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Four Major Themes in State and Local Government Contracting Hotspots for 2021

Submitted by Connie Heath on May 5, 2021

Four Major Themes in State and Local Government Contracting Hotspots for 2021

As our team at GovWin from Deltek was preparing our annual hotspots report on the state & local government market, we sifted through thousands of industry sectors and identified 10 products or services that are experiencing much faster growth in usage or adoption by SLED governments - based on factors like new technologies, new standards and the ongoing coronavirus pandemic.

Among those hotspots we identified four key themes that relate to how states, cities and other local government agencies are interacting with government contractors.

Fighting the Coronavirus

The coronavirus pandemic led to rapid growth in bids and RFPs in several key areas representing the ‘front lines’ of the COVID-19 battle. This includes our hotspots for decontaminating government facilities, stocking up on personal protective equipment (PPE) and buying more medical equipment to support healthcare during this difficult period. Suppliers and vendors specializing in these important categories saw demand skyrocket for items and services that were desperately in need and often difficult to procure on a timely basis. 

Adjusting to Virus Impacts 

One step removed from the front lines of the pandemic are three hotspots that have to do with making operational adjustments based on the new environment of the pandemic. This includes the hotspot of streamlining procurement, or making tactical changes in how things are purchased at a time of fiscal stress, furloughs and shortages. Expanding online learning including laptops for students is another hotspot that experienced strong growth as school and college facilities closed. Finally, the hotspot for measuring climate and weather reflects demand for more equipment and services to compensate for the loss of government staff to monitor these indicators due to the furloughs. 

Optimizing Using Technology 

Technology solutions that help government solve problems or optimize services are always helpful and important but not always protected in a downturn. Despite an unusually slow year due to the pandemic, we found three specific technology hotspots that saw growth likely to continue in the near future. They were prioritized higher by SLED officials because of the urgency of the needs during the pandemic and/or the unique opportunity they represented to make positive improvements. 

• Accelerating business technology includes several types of business process and productivity software that help maximize the performance of home-based government staff. 

• Managing mobile devices includes software and services that help manage, maintain and protect these devices, as well as issuing new tablet computers for government staff. 

• Improving the construction process refers to software platforms that automate and streamline permitting and the management of construction projects. 

Outsourcing for Efficiency & Scale 

In recent years, our research team has noted a willingness among SLED governments to try to gain more efficiencies through outsourcing wherever possible. During the pandemic, the ongoing desire for efficient operations and lower costs in healthcare was joined with an urgent need to scale up the amount of testing for COVID-19. This was a critical area that in-house labs at public hospitals and clinics were simply not equipped to handle.

While there is still a certain amount of uncertainty in the market, the above four themes are strongly present in our 10 Hotspots for 2021 research, and are likely to make a significant impact in the types of bids and RFPs that become available for state and local government contractors as the year unfolds. 

Paul Irby is a principal research analyst for GovWin from Deltek. Follow them on Twitter and LinkedIn to stay up to date with the latest government market insights.