For government contractors whose experience is limited to the federal government market, how to approach government sales at the state, local and education (SLED) level can be a bit of a mystery. With fifty states and thousands of local governments, where do you begin? How do you properly size your market?
In January 2016 I had the chance to sit down with GovBizConnect co-founder and CEO Tom Skypek to help contractors better understand how to strategically approach the SLED contracting market. This is a re-post of part 2 of the interview series that appeared originally on the GovBizConnect blog here. If you missed part 1, click here.
This article has been refreshed to reflect our latest analysis as seen in Onvia's State & Local Procurement Snapshot for Q4-2015
Are there any industries in which there is particularly significant growth occurring in the SLED market right now?
Yes, Tom, there are. One of them is IT/Telecom which saw a 11.3% increase in published bid & RFP volumes in Q4 – 2015 vs the same quarter in 2014, the most notable growth rate increase of all major industries that sell into SLED. Here’s a chart showing how growth in IT/Telecom has played out on a quarterly basis over the last couple of years:
Part of this growth could easily be attributed to IT/Telecom increasingly playing a role where it hasn’t before, or the rise in projects relating to the Internet of Things. The smart cities movement is one major motivator that has really helped to build that argument, especially in local government.
Additionally, the growing popularity of cooperative purchasing contracts among SLED agency buyers isn’t necessarily affecting the total amount of goods that are purchased in a given industry, but it is certainly affecting where goods from a few industries are purchased. Onvia put together an index to help rank the industries that are the best fits for cooperative contracts. Companies that sell office equipment, IT/telecom products, transportation equipment and industrial supplies all stick out as areas where more purchasing of these goods is happening through cooperative contracts. Companies in industries that are “above average” in the chart below should be assured that their product or service is available on cooperative contracts as agencies are increasingly buying from these industries using cooperative vehicles.
One of the challenges facing federal contractors is the continued budget uncertainty and periodic threats of a federal government shutdown. Many state governments have similar budgetary challenges. How does this business risk manifest itself in the SLED market?
Budgetary challenges are certainly an issue at all levels of government. First, federal contractors who are afraid that federal government shutdown may affect their business, can help to “soften” that potential blow by diversifying their range of buyers across multiple levels of government.
Other trends in state government procurement spend have helped to alleviate their budgetary issues while continuing to service their community and vendors. Some of these trends include: Streamlined eProcurement, consolidating systems and contracts into fewer/larger contracts, buying through cooperative purchasing entities, using multiple award schedules (MAS) and limiting formal bids to only the largest purchases. We recently spoke with Chief Procurement Officers from California, New Mexico, Idaho, Voight Shealy Education and Outreach Director for leading national purchasing cooperative NASPO ValuePoint, and Michael Keating of American City & County Magazine to get a full-perspective on state spending trends that impact budgets.
What is the best resource for a company to get educated on the contract vehicles available in a particular state?
For individual state contract vehicles I would recommend visiting the procurement websites for each state. Furthermore, the Association of Procurement Technical Assistance Centers has government contracting advisers ready to assist contractors and help them maximize their success available in every state. Here’s where vendors can find the local PTAC best suited for their efforts: http://www.aptac-us.org
What are the most common products & services you offer to federal contractors entering the SLED market?
Onvia offers a variety of products for federal contractors who are entering the SLED market:
- Project Center allows contractors to access past, current and future government projects in a single location. This product is used by our clients on a daily basis and new, relevant bids & RFP are delivered to them daily.
- Term Contract Center helps our clients build and maintain a government sales pipeline by helping them target and identify long-term, multi-year contracts. This is a trend growing in popularly in the SLED market as mentioned previously.
- Spending Forecast Center is an advanced intelligence tool that allows contractors to search within budget and planning documents, to help forecast future bid & RFP opportunities years before they are released. Our clients are able to use this tool to set up government sales well before the bid or RFP is even published.
- Agency Center is a unique tool that delivers deep firmographic information including up-to-date key agency decision makers and purchase history. Our clients use Agency Center to better inform their agency research, outreach and marketing efforts.
- Vendor Center helps contractors navigate competitive research in the vast and fragmented SLED market by tracking their competition in a convenient dashboard that allows our clients to see recent awards, identify areas of regional strength and weakness and reveal competitive gaps.
- Purchase Order Analytics is a comprehensive purchase order database that can be used to do pricing research. Like federal government contracting, accurate pricing can make or break a bid response and this tool allows our clients to see what agencies are the top buyers of their product or service as well as insight into what agencies are paying for their offerings.
What is the best way for a federal contractor to learn more about Onvia’s capabilities?
The best way for contractors who are interested in learning more about how Onvia can help them succeed in the SLED market is to contact us or request a free demonstration by clicking the button below.