Think of a business capability statement as your company’s resume. But instead of applying for a job, you’re trying to win a government contract. It’s a sharp, focused marketing document that lays out your core skills, your track record, and exactly why your business is the right choice for the job.

This single document is often the very first impression a government procurement officer has of you. Get it right, and it becomes your ticket to winning lucrative government tenders. This guide will show you exactly how to build one that stands out.

Why Your Business Capability Statement Is Key to Winning Government Contracts

Finding it hard to get noticed by government buyers? You’re not alone. In the world of government procurement, being great at what you do simply isn't enough. You need a specific tool that quickly and clearly communicates your value, your reliability, and your expertise.

That tool is your business capability statement.

It’s the document that moves your business from the ‘maybe’ pile to the shortlist. It does this by proving you are a low-risk, high-value partner for the Australian Government.

Your Gateway to Government Work

For many small and medium businesses (SMEs), a well-crafted capability statement is the primary way to get a foot in the door. It serves a few critical functions:

A Powerful First Impression: Procurement officers are busy. Your statement gives them a scannable snapshot of your business, letting them assess your suitability in minutes.

Shows You’re a Pro: A polished, well-structured document immediately signals that you understand government processes and are serious about working with them.

Highlights Your True Value: It’s your chance to go beyond a simple list of services and show how you deliver genuine "value for money"—a core principle of the Commonwealth Procurement Rules.

Outshining the Competition

Imagine this common scenario: a regional IT firm is bidding against a huge, established competitor for a Department of Health contract. The bigger firm submits a generic company brochure. But the SME submits a business capability statement tailored specifically for the tender response. It highlights their security-cleared staff, their recent success on a local council health project, and their agility as a smaller, more responsive supplier.

By speaking directly to the government's priorities, the SME proves they aren't just capable—they are the ideal fit.

This is what wins government contracts. The Commonwealth Government spends over $70 billion annually on procurement, and a sharp business capability statement is vital for getting a slice of that pie.

Information security is another huge factor in many government tenders. Highlighting specific qualifications like a dese isms certification in your statement immediately builds credibility and shows evaluators you take data security seriously.

Business Capability Statement vs Company Brochure at a Glance

It's easy to confuse a capability statement with a standard marketing brochure, but they serve completely different purposes. A brochure is designed to sell to a broad commercial audience, while a capability statement is a targeted tool for a very specific government buyer.

This table breaks down the key differences:

Element

Business Capability Statement (For Government)

Standard Company Brochure (For Commercial)

Purpose

To demonstrate competence and suitability for a specific government tender. Its goal is to prove you are a low-risk, high-value partner.

To generate leads and promote brand awareness to a wide commercial audience. Its goal is to create interest and drive sales.

Audience

Government procurement officers and evaluation panels who are time-poor and risk-averse. They are looking for compliance and capability.

Potential customers, clients, and the general public. They are looking for solutions to their problems and are influenced by branding and emotion.

Content

Focused on core competencies, past performance (especially government projects), relevant certifications (e.g., ISO 27001), security clearances, and specific company identifiers like ABN and UNSPSC codes. The language is factual and evidence-based.

Features broad service descriptions, brand messaging, customer testimonials, and emotional calls-to-action. The language is often persuasive and marketing-focused.

Key Message

"We are a compliant, capable, and reliable supplier who understands your specific needs and can deliver value for money."

"We offer innovative solutions that can help your business succeed."

Primary Evaluation Metric

Value for Money. This is a combination of price, quality, risk, and proven ability to meet the requirements of the tender.

Return on Investment (ROI). This is typically measured in terms of increased revenue, cost savings, or improved efficiency for the customer.

In short, leave the glossy marketing materials for your commercial clients. When you're talking to government, a precise and factual business capability statement is the tool for the job.

The Anatomy of a Perfect Business Capability Statement

Let's stop talking theory and start building. A business capability statement that actually wins work isn't just a brochure. It’s a precision-engineered document, built from four distinct parts. Each one is designed to answer a procurement officer's questions before they even think to ask them.

Nailing these four sections is everything. This is your shot to show you're competent, trustworthy, and the best choice to deliver real value for the Australian taxpayer's money.

Core Competencies That Align with Tender Needs

This is the "what you do" part, but it needs a government-specific filter. Don't just chuck in a generic list of your services. You have to frame them as direct solutions to government problems. Your goal is to mirror the exact language you see in tender documents on platforms like AusTender.

Think of it like SEO for government buyers. They're scanning for keywords that match their immediate needs.

Vague commercial-speak: "Cloud Solutions"

Government-ready language: "Provision of IRAP-assessed, PROTECTED-level cloud hosting services within Australian sovereign data centres."

Vague commercial-speak: "Project Management"

Government-ready language: "Delivery of complex ICT projects using PRINCE2 and Agile methodologies for Commonwealth Government agencies."

See the difference? This specific wording proves you don't just know your stuff; you know their world. Use bullet points here to make it scannable, and always lead with your most specialised and relevant services.

Key Takeaway: Stop making evaluators connect the dots. Use precise, keyword-rich phrases that are a direct reflection of what they're looking for. It’s an immediate signal that you're a serious contender who has done their homework.

Differentiators That Make You the Obvious Choice

If 'Core Competencies' is what you do, 'Differentiators' is why they should pick you over the dozen other companies that do the same thing. This is easily one of the most critical parts of your statement, and it's shocking how many businesses get it wrong or skip it entirely.

This isn't the place for fluffy marketing claims like "we're the best" or "we provide excellent service." You need concrete, factual statements that actively reduce the perceived risk for the government buyer.

Powerful differentiators that get attention include:

Security Clearances: "Our team includes ten engineers with active NV1 security clearances, ready for immediate deployment on sensitive projects."

Sovereign Capability: "As a 100% Australian-owned and operated SME, we provide onshore technical support and ensure all client data remains within Australia."

Panel Memberships: "Approved supplier on the Digital Marketplace and the Defence Support Services (DSS) Panel."

Specialist Certifications: "Certified Indigenous business with Supply Nation, supporting government Indigenous Procurement Policy (IPP) targets."

These points are hard facts. They're verifiable and speak directly to government priorities like security, sovereign supply chains, and social procurement targets.

Past Performance That Proves Your Reliability

This section is where you deliver the proof. For a government evaluator, past performance is the single best predictor of future success. They are paid to be risk-averse, so showing you've already delivered similar work is the fastest way to build their confidence.

Structure this part for maximum clarity. For each project, give a snappy summary including:

Client: The specific government agency or prime contractor.

Project Title: A short, descriptive name for the work.

Contract Value: The dollar figure.

Key Outcome: A single sentence explaining the tangible result you delivered.

Example for a Cybersecurity Firm:

Client: Department of Home Affairs

Project: ASD Essential Eight Uplift Programme

Contract Value: $450,000

Key Outcome: Increased the agency's maturity level across all eight mitigation strategies, successfully passing an independent security audit.

Example for a Construction Company:

Client: Department of Defence

Project: RAAF Base Tindal Facilities Upgrade

Contract Value: $1.2 Million

Key Outcome: Delivered upgraded communications infrastructure on time and 5% under budget, with zero safety incidents.

For a deeper dive, check out our guide which includes a complete business capability statement example showing exactly how to lay out your past projects for the best impact.

Company Data: The Non-Negotiables

Think of this final section as your business's data card. It has to be accurate, complete, and easy to find. It contains all the essential details a procurement officer needs to look you up and log you in their system. Forgetting any of this can look unprofessional.

Use a simple two-column table or a clean list with the following:

Legal Business Name: As registered with ASIC.

Trading Name: If you use one.

Australian Business Number (ABN): Your 11-digit ABN.

Australian Company Number (ACN): If you have one.

Key Contact Person: Name, title, phone, and email.

Company Website: Make sure the link works!

Industry Codes: Your relevant UNSPSC codes.

Pre-qualifications: List crucial memberships like the Defence Industry Security Program (DISP) or any state-based pre-qualification schemes.

Making this info crystal clear shows you’re organised and easy to work with. It's a simple but vital finishing touch on a document designed to open doors.

Tailoring Your Statement for Maximum Impact on AusTender

A generic, one-size-fits-all business capability statement is one of the fastest ways to get overlooked in a government tender. If you're sending the same document to the Department of Defence as you are to Services Australia, it signals you haven't done your homework.

Real success comes from treating each statement as a direct, specific answer to a single agency's problem. It’s about proving you're not just a supplier, but the right partner for this exact contract.

Deconstructing the Request for Tender

Before you write a single word, you need to become an expert on the tender you're chasing. Your first job is to open up the Request for Tender (RFT) documents and find the "Evaluation Criteria" or "Conditions for Participation" section.

This is your treasure map. It tells you exactly what the government buyer cares about most.

Look for the keywords and phrases they use over and over. Are they focused on "whole-of-life costs," "sovereign industrial capability," or "demonstrated experience with PROTECTED-level data"? Circle them. Highlight them. These are the exact terms you need to weave into your business capability statement.

This process is about aligning what you do best with what they need most.

As you can see, a winning statement always starts with a deep dive into the tender's requirements, which then shapes how you present your track record and company details.

Mirroring Language: A Real-World Example

Let's say you're looking at an IT services tender on AusTender for the Australian Taxation Office (ATO). The RFT keeps mentioning "Agile methodology," "IRAP assessment," and "onshore technical support."

A generic business capability statement might list "Project Management" as a core competency. That’s okay, but it’s a huge missed opportunity. To tailor it, you’d rephrase it to sound like this:

"Delivery of complex ICT projects for Commonwealth agencies using Agile methodologies, ensuring transparent and iterative development cycles."

See the difference? Instead of a vague "Cybersecurity Services," you get specific and use their language:

"Provision of IRAP-assessed cloud services, ensuring compliance with Australian Government security protocols."

"Guaranteed onshore, security-cleared technical support available 24/7 to meet ATO operational demands."

This direct mirroring shows the evaluator, in seconds, that you get their world. You’re making their job easier, and that’s always a winning strategy. If you're new to this, it's worth exploring our complete guide to AusTender and Australian government contracts to get a feel for how these documents are structured.

Aligning Past Performance with Future Needs

This customisation needs to go deep into your 'Past Performance' section. Don't just list your greatest hits. Instead, cherry-pick the projects that look the most like the work described in the RFT.

If the ATO tender is about migrating old financial data to a new cloud platform, you should spotlight any past projects involving data migration, financial systems, or work with other federal agencies.

Here's a generic entry:

Client: Department of Industry

Project: Website Overhaul

Outcome: Launched a new public-facing website.

And here's a tailored entry for that ATO tender:

Client: Department of Industry

Project: Secure Database Migration

Outcome: Successfully migrated 3TB of sensitive financial data to a PROTECTED-level cloud environment with zero downtime, directly aligning with the ATO’s core requirement.

This level of detail is what separates the winners from the pile. Over 80,000 contracts are awarded through AusTender each year. In that kind of market, a precisely tailored business capability statement is your most powerful tool to prove you belong.

You can dig into the numbers yourself by exploring the latest Australian government contract reports. This meticulous approach is how you stand out.

Formatting and Design That Gets You Noticed

A procurement officer might spend only a few seconds deciding if your business capability statement is worth a proper read. In that tiny window, before they even get to your core competencies, they're making a snap judgment about your professionalism based purely on its presentation.

Let's be blunt: a cluttered, messy document screams disorganisation. On the other hand, a clean, professional, and easily scannable statement says you’re organised, you care about the details, and you’ll be easy to work with. Those are all critical traits for a government supplier.

Keep It Concise and Professional

Your business capability statement is a high-impact summary, not your company's life story. The whole point is to get your value across quickly and clearly.

Optimal Length: Stick to two pages. A single, powerful page can be brilliant, but pushing to four is only acceptable if you have extensive, highly relevant past performance. Any longer, and you've lost them.

Branding: Of course, include your company logo and brand colours, but keep it subtle. Your branding is there to create a professional look, not to distract from the vital information. Just make sure it’s consistent with your website and other corporate documents.

Focus on Readability

Time-poor evaluators love documents that are easy on the eyes. Your design choices must prioritise clarity and scannability above everything else. This isn't the time for wild creative flair; it's about making your information effortless to absorb.

Think about these simple but highly effective hacks:

Font Choice: Use a clean, sans-serif font like Arial, Calibri, or Helvetica. Keep the body text at a readable size—10-12pt is the sweet spot.

White Space: Don't cram every last centimetre of the page with text. Generous margins and spacing between sections make the document feel less intimidating and much easier to navigate.

Strategic Bullet Points: Use bullet points liberally, especially in your 'Core Competencies' and 'Differentiators' sections. They break up text and let an evaluator quickly scan for keywords that match their tender requirements.

A seasoned procurement manager once told us, "If I have to hunt for your ABN or struggle to figure out what you actually do, you've already lost. A clean, easy-to-read layout is non-negotiable for getting your statement seriously considered."

The Only Professional File Format

When you’re ready to send your business capability statement, there is only one acceptable format. You must always save and submit your document as a PDF (Portable Document Format).

Why? Because a PDF locks in your formatting. It ensures your document looks exactly as you intended, no matter what device or operating system the procurement officer uses. It prevents accidental edits and just looks polished and professional. Sending a Word document is a common rookie mistake that can make your business look amateur.

If you're just starting out, using a well-structured template can save you hours of guesswork. It ensures you include all the necessary sections in a layout that government buyers expect to see. You can find more guidance and a helpful resource in our post on finding the right business capability statement template for Australian businesses. A solid template is your shortcut to a document that gets noticed for all the right reasons.

Common Mistakes That Will Instantly Disqualify You

You’ve poured hours into crafting what you think is a brilliant business capability statement. The last thing you want is for it to land in the bin because of a simple, avoidable mistake.

Government procurement officers are buried under paperwork and are incredibly risk-averse. They are actively looking for reasons to shrink the pile of documents on their desk. Don't give them an easy one.

Making even one of these common mistakes sends a clear signal: your business lacks attention to detail. In the world of government contracts, that’s a fatal flaw. Think of this section as your final quality check before you hit send.

Vague Claims and Meaningless Jargon

This is, without a doubt, the most common mistake we see. Businesses litter their statements with impressive-sounding corporate fluff that tells the evaluator absolutely nothing. Your capability statement is a proof document, not a marketing brochure.

Every single claim you make needs to be backed up with a hard number, a specific outcome, or a concrete detail.

What Not to Do:

"We provide innovative, world-class solutions."

"Our team is dedicated to customer satisfaction."

"We are a leading provider of strategic consulting services."

These phrases are just noise. They’re clichés that do nothing to prove you can do the job or set you apart from the hundred other businesses saying the exact same thing.

What to Do Instead:

"We cut operational costs for Client X by 15% in the first year by implementing our proprietary software."

"Our dedicated, Australian-based account management team maintains a 98% client retention rate."

"We successfully advised the Department of Defence on a $20M ICT consolidation project, delivering the final report six weeks ahead of schedule."

See the difference? It’s all about tangible proof.

Ignoring the Page Limit

When a procurement officer sees a ten-page business capability statement, they don’t think "Wow, this company is experienced." They think, "This company can't follow instructions and doesn't respect my time."

Your ability to communicate complex information concisely is a key skill they are assessing.

A lengthy business capability statement doesn't make you look more experienced; it makes you look disorganised. Brevity and clarity are signs of a confident, professional organisation.

Stick to the sweet spot: two pages. If you have an extensive list of highly relevant past projects, you might—might—stretch to four. But that is the absolute maximum.

Formatting Fails and Technical Glitches

It’s not just about length. Sloppy formatting makes your document a chore to read, and an annoyed evaluator is not going to be your advocate.

Avoid these critical, yet common, formatting errors:

Sending a Word Document: Never, ever do this. Always submit your statement as a PDF. It locks the formatting in place, looks professional, and ensures what you see is what they see.

Tiny Fonts and Walls of Text: Don't try to cram everything in. Use a clean, readable font like Arial or Calibri (10-12pt) and use white space generously. It makes the document scannable and easier to digest.

Typos and Grammatical Errors: A single typo can destroy your credibility. It screams carelessness—a trait no government agency wants in a supplier. Proofread it yourself, then get a colleague to proofread it again.

These might feel like small details, but in the hyper-competitive world of government tenders, they are often the silent killers that decide who gets shortlisted and who gets ignored.

Using Your Statement to Tap Into Special Procurement Programs

A sharp business capability statement does more than just list what you do. It's a strategic tool that can open doors to specific government initiatives designed to support diverse Australian businesses. When you prominently feature your eligibility for these programs, you turn a government policy goal into a powerful competitive edge.

Think of it this way: government departments aren't just buying services; they have clear targets to engage with certain types of businesses. Your statement is the first and best place to signal that partnering with you helps them meet those important objectives.

Highlighting Indigenous Ownership and the IPP

The Commonwealth's Indigenous Procurement Policy (IPP) is one of the most significant social procurement initiatives in the country. If you're an Indigenous-owned business, your business capability statement is the prime vehicle to showcase this. Your goal is to make it impossible for evaluators to overlook.

It’s not enough to just mention your status in passing. You need to make it a central pillar of your document.

Prominent Logo Placement: Put your Supply Nation certification logo (or other relevant logo) right up top, near your own company logo on the first page.

Clear Statement of Status: In your 'Company Data' or 'Our Differentiators' section, add a clear, bolded line: "A 100% Indigenous-owned business, certified by Supply Nation."

Showcase Community Impact: Briefly explain the social value you deliver. For example: "Partnering with us directly contributes to Indigenous employment outcomes in regional Queensland."

This makes your status a core part of your value proposition. The IPP is a multi-billion dollar programme that gives Indigenous businesses a real advantage in the procurement process. Your business capability statement is your ticket to getting a piece of this prioritised market. You can dig into the details on the Indigenous Procurement Policy on the NIAA website.

Showcasing Your SME and Regional Status

Just like the IPP, governments at both federal and state levels have targets for spending with Small and Medium Enterprises (SMEs) and regional businesses. Highlighting this status can give you a distinct edge over larger, city-based competitors.

This simple act shows evaluators that awarding you a contract helps them fulfil their own policy goals of supporting the broader Australian economy.

Key Insight: Never assume a procurement officer will know you're an SME or a regional business just from your address. You have to state it clearly and explicitly in your 'Differentiators' section.

How to phrase your advantage:

For SMEs: "As an Australian-owned SME, we offer the agility and direct access to decision-makers that larger corporations can't match, ensuring a responsive and personalised service."

For Regional Businesses: "Headquartered in Toowoomba, QLD, we have a deep understanding of regional challenges and are committed to building local capability and employment opportunities."

This approach reframes your size or location from a potential weakness into a strategic strength that aligns directly with what government buyers are looking for.

A key part of this is proving you can deliver. Make sure you understand the difference between your business's capability and its capacity, as this can be a deciding factor. Check out our detailed article explaining the critical distinction between business capability vs capacity to strengthen your statement even further.

When you articulate these points clearly, your business capability statement becomes more than a list of services—it becomes a compelling argument for why you are the ideal partner to help government achieve its economic and social goals.

Common Questions Answered

We get a lot of questions about getting capability statements right for government tenders. Here are the most common ones, with straight-talking answers to help you navigate the process.

How Often Should I Update My Business Capability Statement?

Think of it in two parts. You should have a 'master' business capability statement that you dust off and review every six months. It’s also a good idea to update it any time you hit a major milestone, like winning a significant contract or earning a new industry certification.

But here’s the most important part: you must tailor a specific version for every single government tender you bid on. That means tweaking the language, highlighting relevant projects, and making sure it directly mirrors the requirements and keywords used in that specific opportunity. A generic, one-size-fits-all document just won't cut it.

Should I Include Client Testimonials or References?

In short, no. Government evaluators are time-poor and data-driven. They prioritise hard facts over subjective opinions.

Your limited space is much better used for a punchy 'Past Performance' section that details the client agency, the contract value, and the measurable results you delivered. That's the kind of concrete proof that de-risks your tender response in their eyes.

You can simply add a line at the end: "References available upon request". If the tender specifically asks for references, they'll tell you how and where to provide them separately.

What Is the Single Most Important Section?

If you have to pick one, it's your 'Past Performance'. This is arguably the most critical section for any government buyer.

Why? Because it provides cold, hard proof that you can do what you say you can do. It's the ultimate risk-reducer for them. Strong, relevant examples show you’ve successfully delivered similar work before, which is exactly what they need to see.

A very close second is your 'Core Competencies'. This is where an evaluator can quickly tick the box and confirm you actually meet the fundamental needs of the tender. A well-written business capability statement makes this information impossible for them to miss.

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