In Onvia’s latest study, 10 Hotspots in Government Contracting for 2016, our market analysis team discovered that IT consulting contracts in the state, local and education (SLED) government market grew 16% in 2015 over 2014. Out of nearly 500 unique industry categories analyzed for the report, bids & RFPs related to IT consulting represent the #8 ranked area for growth in the SLED government contracting market.
16% growth for IT consulting stands out as the shining star among IT-related government procurement. In comparison, contract growth for software was 4% and just 1% for both hardware and wireless services.
It’s in the Way Government Uses Technology
Over the past few years, IT contracts for areas such as data center consolidation and cloud services have provided a way to create significant operational cost savings for government agencies. More recently, the Internet of Things (IoT) and advances in open data have given agencies the ability to access siloed data and share large amounts of information.
Now, in seeking to modernize their systems, SLED agencies have grown their contracting volumes for IT consulting projects to address needs such as:
- Protecting data security
- Increasing public access to data
- Ensuring network stability
- Overall cost effectiveness
A recent public sector technology study by Deloitte reinforces some of the key drivers and motivations behind the increased IT consulting contract volumes:
Five macro forces [are at work]: Digital analytics, cloud, the renaissance of core systems, and the changing role of IT within the enterprise. These forces are not just fueling innovation…[they can] disrupt the ways public sector organizations engage with citizens, how work gets done.Deloitte
Which Agencies Issue the Most IT Consulting Contracts?
Onvia’s analysis shows that vendors pursing projects related to IT consulting are most likely to find the largest number of opportunities at the state level. State agencies accounted for a 37% share of bids & RFPs analyzed for the report. IT consulting firms shouldn’t ignore pursuing opportunities at the city level though, which represent a 21% share of the contracts.
Contractors can further narrow their pursuits by focusing their efforts on the top 5 states for issuing IT consulting contracts highlighted in the heatmap below:
How to Get Ahead of the Competition and Win More IT Consulting Contracts
With the awarded contract value of IT consulting contracts averaging $2.7 million across all levels of government and a significantly higher average of $6.7 million at the state level, contractors have the opportunity to secure long-term government clients by embedding their services in large agency system modernization efforts for years to come.
Onvia recommends that businesses who are interested in pursuing these contracts first focus their outreach efforts with state agencies, which have much higher contract values and whose systems are typically large enough to mean long-term business.
It’s also important to note that many of these large projects are often discussed years before issuance of the competitive bid or RFP. Contractors who track early mentions of “IT consulting” and “system modernization” in agency budgets and technology plans can greatly increase their chances of winning more contracts.
IT Consulting Isn’t the Only Growing Segment in Government Contracting
Watch the video below to learn about 9 other contracting hotspots that have seen notable growth rates in bids & RFPs over the last two years: