Government Market: Definition & Overview Video

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  • 0:01 What Is Government Marketing?
  • 0:32 Government Procurement
  • 3:30 Contract Disputes
  • 4:12 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
The single largest purchaser of goods and services in the United States is the federal government. In this lesson, you'll learn about the government market and the procurement procedures utilized. We'll also touch on the dispute process.

What Is Government Marketing?

A government market is a market where the consumers are federal, state, and local governments. Governments purchase both goods and services from the private sector. Governments buy the same types of products and services as private sector consumers, plus some more exotic products such as aircraft carriers, fighter jets, tanks, spy satellites, and nuclear weapons. A growing trend in the past decades has been the outsourcing of traditional government services to private firms, such as prisons.

Government Procurement

The biggest difference between private sector market transactions and government market transactions is the process you must go through to obtain the government as a customer. This process is known as government procurement. Let's take a quick look at the government procurement process.

Unlike private sector consumers, governments are subject to laws that are enacted to ensure that taxpayer money is spent judiciously, and contracts are awarded fairly and for legitimate public purposes. Additionally, after you win a government contract, you will be subject to a significant degree of government oversight during your fulfillment of the contract. In other words, the government will be looking over you shoulder to make sure you are holding up your end of the bargain.

Since procurement may differ from government to government, we'll focus on the federal government in this discussion. The United States generally utilizes two types of methods to procure goods and services. Let's take a quick look at each.

Sealed bidding is used when the government can publish a solicitation that clearly describes what the government needs and the required specifications. For example, the government may be soliciting for computer equipment and can easily specify the type and quantity.

The process starts with issuing an invitation for bid (IFB), which describes the government requirements and the deadline for bid submission. After the deadline has passed, the government will have a public bid opening and then will review the bids. The lowest bid that is responsive and responsible will win the contract.

A responsive bid complies with the requirements of the IFB and a responsible bid means the contractor has the resources to perform the contract, a satisfactory performance history, the necessary technical skills and facilities to complete the bid, and is ethical with integrity.

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