Onvia Report Finds 3.2% Decline in Government Contracting Opportunities, Impacted by Growth in Cooperative Purchasing
SEATTLE, Nov. 18, 2014 /PRNewswire/ -- Onvia (NASDAQ: ONVI), the leading provider of "Intelligence for Winning More Government Business," today announced the availability of the Onvia State & Local Procurement Snapshot for Q3 2014. The report analyzes state and local government contracting activity across the nation and follows Onvia's complimentary Q1 2014 and Q2 2014 market analysis reports published earlier this year.
The Q3 2014 analysis finds a 3.2% decline in opportunity volume versus the same quarter in the prior year (Q3 2014 vs. Q3 2013). Opportunity volume represents the number of state, local and education bids and RFPs submitted for open bidding by government agencies. This quarter's decline in volume indicates a slowing trend in growth rates seen over the most recent two quarters where Q1 2014 saw 5.2% growth in opportunities, Q2 2014 saw 2.2% growth and Q3 2014 saw a 3.2% decline versus the prior year. Year to date in 2014, government contracting opportunity volume at the state and local level is up 1.5% versus the same period in 2013.
Important to note is that a decrease in opportunity volume does not indicate a decrease in state and local government spending. According to Paul Irby, Market Research Analyst at Onvia, "Bids and RFPs historically represented one agency buying from one or more vendors. What we're seeing happen much more often now is one agency awarding a contract to a vendor, then several agencies purchasing off of that single contract for future purchases." Irby goes on to explain, "we analyzed procurement activity of a sample of cooperative purchasing agencies across the country and saw a 16% increase in their procurement volume over the prior year; many of these contracts will be purchased off of many times, resulting in a decrease in opportunity volume even if spending is equal to or higher than last year."
Onvia's Q3 2014 State and Local Procurement Snapshot also analyzed several other trends in state, local and education agency procurement for the period including:
- Cautious spending by state & local governments to refill "rainy day funds" is likely impacting infrastructure-related procurement, especially new construction projects. Spending is expected to rebound in 2015 based on healthy forecasts for tax revenues and bond-funded investments as cited by recent Bloomberg and Moody's reports.
- A noted decline in telecom contract volume versus Q3 2013, which could be related to both the ongoing migration to VoIP services and the shift from agency-provided wireless devices to government agency BYOD adoption.
- A 10.5% decline in opportunity volume among education agencies. Education is one of the sectors most strongly impacted by cooperative purchasing initiatives as districts aim to pool purchasing activity in an effort to negotiate better pricing and increase procurement efficiency.
With an increase in cooperative purchasing activity resulting in fewer contracts of greater potential value and higher state and local tax revenues expected to increase overall government spending in 2015, competition among government vendors is also on the rise. Government marketing expert Mark Amtower contributed to Onvia's Q3 2014 report, adding government marketing tips and tactics for contractors to win more business in 2015 with an emphasis on content marketing, social networking, sales channel development, customer research and web site landing pages focused on the needs of government agencies.
Readers can download the full report for free from Onvia's website at:
http://www.onvia.com/business-resources/white-papers/SLED-procurement-snapshot-q3-2014
About Onvia
For more than 14 years Onvia (NASDAQ: ONVI) has been delivering the data and tools companies rely on to succeed in the government contracting market. Onvia tracks and reports the spending of tens of thousands of federal, state and local government agencies, giving companies a single source for conducting business with government. For information about Onvia, visit http://www.onvia.com/.
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