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3 Trends Shaping State & Local Contracting Growth in 2015

Onvia’s 3 Trends Shaping State & Local Contracting Growth in 2015 white paper reflects on important trends that are expected to shape government contracting this year for those vendors selling into the highly fragmented state, local and education government markets. This white paper is free for GovProp members and is available directly from Onvia’s website.

HIGHLIGHTS FROM THE WHITE PAPER INCLUDE:

A look back at 2014:

Beginning in the 2nd quarter of 2014, Onvia analysts noticed a slowing trend in State, Local and Education (SLED) contracting opportunities. The report includes a look into some of the factors that affected contracting growth rates in 2014 including:

  • The midterm elections
  • Reduced bond investment
  • Slowing tax revenue growth
  • Uncertainty with federal grants
  • Agency financial obligations regarding entitlements and pensions
  • Renewed commitment to backfill state & local ‘rainy-day’ funds
  • Greater use of cooperative purchasing contracts (reducing the number of bidding opportunities)

 

A look forward to 2015:

Onvia analysts identified three factors expected to impact the state, local and education procurement environment in the year ahead including:

1. An expected rebound in state & local tax revenues and bond investment, presenting opportunities for new infrastructure projects and increased general spending:

Moody’s predicts that, “State tax revenues will recover with the economy next year after a weak fiscal 2014”, adding, “Continued gains from sales and personal income taxes will help local government collections regain prerecession peaks by next year.”

2. The impact of new technology adoption within non-IT industries including:

  • Public Safety
  • Student Safety
  • Education
  • Citizen Participation
  • Road Infrastructure

 

3. Continued growth in cooperative purchasing activity which may decrease the volume of competitive bid opportunities and impact traditional go-to-market strategies:

Cooperative purchasing is a broad trend that is having an impact on the volume of SLED competitive opportunities (bids & RFPs). For example, while total SLED opportunities in 2014 (Q1-Q3) were up 1.5%, certain commodity categories like furniture and educational supplies were down by 5-6% over the same period. Coops are boasting rapid growth in agency adoption and this change affects how vendors may choose to go-to-market in the public sector.

Vendors who currently sell products or services into state, local and education governments are encouraged to learn more about the 2015 SLED contracting market by requesting the full report for free from Onvia’s website.

 

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