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RouteFifty: SLED market on pace for modest procurement growth in 2016 thanks to smart cities

Government state, local and education contracting opportunities rose 4.6 percent in the fourth quarter of 2015, hinting at 2016 being a modest growth year, according to a new Onvia report.

SLED IT spending saw the most improvement last year, 11.3 percent, while a 4 percent increase in infrastructure spending may signal further investment to meet growing capital demands, according to the Seattle-based business intelligence company.

The “State & Local Procurement Snapshot: Q4 2015” report from Seattle-based Onvia cautions unbalanced state budgets, declining tax revenues in some oil-producing states and the lingering effects of the last recession could limit procurement, but the smart cities movement should more than make up for such problems.

“Growing cities need infrastructure and services,” Smart Cities Council Chairman Jesse Berst told Onvia. “If you need to support growth, it makes sense to implement smart solutions.”

Onvia projects 1 to 2 percent growth in government bids and requests for proposal in 2016, with jurisdictions facing the challenges of what technology to select, how to pay, whether to partner, and how to ensure security and privacy.

Public-private partnerships offer an alternative to municipal bonds, Berst said.

“Vendors should pursue partnerships with the global firms, who eagerly seek innovative companies and local/regional installation partners,” he said. “The Smart Cities Council has become a hotbed of collaboration between companies all over the world.”

Read the full report here.