SLED is an acronym used to describe the Business to Government (B2G) market that includes State, Local, and Education projects.
- S for State
- L for Local, and
- ED for Education
How big is the SLED market?
The SLED market represents nearly $2 trillion dollars of annual spend in North America, or approximately 10% of GDP.
In addition to local government funding, federal and state grants (or provincial grants in Canada) can also be allocated to the local municipal governments.
This means the SLED market can represent a massive opportunity for your company to get involved in providing goods and services to the state, local, and education market.
The trick is understanding the SLED procurement landscape and how to find your place in it.
Understanding the SLED market procurement landscape
Here at Ontopical we’ve helped many organizations better understand and serve the SLED market. Our AI-enabled software helps companies stay informed about the investment and planning conversations happening at cities, counties, and local government authorities across the USA and Canada.
Based on our experience serving vendors who sell to the SLED market, here’s an overview of how a typical purchasing decision might get made at a city or town council near you:
Typical steps for SLED market purchases:
1. Become aware of issue or need
Constituents or council members can bring forth needs and issues.
2. Identify the problem
Acknowledge, and agree, that the issue identified needs to be, and can be, addressed.
3. Study solutions
Start researching possible solutions to the problem and high level cost estimates.
4. Develop solution criteria
Create the criteria that would be required for the solution in order to achieve the stated goals.
5. Funding secured
Seek budget approval based on high level cost estimates of project initiative, based on either similar projects in other municipalities, direct recent experience, or estimates provided from relationships with some suppliers.
6. Issue “Request For Proposals”
Based on steps 4 and 5 above, and whether the estimate is above a certain dollar threshold value a formal RFP is required to be issued. The threshold can vary depending on city/state policy.
SLED market RFPs are deadline specific. Interested suppliers must submit their response by a specific date or they won’t be considered. There is a “code of silence” during this period during which bidders are not allowed to contact municipal officials in regards to the RFP.
Sometimes, there are not enough bidders, or any bidders, for a particular RFP. If that happens the city has to re-issue the RFP or solicit vendors to submit their responses.
The city puts in a lot of effort to issue the RFP’s which become publicly published and available. When there’s no response to an RFP, it is frustrating, time consuming, and a waste of money. For this reason boards and councils are motivated to encourage vendors to find out about and respond to their RFPs.
7. Compare products and services
When the bids are submitted, the city will evaluate and compare the RFP responses. In most cases the evaluation is based on a scorecard to try and remove bias. Often times, these are published within the minutes of the meetings, along with information on the proposed pricing.
8. Select and purchase
Once a supplier is selected, the contracting process begins.
9. Sign contract and begin
The implementation of service begins after the agreement has been signed.
10. Receive value
The product or service is received and implemented.
11. Evaluate performance
The solution is evaluated during implementation and post deployment or completion of project. Depending on the initiative, a report may be published with the results of the impact of the implemented solution.
Are RFP’s issued for all SLED projects?
RFP’s are not necessarily issued for all initiatives. There is the opportunity for a government to “sole source” and not go through the tender process.
Typically, certain criteria must be met in order for a city to be able to sole source. It normally depends on the dollar amount of the solution, but it can also depend on whether there are other suppliers that can provide the service or solution, or if it’s only available from the one supplier.
How does this help you sell to the SLED market?
You’ll notice in the description we just went through that the majority of deals are likely to be issued by RFP.
If you’ve ever tried to sell to the SLED market and participated in a government RFP process you’ll know that if the RFP issuance is the first time you find out about the initiative, your chances of winning go way down.
And you’ll also notice that when a city initiative does not need to go to an RFP, it is sole sourced.
What do these scenarios have in common?
The earlier you build meaningful relationships with the buyers, the higher your chances of getting the deal.
How do you establish early relationships in the SLED market?
Relationships are critical for business development efforts. Experience has proven this again and again. At the end of the day, it is still people doing business with people. Establishing a relationship with relevant individuals within government allows for the possibility of being provided information on upcoming projects or initiatives.
Also, it allows for the supplier to help the buyer shape the RFP requirements. If the relationship is well established this can provide an incredible advantage for that supplier.
But before you can do any of that, you need to build a strong brand presence, show up, and establish credibility when you sell to the SLED markets you’re targeting
Of course, relationships are only part of the answer and can only get you so far. The supplier must also have great features, amazing support, reasonable prices, and have a product that fits market needs.
If your solution is not relevant or is too costly compared to competitors (without value justification), then winning bids based on relationships alone is going to be more challenging.
Brand reputation, based on prior work and experience, is very important when it comes to the final decision. But only if what you have to offer is up to par to begin with.
How do I find SLED market opportunities before they become RFPs?
This is simple and difficult.
It’s simple because all it takes is showing up to every council meeting and making conversation about how your firm can help the council solve their problems, reach their goals, and serve their constituents.
It’s difficult because it is incredibly time consuming and not scalable across a broad geographic region, or several thousand cities.
Which is where Ontopical comes in. Using Ontopical is like attending every council meeting across the country with none of the bad coffee.
You set your custom alerts, and Ontopical finds potential SLED deals that you can win up to 12 months before they’re issued as an RFP.
Contact us anytime to see it in action for yourself.