Understanding the Higher Education Government Contracting Market

Posted by Paul Irby Morgan Parkin on July 10, 2020

Higher education university quad with students

GovWin’s state, local and education market research highlights key takeaways, trends and market developments that are relevant to government contractors. This Q&A focuses on the higher education market, and features excerpts of interviews with three experts on purchasing, infrastructure and technology. The full version can be found in GovWin’s most recent State and Local Procurement Snapshot report.

1. Higher Education Purchasing

Nathan Sorenson, Director of Government Contracts, Midwestern Higher Education Compact

GovWin: What are some of the unique aspects of the higher education market that set it apart from other types of government?

Nathan Sorenson: Higher education is uniquely different than other types of government with more than 7,000 institutions nationally, over 19 million enrolled college students and $584 billion in annual spending ($372 billion among public degree granting institutions). It’s important to acknowledge the differences in institution type, size and stakeholder responsibility. There are many different categories that impact purchasing, from 2-year vs. 4-year, to public vs. for-profit vs. private not-for-profit, to religious-affiliated vs. research-oriented vs. intercollegiate sports oriented, among others.

Secondly, these types of institutions range in size, geographic location and complexity, from large public multi-campus state university systems to small private colleges and local community colleges. Needs also vary by institution, remembering that the basic goal of educating students is similar.

And lastly, consideration should be given to the various stakeholders and the spectrum of their responsibilities or delegated authority. When looking through the lens of higher education you not only have to consider administration and staff or governing boards, but also students, tuition-paying parents, alumni who care deeply for their institutions, and in many cases the taxpayers.


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GovWin: What are some of the greatest challenges for higher education officials?

Nathan Sorenson: The higher education community is faced with several challenges including declining student enrollment, aging infrastructure, reduced state funding and managing the ever-increasing demand for technology. For the vendor community, it’s important to know the institution’s priorities as well as who you are selling to in order to provide meaningful solutions to help meet their challenges. Higher education leaders are very collaborative in sharing information in regards to financial management, administration and technology acquisitions. Some businesses may object, wanting details of their IT solutions to remain confidential for competitive reasons. Insight can be found on public listservs and institutional websites, where posts share details on how these officials are addressing their plans to better serve students and fulfill their teaching and learning missions.

“Selling to the higher education community often involves long sales cycles and requires a focus on building relationships over time.”

Nathan Sorenson, Director of Government Contracts, Midwestern Higher Education Compact

2. Higher Education Infrastructure

Quinne Chessman, Senior Associate, Thornton Tomasetti

GovWin: In our previous research on the SLED AEC market, we showed Census construction data showing funding for higher education rose by around 2% per year since 2013. Would you say this increase is large enough to keep up with the needs? 

Quinne Chessman: A 2% average rate of growth is really just keeping up with inflation or “kicking the can down the road”. Due to lack of federal and state funding, the market has suffered from deferred maintenance for many years. There has generally been a lack of adequate investment when compared with the large scope of these unmet needs. We are seeing structures reaching a critical point in their age and institutions realizing that they need to address a wide range of safety and building performance issues. Having said that, my firm has recently seen an uptick in the volume of engineering studies or work requested – around 10% or so higher than the previous year. Completed engineering work doesn’t necessarily translate into more construction spending, but it does suggest that a wider range of choices are being considered. While a coronavirus-led slowdown in the economy will affect budgeting and the timing for any upward change in spending, this is positive and points to a potential shift toward making higher education infrastructure more of a priority, even if it takes a few years to fully materialize.

GovWin: How has the process of budgeting in higher ed affected infrastructure investment?

Quinne Chessman: One of the greatest challenges has been the inability of public higher ed institutions to build a reliable source of infrastructure funding into their budgeting process. It ends up competing with other needs and is simply too easy to defer. In my state, five years went by with considerable budget challenges, and the governor basically told everyone that higher ed institutions do not have any “extra” funding for any purpose. I think many states have seen the error of their ways, with several now re-investing that had historically not been funded over several administrations. This includes Illinois and Wisconsin among others. As the exception, Texas has always had a robust funding mechanism.

“Upgrading facilities does help higher education institutions to recruit students. Universities and colleges that can figure out how to afford to fully maintain and improve their campuses will stand out and be more competitive into the future.”

Quinne Chessman, Senior Associate, Thornton Tomasetti

3. Higher Education Technology

Morgan Parkin, Research Analyst, GovWin from Deltek

GovWin: How would you describe the trend of digital transformation taking place in higher education?

Morgan Parkin: Digital transformation seems to be a hard-fought battle these days. One major issue facing higher education is that by not going digital, institutions run the risk of falling behind the tech curve. If students expect it in their home (or dorms) then they will grow to expect it in the classroom. That expectation can then translate into modern, equipped facilities and administrative work, thus making digital transformation less of a battle and more of a basic requirement. The beauty of digital transformation is that it can be scalable if an institution can start small and grow to adopt more measures. There is a definite possibility of finding efficiencies, which are not just helpful but necessary to maintain a competitive edge in securing future students.

GovWin: What are some of the best areas for growth in higher education IT?

Morgan Parkin: In the world of edtech, frequent discussion topics include accessibility, integration and growth. One proposal would be to shift attention to the needs of the users (students, faculty, staff and prospective students) and keep that in constant focus. Think of every buzzword in edtech: Usability, scalability, interoperability, personalization, efficiency, customizable, etc. With such a diverse group of users, higher ed technology should consider these buzzwords but also fall back to its core, which is fostering growth in learning and development. Educational institutions should not only be concerned with student retention but also teacher retention. Technology can steady a ship and make it run more smoothly but the remaining tech users need to steer the ship to success and growth. Finally, artificial intelligence promises additional benefits in improving the educational process but concerns about security and student privacy must be addressed along the way.

“The future of higher education technology goes back to the fundamentals of learning environments such as communication, instruction and accessibility. Institutions should commit to these and adopt a growth mindset with a learning environment conducive to it.”

Morgan Parkin, Research Analyst, GovWin from Deltek

Looking for more analysis of the higher education market? Download GovWin’s Education Contracting Analysis: Selling to K-12 and Higher Education Markets report to get more insights and perspectives that can help organizations win more business.

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