4 Tips for Winning Government Contracts with State and Local Governments
With over 100,000 unique governmental entities purchasing goods and services valued at nearly $1.5 trillion annually, the U.S. state, local and education (SLED) government market represents nearly 10% of the United States’ GDP! The SLED market is one that can become an extremely lucrative and reliable revenue stream for your business, especially if you take the time to learn how to navigate its many nuances.
In this blog we provide a guide with four tips for winning business with state and local government entities.
Guide to Winning SLED Government Contracts
1. Understand the Levels of SLED Government
In order to start (and scale) in the U.S. SLED government market, it is important to understand what it comprises. These are the government entity types, or ‘levels’ of SLED government, that are most commonly considered to be part of the SLED market:
- State Governments: State government contract opportunities are often focused on major information technology infrastructure efforts and civil infrastructure projects like roads, highway and water. State governments can also focus on operating police and fire services, establishing zoning regulations, licensing professions and arranging elections.
- Municipal Governments: Municipal governments oversee the operation and functions of cities, towns, townships, villages and boroughs.
- Counties: County governments typically operate under provisions set out by the state constitution and perform essential administrative functions such as voter registrations, record keeping, law enforcement and administering health and welfare services.
- Special Districts: Special districts are limited-purpose local governmental entities that operate independently from city, town or county governments. Common services that special districts commonly provide include: Power generation/electricity, fire protection, flood control, healthcare services, housing services, parks and recreation, libraries, water-sewer services and even entertainment venues and services.
- Independent School Districts: Independent school districts are a common type of education-oriented governmental entity that often focus on providing primary and secondary education while operating independently from any municipality, county or state. There are school districts that operate as part of municipal governments that would not be considered an independent school district.
- Public Colleges and Universities: Public colleges and universities are focused on providing higher education services and typical receive the majority their funding through state ownership or public funds.
As companies who are experienced in SLED contracting know, state and local government buyers are looking to do business with organizations that provide a wide range of goods and services. But with that said, if your company provides niche solutions, it is still worth looking at the SLED market to understand potential opportunities that may exist to do business with the government.
“Buyers in the SLED market are looking to provide nearly every good and service imaginable. Even if your company provides a niche offering, it is still worth taking time to understand the opportunity that selling to SLED might offer to your business.”
Chris Dixon, Sr. Research Manager, SLED Market Analysis, Deltek
2. Learn What SLED Governments are Buying
So, where can a company start to gain an understanding if SLED government might be buying what they have to offer?
Like in any market, it is important to first do your do your due diligence if there are buyers looking for your products, services and solutions that map to the capabilities your company has to offer. Luckily, SLED governments are in the market for almost all imaginable goods and services that you can think of! The list below gives high-level descriptions of common industry segments where SLED government buyers are procuring goods and services on a regular basis:
- Architecture & Engineering (A&E): Includes A&E related work such as project design, planning, inspection and surveying.
- Construction: Includes construction related work such as the construction, expansion, replacement, or enhancement of roads, buildings, structures or landscaping
- Educational Products & Services: Includes products and services intended specifically for educational market such as textbooks, education software and education consulting services
- Environmental Services: Includes testing and measurement services such as environmental consulting, environmental testing, wildlife/stream/soil assessments, scientific research and GIS mapping
- Financial Services & Insurance: Includes products and services related to banking, investments, retirement, insurance, payroll, billing, accounting or auditing
- Healthcare: Includes healthcare services, supplies and equipment, as well as mental health and social services
- Operations & Maintenance: Includes a broad range of operational services that are typically purchased as multi-year renewable contracts such as cleaning, waste, infrastructure and grounds maintenance, uniforms, food and facility supply orders
- Professional Business Services: Includes services and consulting in areas such as administrative, employment, economic, legal, professional, business and printing/publishing
- Public Safety: Includes products and services specific to police, fire, emergency, security, corrections or military uses
- Technology & Telecom: Includes a broad range of technology and telecommunications products and services such as hardware, software, wireless, cloud or IT consulting
- Transportation: Includes vehicle purchases and equipment, as well as transportation services such as intelligent transportation systems equipment and consulting
- Water & Energy: Includes construction or expansion of water or energy infrastructure, as well as consulting, equipment and supplies.
Wondering if the Government is Buying What You Provide?
3. Take Steps to Start Selling to SLED Governments
Selling to state, local and educational government agencies can be a challenging task if you don’t how to source best-fit opportunities with the market or how to best position your capabilities or offerings to those buyers. Before your business thinks about responding to a bid or request for proposal (RFP) from a SLED government agency, it is imperative to set your organization up for success. To do this, consider these steps:
Step 1: Register to do Business with SLED Governments
The SLED market so vast and fragmented that it can be easy to get overwhelmed and lose focus. Your best defense is a good offense, which includes a business development strategy that is tailored and focused.
A key step as you start (and scale) your SLED sales pursuits, is to first determine which agencies and territories are best fits for what your business offers. Then, find those agencies online. In order to do be eligible to do business with your target agencies you must first register with them on their respective procurement portals and entering/maintaining those registrations often differs from agency to agency. Using leading market intelligence tools like GovWin IQ to identify best-fit agencies for your business will help keep your approach tailored and will help you manage your vendor registrations with each of these agencies. Avoiding a ‘spray and pray’ approach is key managing your time effective as you get started and begin to scale your growth in the SLED market.
Step 2: Know Your Target Government Agency’s Buying and Payment Cycle
Once you have defined your target government agencies to do business with, you need to understand how and when they spend. Unlike the federal government, SLED agencies set their own fiscal year schedules and their spending patterns often align with their state’s fiscal year start and end dates. It’s important to understand your target agencies’ fiscal year and spending patterns to pinpoint the best time of year to go after new government contracting opportunities.
Additionally, while SLED government agencies are reliable clients, it can occasionally take time to receive payment from them after the work is completed – sometimes up to 30 to 45 days after completion. Make sure you figure this longer payment cycle into your budget planning and forecast model.
Step 3: Articulate and Market Your Value Proposition
Once you’ve determined which agencies to target and understand their buying and payment cycles, it’s time to look internally to your business strategy. This starts by understanding your value proposition to best position your offering and market your capabilities. Ask yourself:
- What does my company do?
- How can we help solve an agency’s unique problems?
- What’s unique about our product or service – how does it separate us from the competition?
- What is the unique value that our offering brings to the table that our competition’s offerings do not?
When articulating your value proposition it is also important to explain how your customers have benefitted from your product or service in the past. You’ll want to be able to provide relevant examples of past government or private sector customers when responding to any competitive bidding opportunity.
Once you know the answers to these questions you will be well positioned to respond to RFPs and increase your win rate.
4. Know the Tools and Services to Help You Stay Competitive
There are a variety of tools and services available to help firms establish their SLED sales channel. These range from providers that help to manager vendor registrations, databases that can help to identify new and upcoming best-fit opportunities and networks that help firms connect with industry analysts and source teaming partners.
As you grow your SLED practice you will what to look for solutions and services that are capable in assisting you in key areas such as:
- Managing SLED Vendor Registrations
Unlike the federal contracting world where there is only one vendor registration portal, the SLED market has thousands. As you consider expanding your SLED business footprint from local to regional (or potentially even national) in scale, the level of effort and time it will take to operationalize, manage and maintain all of the necessary registrations will increase exponentially. To help with this, look for a service provider that has the people and features in place to grow along with you.
- Identifying Best-Fit Opportunities, Before the Bid Hits the Street
Competitive and growth-minded business development executives never want to find out that they missed out on a good-fit opportunity for their organization. Missing out on a single competitive bid notification can be a costly mistake that will create a dent in your pipeline and growth potential. The most successful SLED government contractors know that early opportunity identification is key to gaining a competitive advantage. By ensuring that they have access to the information (and the resources in place to operationalize it) these companies are able to understand which agencies are sending buying signals for goods and services that match their capabilities, before a competitive bid or RFP hits the street. By harnessing this powerful buying intent data, strategic business development executives are able to gain a competitive edge by establishing meaningful relationships with decision makers and influencers at their target agency before the competition is even aware of the bid.
- Establishing Connections and Networking Opportunities with Potential Teaming Partners
Whether you’re looking to be a prime or a subcontractor, you will want to find a provider that can help you quickly identify good-fit teaming partners when you need them. Industry events have long provided an avenue to connect with teaming partners, but with an increasingly virtual government contracting business environment, and costs that can be prohibitive for smaller companies, in-person events do not allow for the ease-of-access and scale that virtual teaming network can provide. Look for solutions that can offer you access to a network of potential teaming partners and virtual teaming events, especially ones that are focused on specific contract vehicles.
- Leveraging Extensions of Your Team
It’s worth taking the time to look for solutions and services that can offer you a dedicated customer success manager who can act as an extension of your team. There are many small ‘bid-scrapers’ in the market, but most do not have the ability to address your unique questions and needs in a swift and responsive manner. Be wary of these providers as they could leave you hanging out to dry when you need a fast response or assistance with tasks such as performing an opportunity search, getting in touch with a contracting officer or retrieving an update on an upcoming or current bid.
- Learning From Experienced Industry Experts
Last, but certainly not least, is looking for government contracting market intelligence for experts with proven experience in the field. Providers that have contracting expertise and institutional knowledge built into their solutions are worth their weight in gold. Having access to industry experts and research analysts will help take your business to a whole new level of competitive advantage. Look to work with solutions providers that give you both access to information and their own market experts. Consider repeatable providers for their expertise doing business with the government and who have research analysts on staff to address nuanced questions and the unique needs of your business.
Ready to start establishing a state, local and education (SLED) government sales channel for your company? Download your copy of GovWin’s free guide, SLED Government Contracting 101, to get your business on its way to state and local sales success.
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