State and local government contracting — the SLED market — spans over 100,000 government entities and accounts for nearly $1.5 trillion in annual spending, equivalent to roughly 10% of U.S. GDP. This guide explains how the market is structured, how contracts are awarded, and what it takes to win business with state, county, municipal, and education agencies.
Why it matters: SLED contracts are large and recurring, but winning them requires understanding how buying cycles, procurement vehicles, and agency relationships differ across thousands of distinct government entities.
Key Takeaways
- The SLED market represents significant contract volume: Over 100,000 government entities buy goods and services worth nearly $1.5 trillion annually — nearly 10% of U.S. GDP.
- Fiscal year timing shapes your win strategy: 92% of states end their fiscal year in June, making budget cycles a critical factor in when and how to pursue opportunities.
- Market intelligence tools accelerate contract wins: Platforms like GovWin IQ help contractors track planned and expiring contracts early, giving them time to build relationships and shape bids before solicitation.
What is a State and Local Government Contractor?
State and local governments in the U.S. are incredibly varied and have a wide variety of needs. They rely heavily on private companies to fulfill many of their operational goals, including building mass transit, providing public safety, and performing environmental studies.
A state and local government contractor will work with one or more state governments to offer their products or services to better serve the citizens of those states.
The Basics of State and Local Government Contracting
With over 100,000 unique government entities purchasing goods and services valued at nearly $1.5 trillion annually, the state, local, and education (SLED) government market represents nearly 10% of the United States’ GDP.
But this market is widely varied and made up of a number of different types of government agencies, including:
- State Governments: State governments generally have large budgets and often issue high-dollar state contract opportunities that companies serious about SLED business won't want to miss.
- Municipal Governments: Municipal governments oversee the operation and functions of cities, towns, townships, villages, and boroughs.
- Counties: County governments typically serve a larger geographical area than cities and towns, but are generally smaller than states.
- Special Districts: Special districts are limited-purpose local governmental entities that operate independently from city, town, or county governments, providing services such as (but not limited to) flood control, healthcare services, or parks and recreation.
- Independent School Districts: These are a common type of school district that typically focus on primary and secondary education and operate independently from any municipality, county, or state.
- Public Colleges and Universities: These institutions focus on providing higher education services and typically receive the majority of their funding from state ownership or public funds.
Free Guide
State & Local Contracting 101
The SLED contracting market is full of opportunity. Discover how your business can succeed in selling to SLED government agencies across the country.
Types of State and Local Government Contracts
The most common type of state and local government contract is an invitation to bid, RFP or RFQ. These are similar but slightly different types of government contract opportunities, which can often be differentiated as follows:
- A request for bid is generally intended to find a vendor for services at the lowest price.
- A request for proposal (RFP) evaluates the merits of competing vendors.
- A request for quotation (RFQ) asks for the cost of meeting a specific need.
Before the bid, RFP, or RFQ is released, contractors can get a sense of where state and local contracts will be released by tracking planned contracts to begin building their pursuit strategy in advance.
Having this extra lead time can often make it easier to understand the opportunity in its entirety, assemble a project team, and decide whether to bid on a contract. They can also track expiring fixed-term contracts to understand where they have a good chance of unseating the incumbent supplier.
How to Get State Contracts
State government contract opportunities are part of the broader state, local, and education, or 'SLED', government contracting market.
State government contracts are often large projects focused on major information technology infrastructure efforts and on civil engineering and infrastructure projects such as roads, highways, and water systems. State governments can also be involved in critical efforts such as operating police and fire services, establishing zoning regulations, licensing professions, and arranging elections.
A winning sales strategy for companies pursuing state government contracts is to tailor your approach with an intimate understanding of the buying cycle of the state government agency clients you're targeting.
For example, did you know that 46 of 50 states (92%) end their fiscal year at the end of June?
Only four state governments end their fiscal year in months other than June: the State of New York ends its fiscal year in March, the State of Texas ends its fiscal year in August, and the states of Michigan and Alabama both end their fiscal year in September.
Furthermore, the U.S. federal government ends its fiscal year in September. These nuances can be important to understand about your government agency customers when designing a winning government contract sales strategy. Knowing when to proactively seek out opportunities that align with your company's core competencies is also important.
How to Get Local Contracts
Local and municipal governments in the United States, such as cities, counties, townships, special purpose districts, and publicly funded K-12 and higher education institutions, are also part of the broader state and local contracting market, often referred to as the ‘SLED’ market.
These governments are often focused on serving their citizens and operational needs. Examples of local government contracts include the performance of essential administrative functions, such as voter registration, recordkeeping, law enforcement, and administering health and welfare services, or the provision of goods and services necessary to keep their agency running at full speed.
A winning strategy to get your foot in the door on local contracts is to develop a relationship with the key decision-maker at your target agency well in advance to influence the eventual bid, RFP, or RFQ opportunity.
How Does Deltek Help State and Local Government Contractors?
Deltek has been providing state and local government contractors with solutions that support their business endeavors for over 30 years. With GovWin IQ, a business development market intelligence solution, and Costpoint, an ERP solution for government contractors, Deltek helps businesses find, win, and deliver on more U.S. state and local government contracts.
