Quick answer
Small businesses win government contracts by registering on AusTender and state tender portals, targeting opportunities that match their proven capabilities, and submitting clear, compliant responses that address every evaluation criterion. The Commonwealth has targets to buy from small and medium enterprises and generally must pay invoices on contracts up to $1 million within 20 days. Plan the working capital to deliver before your first payment arrives.
Key points
- Federal opportunities are listed on AusTender; each state and territory runs its own portal.
- The Commonwealth aims to source a significant share of procurement from SMEs.
- Winning bids answer every criterion clearly, with evidence and a sharp price.
- Plan the cash to deliver — mobilisation costs arrive before the first payment.
Government is one of the biggest buyers in the country — of cleaning, construction, IT services, consulting, catering, maintenance, equipment, training and almost everything else. For a small business, a government contract can mean steady, reliable work from a client that pays on defined terms. Yet many owners never bid, assuming the work goes to big companies or that the paperwork isn’t worth it.
Both assumptions are worth challenging.
Where are government contracts advertised?
Federal. The Australian Government publishes opportunities on AusTender. According to business.gov.au, you can register to be notified of business opportunities matching your business profile, and AusTender lists opportunities valued at $10,000 or more. Digital and ICT work also runs through BuyICT.
State and territory. Each has its own portal, listed by business.gov.au:
| Jurisdiction | Portal |
|---|---|
| ACT | Tenders ACT |
| New South Wales | NSW eTendering |
| Northern Territory | Quotations and Tenders Online |
| Queensland | QTenders |
| South Australia | Tenders SA |
| Tasmania | Tasmanian Government Tenders |
| Victoria | Buying for Victoria |
| Western Australia | Tenders WA |
Local councils also advertise tenders and requests for quotation, often for smaller local contracts that suit small businesses well. Head contractors on large government projects are another route — subcontracting can be an easier first step than bidding as the prime contractor.
Do small businesses actually have a chance?
Yes. The Department of Finance’s Selling to Government information for small businesses sets out Commonwealth targets to source:
- at least 25% of procurement by value from small and medium enterprises for contracts valued up to $1 billion; and
- at least 40% by value for contracts valued up to $20 million.
It also notes that agencies can directly engage an SME for procurements valued up to $500,000 (including GST) in some circumstances. For these purposes, SMEs are Australian and New Zealand firms with fewer than 200 full-time equivalent employees.
How do you choose which tenders to bid for?
Bidding takes real time. Be selective:
- Match your proven capability. Bid for work you’ve done before, at a similar scale.
- Check the size. A contract several times your current turnover is a big stretch — for delivery and for cash.
- Read the evaluation criteria first. If you can’t evidence most of them, pass.
- Check the mandatory requirements. Insurances, certifications, security clearances, licences.
- Consider the payment terms and duration. Can you fund the work until payments start?
- Look for smaller entry points. Panels, standing offers and low-value quotes build a track record.
How do you write a response that wins?
- Read everything. The whole tender pack, including the draft contract and any addenda.
- Ask questions through the formal channel within the allowed period.
- Answer every criterion directly, using the same headings and in the order asked.
- Use evidence, not adjectives. Specific past projects, outcomes, references, names of key personnel and their experience.
- Explain your method. How you’ll deliver, manage risk and keep the client informed.
- Price clearly and competitively. Show what’s included. Don’t forget to include the cost of funding delivery.
- Check compliance. Missing forms or late lodgement can disqualify an otherwise strong bid.
- Ask for feedback whether you win or lose. It’s the fastest way to improve.
How quickly does government pay?
This is one of government work’s big advantages. Under the Commonwealth’s pay-on-time policy, non-corporate Commonwealth entities must pay suppliers within 20 days of receiving a correctly rendered invoice on contracts valued at $1 million (GST inclusive) or less. If payment is late, they must pay interest on the outstanding amount where the interest exceeds $100.
State governments have their own policies, and head contractors in the private sector often pay on longer terms. Either way, the key is a correctly rendered invoice — get the format, references and approvals right to avoid delays.
A worked example (illustrative)
A small facilities maintenance business with six staff wins a two-year Commonwealth contract to maintain grounds and minor building works at a regional site, worth about $38,000 a month.
To mobilise, it needs a second ute and trailer, extra equipment and two new staff — about $95,000 up front, plus wages and materials for the first month before invoicing. With invoices paid within 20 days of a correct invoice, the first payment arrives around seven weeks after work starts.
The owner maps the cash timeline: the deepest point is about $140,000 before the first payment lands, after which monthly receipts cover monthly costs comfortably. The contract’s gross margin is about 28%, adding roughly $10,600 a month of gross profit.
She arranges equipment finance for the vehicle and trailer, and a line of credit for the mobilisation and first-month gap — the kind of structure described in our big contract funding playbook. Priced into the bid, the cost of finance is simply part of the job. If you’ve won — or are bidding for — a contract like this, you can find out what funding could support delivery in about a minute.
Should you start as a subcontractor?
For many small businesses, the easiest way into government work is through the side door. Large government projects are often delivered by head contractors who need specialist subcontractors, and they tend to value reliable local suppliers. Subcontracting lets you:
- build a track record on government projects without carrying the whole contract;
- learn the documentation, safety and reporting standards that government clients expect;
- earn references you can use in your own bids later.
The trade-off is payment terms. Head contractors in the private sector often pay on longer terms than the Commonwealth’s 20-day policy, so the working-capital gap can be larger. Map the cash before you sign.
What should you prepare before your first bid?
- A capability statement: one or two pages describing what you do, key projects, team, certifications and contact details.
- Insurance certificates: public liability, professional indemnity and workers compensation, at levels commonly required.
- Policies: work health and safety, quality, environmental and privacy — scaled to your business.
- Case studies and referees ready to go.
- Financial information: some tenders ask for evidence of financial capacity.
- A pricing model that includes overheads, contingency and the cost of funding.
What happens after you win?
Winning is the start, not the finish. Expect a contract negotiation or clarification stage, onboarding with the agency’s systems, and reporting obligations set out in the contract. Keep meticulous records, invoice exactly as the contract requires, and build a relationship with the contract manager. A smoothly delivered first contract is the strongest possible evidence for the next bid.
How do you avoid the cash squeeze of a big win?
Winning a large government contract can be the best thing that’s happened to your business — and a classic trigger for overtrading. Before you sign:
- Map the cash from mobilisation to first payment.
- Budget any new hires properly, including super paid with each pay run — see finance to hire staff.
- Arrange funding before you need it, not the week payroll is due. A line of credit for growth is often the right fit.
- Keep some of your existing customers — don’t let one client become everything.
Won the work? Let’s help you deliver it
A government contract can put your business on a new footing: reliable revenue, defined payment terms and a reference that opens more doors. The right funding lets you mobilise properly without stretching the rest of the business.
Tell us about the contract, the payment terms and what you need to get started. Sending the enquiry takes a minute and doesn’t involve a credit check at that first step. We keep your details with one team instead of circulating them to a pile of lenders, and a specialist rings you back. Accurate contract details help us match the right structure first time.
Frequently asked questions
How do small businesses find government tenders in Australia?
Federal opportunities are published on AusTender, where you can register to be notified of opportunities matching your business profile. Each state and territory has its own portal — for example NSW eTendering, Buying for Victoria, QTenders and Tenders WA. Local councils also advertise opportunities.
Do small businesses really win government contracts?
Yes. The Commonwealth has targets to source at least 25% of procurement by value from SMEs for contracts up to $1 billion, and at least 40% by value for contracts valued up to $20 million. Agencies can also directly engage SMEs for procurements up to $500,000 in some circumstances.
How quickly does the government pay suppliers?
Under the Commonwealth's pay-on-time policy, non-corporate Commonwealth entities must pay within 20 days of receiving a correctly rendered invoice on contracts valued at $1 million or less, and pay interest if they're late (where the interest exceeds $100). State policies vary.
What makes a tender response win?
A compliant response that answers every evaluation criterion directly, backed by specific evidence — past projects, references, capability, methodology and risk management — and a competitive, clearly explained price. Reading the whole tender pack carefully and asking questions within the allowed period both help.
Can I get funding to deliver a government contract?
Yes. Contract working capital covers materials, labour and mobilisation before the first payment arrives. A signed government contract with defined payment terms is often a strong basis for a funding conversation.