Pivoting from Federal to SLED Contracts: A Strategic Guide for Contractors
Put thoughts into action. Through consultation with various partner and SMEs across market, this enhanced playbook provides a comprehensive strategic framework for successfully transitioning to and competing in SLED markets. Includes several templates to support your business development effort through strategic guidance.
Understanding the SLED Opportunity
In today's evolving government contracting landscape, many contractors are looking to diversify beyond federal contracts by tapping into the SLED (State, Local, and Education) market. This pivot represents a tremendous opportunity, as SLED procurement spending is approximately three times the amount the federal government spends – nearly $1.5 trillion annually.
Unlike federal contracts, SLED contracting is highly decentralized, with each state, municipality, or educational institution potentially having its own procurement rules and procedures. While this decentralization presents challenges, it also offers distinct advantages, especially for contractors with federal experience looking to expand their portfolio.
Why Pivot to SLED Contracts?
Market Size and Diversity
The SLED market comprises more than 100,000 purchasing entities across different government agencies, representing nearly 10% of the United States GDP. These contracts cover a wide range of needs, from infrastructure projects and IT services to educational supplies and healthcare services.
Reduced Competition
Compared to federal contracts, SLED contracts often have less competition. This is particularly true for contracts issued by smaller municipalities or specialized educational institutions. For federal contractors used to intense competition, this can represent a welcome change.
Diversification of Revenue Streams
Engaging in SLED procurement offers the benefit of diversified revenue streams, allowing your business to become less reliant on federal contracts alone, reducing financial risk and creating additional profitable channels.
Navigating Key SLED Procurement Vehicles
Before diving into the transition strategies, it's essential to understand two critical procurement vehicles that can dramatically streamline your entry into SLED markets: national cooperative contracts and state Master Service Agreements (MSAs).
National Cooperative Contracts
National cooperative contracts are powerful tools for contractors seeking to expand into SLED markets. These contracts are competitively solicited by lead agencies and made available to participating government entities across multiple jurisdictions. Major cooperatives include:
OMNIA Partners: One of the largest cooperative purchasing organizations for state and local governments that delivers competitively solicited contracts focused on efficiency, compliance, and value.
NASPO ValuePoint: Facilitated by the National Association of State Procurement Officials, this cooperative uses a lead-state model to aggregate the demand of all 50 states and their political subdivisions.
Sourcewell: A cooperative purchasing program that serves government, education, and nonprofit organizations by managing solicitation requirements and offering a network of awarded contracts.
The benefits of utilizing these cooperative contracts include:
Immediate access to SLED customers without going through individual competitive bidding processes
Increased visibility across multiple jurisdictions
Streamlined administrative processes
Built-in compliance with procurement regulations
State Master Service Agreements (MSAs)
State MSAs establish pre-qualified vendor lists for specific categories of goods and services. These agreements are competitively bid by state procurement departments and available to agencies that expend public funds, simplifying the purchasing process for end users.
Key characteristics of state MSAs include:
They establish the fundamental terms and conditions that govern future transactions
They eliminate the need for full competitive bidding for each project
They often allow for statements of work (SOWs) to be issued under the master agreement
They can be used by multiple agencies within a state
Contractors with federal experience should actively identify and pursue opportunities to get listed on these MSAs, as they provide a streamlined path to doing business with state agencies.
Leveraging Existing Functions for a Successful Transition
Repurposing Federal Capture Planning
Both federal and SLED contracts require a well-planned approach that involves identifying potential opportunities early on and developing strategies for capturing them successfully. Capture planning, bid, and proposal fundamentals are critical to winning both federal and SLED contracts.
Your existing capture teams can adapt their processes for SLED opportunities by:
Researching state and local procurement websites
Identifying decision-makers at the SLED level
Adapting federal proposal templates for SLED RFPs
Focusing on local impact and community benefits
Building on Past Performance
Understanding how these two markets overlap or intersect with each other can be a winning strategy. By capitalizing on existing knowledge and expertise in one market – whether it's through established relationships or past performance successes – businesses can build upon this foundation to establish themselves within a new target market.
Federal contractors can effectively showcase their past performance by:
Highlighting relevant federal projects that demonstrate capabilities applicable to SLED needs
Emphasizing quality metrics and on-time delivery statistics
Adapting case studies to focus on outcomes relevant to state and local concerns
Demonstrating understanding of local challenges and regulations
Adapting to Different Fiscal Cycles
Unlike the federal government, SLED agencies operate on their own business schedules, often aligning their budgeting and purchasing activities with their respective state's fiscal year. Federal contractors need to:
Research and map out the fiscal years of target SLED entities
Create a calendar of key procurement dates for different states and localities
Plan sales and proposal activities accordingly
Adjust resource allocation to accommodate multiple procurement cycles
Navigating Diverse Requirements
Unlike federal contracts, the broad universe of SLED government contracting represents many different levels of government (states, cities, counties, education agencies and special districts) representing approximately 30,000 unique government buying agencies.
To navigate this complexity, contractors should:
Invest in market intelligence tools specific to SLED opportunities
Create dedicated teams focused on specific states or regions
Develop knowledge repositories for different procurement regulations
Build relationships with procurement officials at various SLED levels
Practical Steps for Making the Pivot
1. Start Local
Begin your SLED contracting journey by focusing on opportunities in your immediate geographic area. This allows you to build relationships face-to-face and understand local procurement processes firsthand.
2. Leverage Existing Certifications
Many certifications valuable in federal contracting (such as small business, veteran-owned, or minority-owned designations) can also provide advantages in SLED procurement. Many SLED entities actively seek to engage minority and women-owned businesses, providing them unique opportunities to participate in public procurement.
3. Partner Strategically
Many established entities within this sector have well-established relationships with various state, local, and educational institutions. By partnering or subcontracting, businesses can leverage these connections to secure contracts and establish a foothold in the market.
4. Adapt Your Messaging
SLED entities are often more focused on local impact and community benefits than federal agencies. Adjust your value proposition to emphasize:
Local economic impact
Community engagement
Understanding of state/local challenges
Ability to meet specific regional needs
5. Invest in SLED-Specific Resources
When writing your capability statement, highlight how your qualifications, past performance, and portfolio align with what the contract demands. Keep it concise and engaging to maximize your odds of success.
6. Target Cooperative Contracts and MSAs
One of the most efficient ways to expand into SLED markets is to target national cooperative contracts and state MSAs:
Research and identify relevant cooperatives: Determine which national cooperative purchasing organizations (OMNIA, NASPO, Sourcewell) offer contracts in your area of expertise.
Understand the application process: Each cooperative has its own process for becoming an approved vendor. Research and prepare for these opportunities well in advance of solicitations.
Pursue state MSA opportunities: Monitor state procurement websites for opportunities to get listed on Master Service Agreements that pre-qualify vendors for state agencies.
Adapt your marketing materials: Create specific marketing collateral that highlights your cooperative contract numbers and MSA qualifications to make it easy for SLED customers to purchase from you.
Maximizing Success with Cooperative Contracts and MSAs
Contractors already engaged in federal procurement have a significant advantage when leveraging these vehicles:
Federal past performance is valuable: Your federal contract history can be highlighted when applying for cooperatives or state MSAs as evidence of your capability to handle government work.
Established compliance systems transfer: Your existing systems for contract compliance, reporting, and management can be adapted to meet SLED requirements.
Built-in scalability: National cooperative contracts allow you to expand across multiple states without navigating individual procurement processes in each jurisdiction.
Reduced competition: Getting listed on cooperatives or MSAs puts you in a select group of pre-qualified vendors, facing less competition than in open market solicitations.
These procurement vehicles offer the fastest path to establishing a foothold in SLED markets while leveraging your existing federal contracting infrastructure.
Conclusion
Pivoting from federal to SLED contracts represents a significant opportunity for DOGE contractors seeking to diversify their government business. By leveraging existing capabilities, accessing cooperative contracts and state MSAs, and understanding the unique needs of state, local, and education entities, contractors can successfully expand into this lucrative market.
The transition requires patience and persistence, but the reward is a more diversified and resilient business that can thrive across multiple government sectors. Start small, learn continuously, and build systematically to create a strong SLED contracting presence alongside your federal business.
This blog post is for informational purposes only and does not constitute legal or professional advice. Always consult with qualified professionals regarding specific contractual matters.
DOGE to SLED: Strategic Transition Pathway
A framework for federal contractors pivoting to State, Local, and Education markets
Phase 1: Market Research & Assessment
Begin by understanding the SLED market landscape and identifying where your federal expertise can transfer most effectively.
Analyze SLED Spending
Research the $1.5 trillion SLED market to identify high-demand services that match your capabilities.
Map Your Capabilities
Evaluate how your federal contract performance translates to SLED requirements and priorities.
Identify Target Jurisdictions
Select states and localities with procurement needs aligned with your offerings.
Phase 2: Entry Strategy Development
Develop a strategic approach to establish your presence in the SLED market with minimal friction.
Target Cooperative Contracts
Pursue opportunities with OMNIA Partners, NASPO ValuePoint, and Sourcewell to gain multi-jurisdiction access.
Pursue State MSAs
Identify and apply for Master Service Agreements that pre-qualify vendors for state agency work.
Form Strategic Partnerships
Partner with established SLED contractors to leverage their relationships and experience.
Phase 3: Adapting Federal Functions
Leverage your existing federal contracting infrastructure by adapting it to SLED requirements.
Repurpose Capture Teams
Adapt federal capture planning processes for SLED opportunities and fiscal cycles.
Reposition Past Performance
Highlight relevant federal experience in proposals, emphasizing transferable outcomes.
Adapt Contract Management
Modify compliance systems to address varying requirements across jurisdictions.
Phase 4: Market Expansion
Build on initial success to systematically expand your SLED footprint.
Develop SLED References
Cultivate and document success stories from initial contracts to enhance future proposals.
Expand Cooperative Coverage
Increase your presence across multiple cooperative contracts to maximize reach.
Geographic Expansion
Strategically target additional states and localities based on proven success models.
