Government sales begin with a bid process and are rarely directed to the open markets. For example, when the government chooses to sell military equipment, it is done under the Government’s 1033 Law. States must participate in the program in order to acquire excess military equipment for their law enforcement organizations.
Commercial sales differ in that sales may not be open to bid processes, unlike sales that are part of a complex corporate project. For example, many engineering projects begin with a proposal developed by the company when new equipment or alterations to the business operation requires multiple sources for purchasing sources. This usually occurs in manufacturing when new products are developed and equipment must be upgraded to meet the new products’ processing designs. A facility may also be required by their municipality to make alterations to their plant layout which involves redesigning the interior or exterior of an existing structure.
Government Sales and Commercial Sales Explained
Time is another factor that creates the difference between these two types of sales. In government, funds must go through an Appropriations Committee before government sales can be approved. Commercial sales may require only the approval of those responsible for requisitioning or purchasing and a final approval by the business owner.
The length of time it may take for government sales to be approved is directly related to the movement through various government departments that may be deluged with priority projects for approval. Commercial sales that are not undergoing a bid process take less time due to less bureaucracy. Most commercial sales take less than a few weeks for approval.
Can Government Sales Be Processed Like Commercial Sales?
The biggest criticism of government sales is the length of time it takes to get funding and approval than it does for commercial sales.
The underlying factor in government sales is that taxes pay for government sales. Commercial sales are paid for by business owners through existing revenue generated by previous sales and marketing campaigns. Unless there is a more expeditious way to acquire funding from taxes, it is unlikely government sales can be modeled along the lines of commercial sales.