As revealed in Onvia’s State, Local and Education Procurement Snapshot for Q2 2016, competitive bid & RFP opportunities in the overall SLED contracting market decreased slightly at a rate of -1.4% when compared to the same quarter the previous year. However, when comparing H1 2016 vs H2 2015, SLED market opportunities increased slightly at 0.6%.
Of the four major industry groups examined in the report, the technology group saw a 3.8% rate of growth over the same quarter the previous year. This is the largest rate of growth among the industry groups that were examined for the quarter.
Special to this blog is an easy-to-share infographic that depicts what happened in the Q2 2016 SLED technology contracting market:
Continued Growth in Technology Contracts Supported by a Number of Purchasing Hotspots
The limited growth results for the overall SLED market in Q2 2016 is supported by other evidence that the estimates of economic growth and government spending have been coming in slightly below expectations. According to Onvia Market Analyst Paul Irby, these estimates include downgrades in GDP, the federal government delaying interest rate increases, and reductions in the pace of government spending.
But, limited growth in the overall market doesn’t mean slow growth for all procurement. The SLED market is vast and fragmented with thousands of agencies purchasing a wide range of products and services. In the SLED market, there are always hotspots and trending areas of growth that signal opportunities for vendors to sell their related products and services.
In technology purchasing specifically, strong growth is supported by increased bid requests for IT services and products such as IT consulting and GIS. We discuss some of those areas in more detail in this analysis.
Michael Keating, Senior Editor for American City and County, interviewed procurement thought leaders and mayors to offer additional commentary on bright spots in the SLED contracting market.
Highlighted Technology Sub-Category: IT and Network Consulting Services Lead at 12.2% Growth
IT consulting/network consulting services saw the largest rate of increase in bid & RFP opportunities for the quarter at 12.2%. The second highest rate of increase was in software contracts, at 8.3%.
Education Agencies Saw the Most Growth in Technology Purchasing for the Quarter
When looking at the distribution of technology projects issued in Q2 2016 by level of SLED government, projects issued by education agencies stood out with a 7.3% rate of growth. This continues a positive trend in education technology purchasing as Q1 2016 saw a 7.0% increase. Following education was a 5.1% rate of growth by state agencies and a 2.1% rate of growth by local governments.