If You Want to be Successful in SLED, the Right Contracts Are a Must

By Rachel Eckert, SLED Manager

State and local governments buy a wide variety of goods and services – from food stuffs and linens to police radios and technology. They also buy large volumes of goods and services, which could present a financial risk if they’re not purchased from a reputable source at a fair price. That’s why competitively bid contracts are essential to both government and vendors.

Government Benefits From Competitively Bid Contracts

To guarantee that the state or local government is getting the best value and a fair price, state and local governments leverage a competitive process to determine the vendor(s) who best meet this criteria. This competitive process results in one or more awarded contracts that specify what the government may purchase, from whom they can purchase and a guaranteed maximum price. This reduces the overall risk for the government – something extremely important to ensure their continued ability to serve their citizens.

Vendors Also Win With Competitively Bid Contracts

The benefits for government might seem to outweigh the benefits to vendors. However, this competitive contracting process has benefits for vendors as well. The contracts also lower the financial and legal risks to the vendors through the contract negotiation process that clearly outlines the terms and conditions for engaging with the state or local government.

For technology contracts, they clearly specify the types of technology or services that are available and through whom they may be acquired. In many cases, they allow for the use of pre-identified partners in addition to the contract holder. So, for vendors, these state and local contracts clearly identify their routes to market and can set their sales in motion.

Honing Your Contract Strategy

Understanding the state and local contract ecosystem and determining which contracts to target takes the assistance of market research and development of a focused channel partner strategy. Here are three ways you can start:

1. Understand your government target customer’s buying options and/or preferences. With such a large number of government entities, you can be sure that there many different ways in which government would prefer to acquire their goods and services. Researching the government customer’s historical purchases and procurement guidelines will give a good understanding of what contract option they would like to employ.
2. Investigate the contract options. After the preferred contract option(s) have been identified, the next step is understanding how the contract(s) operate. What vendor(s) are on the contract, what types of products can be sold and what are the terms and conditions?
3. Leverage your channel partners. This last piece can be the most critical. Make sure you are leveraging your existing channel of distribution and/or resellers to connect with the partner(s) who are on the contract you’re looking to use.

Contracts should be an important piece of your SLED growth strategy. Vendors need to ensure they have a means for potential customers to easily acquire their products and services before they expend sales cycles, only to discover they are not on the right contract.

immixGroup is intensely focused on providing our vendors and channel partners contract vehicles that target state, local and education customers in all 50 states. If you would like help understanding the contract landscape and finding the right contracts, reach out to the immixGroup Market Intelligence team.

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