State & local contractors expect growth in 2015

Federal contracting makes the headlines every day, but the state and local market is just as dynamic and holds just as much promise for the companies involved in it.

A new report from Onvia — Government Contractors Survey Results: Selling into the B2G Market—highlights how state, local and education contractors fared in 2014, and aims to help companies make more objective decisions moving forward.

2014 saw mixed results for companies, the report said. Forty-seven percent of respondents reported higher growth than in other years, but 34 percent said growth was flat, and 19 percent reported they saw lower growth when compared to other years.

Most companies are optimistic when it comes to 2015, however. A majority of respondents—69 percent—believe they will enjoy higher growth in 2015, with only 22 percent expecting growth to be about the same as other years, and just 9 percent expecting less growth, the report found.

As for why companies are optimistic for growth in 2015, respondents cited several reasons:

• Improving economy and tax revenues
• More spending in the company’s area of expertise
• Higher spending in general by government agencies
• The company is expanding its marketing/sales efforts

Regarding expansion of sales and marketing processes, Onvia recommended that companies focus in this area, especially smaller companies, despite only 37 percent of respondents saying that their sales and marketing budgets would have a positive impact on 2015.

Although larger companies might have more money to allocate to these functions, the report said, smaller companies should be aware of the benefits that increased marketing and sales budgets can bring them because the market of today is characterized by some firms investing in these functions to gain market share.

The report also recommended that companies diversify into additional levels of state and local government because not all bids or RFPs from one customer will apply to a given contractor. It is best to cast the net wide, the report said.

Onvia also recommended participation in cooperative purchasing, particularly for smaller firms, since the current market’s competition level requires each company to be diversified, and since smaller firms, through cooperative purchasing, can have a chance at increasing volume and also decreasing marketing costs at the same time.

The full report can be viewed here.