ONVIA STATE & LOCAL PROCUREMENT SNAPSHOT /// Q2 2015

Transcription

1 ONVIA STATE & LOCAL PROCUREMENT SNAPSHOT /// Q2 2015

2 MARKET SNAPSHOT Market Snapshot In the second quarter of 2015, government SLED (State, Local and Education) contracting opportunities decreased slightly versus Q2 14, however three different indicators point to growth in contracting activity over the coming year. Change in Market Opportunities 136,328 Q2 15 Onvia s database shows that procurement activity in bids and RFPs decreased slightly (-0.8% in Q2 15 vs. Q2 14), indicating a relatively flat overall market and an improvement over last quarter s rate of -1.9%. declines. Onvia s data supports this conclusion, with IT consulting for Q2 15 being up significantly over the same period last year. 3) Onvia s data points to growth based on the overall trend in bids and RFPs for RFPs suggesting there is an overall trend toward more efficient purchasing. Our guest contributor this quarter is Michelle Hermelee, industry expert in government contracting and President of BH Sky Associates, a Onvia has identified three indicators state and local agencies. The annualized leading consulting firm that advises that point to growth in competitive rate of change in quarterly opportunities vendors on strategies for successfully opportunities over the next 6-12 months: has improved from -4.9% in Q4 14 to competing for government contracts in 137,469 Q2 14 1) American City & County s 2015 mid-year survey of 300 government officials points to growth in spending: Four out of five survey respondents will -1.9% in Q1 15, to -0.8% in Q2 15, a consistent upward shift even though Q2 15 absolute numbers continue to be relatively flat. today s environment of more efficient procurement. Michelle s article will discuss how to leverage cooperative purchasing using spend the same amount or more in the This quarter s slight reduction in GSA schedules to boost sales and control Annualized Rate of Change by Quarter 2nd half of 15 versus the 2nd half of 14. Major industries expected to grow include public works and transportation, competitive opportunities does not necessarily mean lower spending. Factors such as cooperative purchases, below expenses in the large state and local government marketplace. consistent with current trends in threshold buying, and consolidation -0.8% Q2 15 Onvia s data from bids and RFPs in the infrastructure related sectors. into fewer/larger contracts may affect the number of projects that go out for bid/rfp. -1.9% Q % Q4 14 2) According to Gartner s 2015 forecast for state and local government, technology budgets are expected to grow during 2015 after two years of Onvia s awards database indicates typical award values have been increasing each year since 2012 despite the recent quarterly declines in volume of bids and 2

3 MARKET SNAPSHOT SLED Project Counts Over Time BIDS & RFPs Onvia s database shows clear seasonality trends in the SLED market based on eight trailing quarters of activity. Because of seasonality, we measured growth in competitive bids and RFPs by comparing same quarter year-over-year activity. Q2 15 saw a decrease of 0.8% versus the same quarter last year. This is a smaller rate of decrease compared to last quarter s decrease of 1.9%. 150,000 Q2 14 Q ,000 90,000 60,000 30,000 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Source: Onvia project database of state, local and educational agency bids and RFPs 3

4 Industry Snapshot GROWTH RATES IN BIDS/RFPs BY QUARTER (vs previous year same quarter) INDUSTRY SNAPSHOT We looked deeper into activity by industry. The following charts show annual rates of change for bid & RFP activity each quarter compared to the same quarter the previous year. Growth rates improved in Q2 15 across each major industry group. IT/Telecom 1 1 Hardware Consulting Wireless/Telecom Software ,095 10,943 Rate of Change: -1.4% Business 1 1 Healthcare Office Equipment Educational Professional Financial Food Public Safety ,918 25,977 Rate of Change: -3.5% Architecture/ Engineering Construction & Supplies AEC Water/Energy ,200 80,684 Rate of Change: -0.6% OMT 1 1 Operations & Maintenance Industrial Supplies Transportation/ Vehicles ,445 29,341-1 Rate of Change: -0.4% 4

5 INDUSTRY DETAIL BY SUB CATEGORY Industry Detail by Sub Category PROJECT COUNTS Q2 15 vs Q2 14 IT/TELECOM % Annual Change in Projects Q2 '15 vs. Q2 '14 BUSINESS SERVICES % Annual Change in Projects Q2 '15 vs. Q2 ' % % -1.1% -1.4% -2.4% -3.5% - IS Consulting/ Network Consulting -0.8% Software -5.5% -5.9% Wireless/ Hardware Telecom -1-1 Financial Healthcare Public Safety Professional Educational -9.0% -9.3% Food Office Equipment ARCHITECTURE/ENGINEERING/CONSTRUCTION % Annual Change in Projects Q2 '15 vs. Q2 '14 OPERATIONS/MAINTENANCE/TRANSPORTATION % Annual Change in Projects Q2 '15 vs. Q2 ' % 2.0% 3.6% % % -2.6% Architecture/ Engineering Water & Energy Construction & Supplies Transportation/ Vehicles Industrial Supplies Operations & Maintenance Note: The four larger industry groups shown earlier were tracked at the project category level; due to some projects being categorized into more than one subcategory and some projects not classified into subcategories, the sum of the subcategories may not equal the counts of the overall category. Category growth rates may not be fully consistent with the rates of subcategories. 5

6 Agency Snapshot GROWTH RATES IN BIDS/RFPs BY QUARTER (vs previous year same quarter) AGENCY SNAPSHOT We examined bid/rfp volume by level of government. As the charts below indicate, rates of change in Q2 15 are either moving upward or sideways depending on the level. Local government obtained positive growth with a rate of 0.3%. State Government Agencies Universities Cities Towns Counties K-12 School Districts Community Colleges State Local Education Special Districts ,513 Rate of Change: -2.2% 84,455 Rate of Change: 0.3% 18,501 33,751 84,684 17,892 Rate of Change: -3.3% 6

7 AGENCY DETAIL BY SUB CATEGORY Agency Detail by Sub Category PROJECT COUNTS Q2 15 vs Q2 14 To provide further insight into each of the three larger agency categories, we broke out rates of change in opportunities for the current quarter by major industry sectors to highlight general areas of expansion and contraction taking place within each type of agency. 1 1 STATE AGENCIES RATE OF CHANGE % Annual Change in Projects Q2 15 vs Q2 14 There were four instances where an industry group within a given level of government showed a positive rate of change: Business services (state), AEC (local), OMT (local), and OMT (education) % 0.5% -6.9% -4.3% -1 IT/ Telecom Business Architecture/ Engineering/ Construction Operations/ Maintenance/ Transportation LOCAL GOVERNMENT RATE OF CHANGE % Annual Change in Projects Q2 15 vs Q2 14 EDUCATION RATE OF CHANGE % Annual Change in Projects Q2 15 vs Q IT/ Telecom -2.8% Business 2.1% 0.6% Architecture/ Engineering/ Construction Operations/ Maintenance/ Transportation % IT/ Telecom -10.6% Business -2.6% Architecture/ Engineering/ Construction 2.5% Operations/ Maintenance/ Transportation 7

8 QUARTERLY GUEST CONTRIBUTOR COLUMN Quarterly Guest Contributor Column Using GSA to Leverage State and Local Cooperative Purchasing By Michelle Hermelee, President, BH Sky Associates Schedule 70 General Purpose Commercial Schedule 84 Total Solutions Many vendors are aware of the cooperative purchasing trend in State, Local and Education (SLED) government, but not all There are a number of co-op associations or joint buying groups. The two largest programs are NASPO ValuePoint a wide array of products, solutions and services. The cooperative purchasing program is open to government agencies Information Technology Equipment Law Enforcement have considered the potential of these contracts. Defined simply as instances where two (formerly WSCA-NASPO) and GSA Schedules Cooperative Purchasing Program; together in 50 states, all counties, municipalities, cities and towns, tribal governments, public Software Security or more government agencies purchase from the same contract to obtain better pricing they account for about half of the awards issued from these groups in Onvia s database authorities, school districts, and colleges. The program allows state and local governments to and efficiency in procurement, since This article focuses purchase a variety of supplies Facilities Management these purchases are growing steadily: Approximately 15,000 awards in Onvia s database of on the growing market opportunity in GSA s State and Local Cooperative Purchasing and services under two GSA Schedule contracts -- Schedule 70 (General Purpose Commercial nearly 800,000 awards since Program. Information Technology Fire Rescue 2012 are cooperative purchasing agreements. The increased utilization and availability of these agreements saves time and money for SLED agencies that struggle with tight budgets and modest growth in revenue from taxpayers in recent years. Millions in SLED Spending through GSA s Cooperative Purchasing GSA s Cooperative Purchasing Program provides access to thousands of nationwide, prevetted vendors that offer Equipment, Software and ) and Schedule 84 (Total Solutions for Law Enforcement, Security, Facilities Management, Fire, Rescue, Clothing, Marine Craft and Emergency/Disaster Response). 8

9 QUARTERLY GUEST CONTRIBUTOR COLUMN From 2009 to 2014 SLED essence, a 20-year contract volume. This growth can be agency spending increased (VA contracts are base five year attributed to not only the from almost $600M to nearly $750M for Schedule 70 and from approximately $25M to over $75M for Schedule 84 a very healthy increase considering the economy was in a severe recession during that period. IT vendors should note that almost 50% of Schedule 70 expenditures go towards wireless services. For vendors whose offering is relevant to Schedule 84, the largest spending category is law enforcement and security equipment supplies and services. The Benefits of GSA s Schedule Program In addition to the standard benefits of cooperative purchasing, top program perks of GSA for vendors include: with one five year option to extend). Convenient System for Customers to Request Quotes: State and local government buyers can request quotes electronically from approved GSA Vendors across the full range of products and services offered through the program using the GSA ebuy system. Visibility and Exposure: Vendors with a GSA contract have their approved products and services listed on the public comprehensive online shopping superstore, GSA Advantage! Key Takeaways for State and operational cost savings on the agency side, but also for the potential of greater contracting volume and the procurement efficiencies gained by vendors. Vendors should consider participating in cooperative purchasing - working with a top co-op association or GSA s Cooperative Purchasing Program is an opportunity for vendors to increase exposure to agency buyers, gain the advantage over competitors and grow their government revenue. ABOUT OUR GUEST CONTRIBUTOR: Michelle Hermelee, President of BH Sky Associates, LLC, founded BH Sky Associates in 2006 to provide hand-holding, step-by-step guidance, consulting, information, and training to guide businesses successfully through the government procurement process. Michelle is a NCMA Certified Schedule Contract Manager (CSCM) with over fifteen years of in-depth experience securing and negotiating government contracts. BH Sky is headquartered in Princeton, NJ, with a location in Washington, D.C. BH Sky specializes in GSA contract management including contract modifications and GSA schedule proposal preparation. We also perform government market research on behalf of our clients. Longer Term Contracts: GSA contracts provide stability to vendors because their contract term is for a base five year period with three five year options to extend which is, in Local Government Vendors Cooperative purchasing, though a relatively small segment of the state and local government procurement marketplace, is growing in popularity and Michelle Hermelee President BH Sky Associates 9

10 Onvia specializes in providing business intelligence solutions to vendors to grow their government business, helping them get ahead of the bid and RFP process. Active vendors in the government market that need timely, comprehensive and unique insights in their industry vertical, key buyers and competitive landscape should visit and request a demo to speak with a Business Development Manager in their industry. Onvia helps clients strategically grow their government business with solutions for project intelligence, agency intelligence and vendor intelligence in the public sector. Disclaimer: The information contained in this Onvia publication has been obtained from publicly available federal, state and local and government data sources. These data sources are reviewed and updated periodically to better reflect activity in the public sector. Changes in opportunity volume due to source changes are generally not material enough to affect research findings, but may be material in some instances. Additionally, the number of calendar working days each quarter may differ slightly each year, which can also affect volume. Onvia disclaims all warranties as to the accuracy, completeness or adequacy of such information. The views and opinions expressed in this publication are those of Onvia s research organization or contributors and are subject to change. For More Information (800)