is essential for success, yet it poses a significant challenge for international companies.
New Zealand companies tackle this challenge by engaging local regulatory consultants or legal experts. These consultants often help navigate the complex regulatory landscape, ensuring compliance with local laws and standards – all of which often form part of the mandatory criteria for bids and tenders.
On occasion, national standards for safety, quality, environmental impact and modern slavery may surpass international benchmarks such as ISO regulations, and compliance documentation is a pre-requisite to be successful in a government contract.
Existing safety, quality and other supporting documentation need to be tailored to conform with national requirements and additional supporting documentation developed.
For example, construction companies bidding for contracts in cyclone zones often have to develop tailored cyclone management plans for their construction projects – plans that they would not have completed for any previous project.
In addition, organisations expanding throughout the EU are also taking advantage of the mutual recognition laws under the EU regulatory framework to expand into multiple countries at once.
Localising the bid
Providing a robust local engagement and participation plan is critical to the success of any tender – but even more so when you are an overseas company. New Zealand based companies are going above and beyond to convince the reader that they have a clear and practical plan to ensure the downstream economic and social benefits of the contract flow through to the local community.
This includes developing relationships with local community organisations, working with local recruiters to identify key talent that may be employed to deliver the contract, initiating community outreach programs and putting forward a real case for knowledge and expertise transfer to key local community stakeholders. Engaging local sub-contractors is also critical. Many companies spend substantial time and resources in the bid preparation period engaging local community organisations to develop a quality community engagement plan.
Being selective and writing to win
A robust bid/no bid process is critical to ensure precious resources aren’t being allocated to unwinnable tenders and bids. Companies that are selective, take the time to localise their bids, and put the work in to reassure the reader of their ability to operate and deliver in the EU and the UK are achieving strong growth and success.