Celebrating National Purchasing Month: 2011 procurement review
Deltek has been tracking and working to improve state and local government purchasing for more than 10 years. To celebrate National Purchasing Month, we have provided analysis of different procurement strategies, expenditure reviews (and another), and now we take a look at 2011’s nationwide state and local government procurement numbers to identify regional and government-level trends.
A lot of effort in state and local procurement these days is put toward identifying commonalities between purchasing entities to find efficiencies through shared services, cooperative purchasing, and consistent procurement codes. When considering there are more than 80,000 state and local government units that historically did their own thing, this is a welcomed and necessary endeavor to assist governments in procurement streamlining and consolidation. Despite the similarities of our state and local governments, it is a big country out there, and when reviewing 2011 procurements, it is beneficial to look at the different components that make up this huge market.
Figure 1: NASPO state regions
As seen in Figure 1, the National Association of State Procurement Officials (NASPO) organizes the United States into four regions for its members, which we borrowed for this analysis. Total procurements by count in 2011 between these regions were split with 34.95 percent from the Southern region, 24.68 percent from the East, 22.06 percent from the West, and 18.31 percent from the Midwest. This breakout makes sense when you compare the percentages to Deltek’s FY 2011 state expenditure data, in which the Southern region represents more than $525.4 billion in state budgets, the East more than $428.5 billion, the West more than $427.5 billion, and more than $348.6 billion from Midwestern states.
Figure 2: All-Funds state budgets and percentage of total bids by NASPO region
If we abandon the regional focus and instead look at all governments within each state, we find that Texas governments released the most bids, with 9.53 percent of 2011 activity. California governments were a close second with 9.17 percent, and New York governments round the top three with 7.34 percent.
Figure 3: Bid distribution by government type
It is also interesting to note that state-level purchasers released 30.49 percent of 2011 bids, while cities released 29.03 percent, counties 16.67 percent, public universities 11.76 percent, and 6.27 percent from independent school districts. These numbers help drive home that the distribution of government purchasing and spending goes far beyond the states. Vendors interested in state and local business need to remember to pay attention to the locals as sources for business. Oftentimes, there is less competition from other vendors fixated only on big statewide budgets. When analyzing the types of purchases that state and local governments made in 2011, it was not surprising that Architecture, Engineering, and Construction led the way with 26.36% of 2011 procurements. Professional Services (15.98%) and Information Technology (11.61%) came in second and third respectively. Vendors providing these types of goods and services should continue to see growth in the number of procurements coming out for bid in 2012.
Last year was challenging for state and local purchasing as return on investment and transparency expectations grew and, in many cases, purchasing staff decreased. This year will be no different as governments continue to ascend from the depths of recession and budget shortfalls. The show must go on though, which is evidenced in the more than 200,000 competitive procurements reviewed in this microanalysis. As it has for the past decade, Deltek will continue to observe and share key trends and drivers in state and local purchasing. Look for free monthly reviews of state and local bid activity in the Deltek B2G Breaking Views blog and, of course, find early insights in the GovWinIQ suite of products.
Find more analysis of this data on Deltek's free report: S&L 2011 Bid Opportunity Data Visualizations
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