Local Government Contracting Opportunities Are Rebounding

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Cooperative purchasing is still gaining steam, but IT purchases are making up for bid and RFP losses elsewhere, according to a new third quarter report.

Government state, local and education (SLED) contracting opportunities grew slightly in the third quarter of 2015, the first positive quarter in five, a promising sign for next year, according to a new Onvia report.

The Seattle-based government business intelligence company’s procurement snapshot shows SLED bid and request for proposal (RFP) activity increased .3 percent after a “noticeable decline” at the end of 2014.

Bids have been limited by the rise of cooperative purchasing and the sharing of contracts across agencies—and don’t expect the use of that cost-saving measure to decrease.

Instead, third quarter growth was spurred by local governments, up 1.3 percent, and education agencies, up 3.1 percent, according to the report:

Over the coming year, the extent of positive growth will likely depend on several factors such as the pace of economic recovery, fiscally challenged state governments and continued movement toward non-traditional forms of procurement that can reduce the number of formal bids.

Also factoring into the uptick was a 4.5 percent spike in IT/telecom purchases, up 388 bids and RFPs to 8,990 since this time last year, driven by state agencies. Consulting and software made up the majority of those purchases.

% Annual Change In Projects Q3 ‘15 VS. Q3 ‘14 (Onvia)

State agencies were the only ones in the SLED market to see a continued overall decline in bids and RFPs from 28,424 to 27,476, a 3.3 percent decrease.

Growth Rates In Bid/RFPs By Quarter (Onvia)

Faced with budget deficits and pressures, saving money through the buying process is more of a state agency priority, hence increasing automated procurement.

Onvia’s full report can be read here.

Dave Nyczepir is a News Editor for Government Executive’s Route Fifty.

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