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The Way State and Local Agencies Are Buying in 2026 Is Changing

If your business sells, or wants to sell, to state and local government agencies, there is an important procurement shift taking shape in 2026.

State, Local and Education procurement, commonly referred to as SLED, covers purchasing by state governments, cities, counties, school districts, public universities and other local public agencies.

And right now, the way many of these agencies are buying is changing.

According to Deltek’s Q1 2026 SLED procurement data, state and local bid and RFP volume declined about 4.2% compared with the same period last year.

At first glance, fewer bids and RFPs might sound like agencies are buying less.

But that’s not necessarily what’s happening.

Purchasing spend has continued growing roughly 4–6% per quarter, while state and local purchasing spend has grown more than 50% since 2019.

Fewer solicitations. More purchasing dollars.

That tells us something important. Agencies haven’t stopped buying. They’re becoming more selective about how they buy and which vendors they’re prepared to buy from.

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Agencies Are Buying Differently

One of the biggest changes taking shape in 2026 is procurement consolidation.

Instead of releasing several smaller solicitations, agencies are increasingly bundling needs into larger, longer-term or cooperative contracts. Deltek’s analysis points to agencies favoring vendors capable of handling broader scopes of work with fewer handoffs.

For contractors, that changes the strategy.

When agencies consolidate purchases, there may be fewer individual solicitations to respond to. But the opportunities that do become available can represent broader scopes of work or longer-term purchasing relationships.

It also means businesses need to pay closer attention to how agencies are purchasing, not just wait for a new RFP to appear.

Cooperative purchasing is part of that shift. Rather than every agency creating a separate contract for the same type of product or service, agencies can use existing contracts and purchasing vehicles to buy more efficiently.

For a business trying to sell into the SLED market, understanding those purchasing methods is becoming increasingly important.

Most businesses won’t be ready for what’s coming. Make sure yours is.

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Agencies Are Looking for Efficiency

There is another factor influencing the way agencies buy: staffing and operational pressure.

State and local governments continue to deal with hiring challenges, limited internal resources and growing demands for technology, infrastructure and public services.

Instead of building every capability internally, agencies can rely on outside vendors to provide technology, professional services, implementation support, infrastructure, public safety services and other capabilities.

But agencies also want to make those purchases efficiently.

That can mean fewer individual procurements, greater use of cooperative purchasing and stronger preference for vendors that are already positioned to perform.

The result is a procurement environment where simply finding an open bid may no longer be enough.

Businesses need to understand how an agency prefers to buy before they try to sell to it.

State Budgets Support a More Selective Buying Environment

The fiscal picture helps explain some of this shift.

States are dealing with tighter conditions than they were during the peak of pandemic-era federal funding. But that does not mean state purchasing has disappeared.

The National Association of State Budget Officers’ Spring 2026 Fiscal Survey found that estimated fiscal 2026 general fund spending was 3.9% above originally enacted budget levels. At the time of data collection, 29 states reported fiscal 2026 revenues exceeding their original forecasts.

State balances were expected to decline as governments spent down some previous surpluses, but remained well above pre-pandemic historical levels.

In other words, 2026 isn’t another blank-check spending environment.

It’s a more selective one.

And that helps explain why agencies may be looking for ways to consolidate purchases, reduce administrative work and make procurement more efficient.

Being Ready Before the Bid Matters More

A common mistake businesses make is waiting until they find an attractive contract before getting serious about procurement.

By then, they’re trying to build the airplane while it’s already taking off.

Vendor registrations may need to be completed. Certifications may require documentation and approval. Your NAICS codes need to accurately represent what you sell. Your capability statement needs to clearly communicate what your business does and why an agency should consider you.

Depending on the opportunity and agency, additional state or local vendor registrations may also be required.

More importantly, businesses should understand how their target agencies actually purchase.

  • Do they issue their own solicitations?
  • Do they rely heavily on cooperative purchasing?
  • Are they consolidating contracts?
  • Are they using existing contract vehicles?
  • Are they looking for prime contractors capable of handling broader scopes of work?

Those questions can matter just as much as finding the next RFP.

The Way Agencies Buy Is Changing. Your Strategy Should Too.

The early 2026 data isn’t simply telling contractors whether state and local agencies are spending more or less.

It’s showing us how procurement itself is changing.

Agencies are still buying, but procurement is becoming more consolidated and selective. Cooperative purchasing is becoming increasingly important. Governments are looking for efficiency, broader vendor capabilities and easier ways to acquire the products and services they need.

For businesses, that means waiting for an RFP to land in your inbox isn’t much of a strategy.

You need to understand where your target agencies buy, which purchasing methods they use and what your business needs to have in place before the opportunity appears.

Government Services Exchange helps businesses build that foundation through registration support, certifications, capability statement development and procurement positioning.

Because as agency purchasing changes, being qualified to sell is only part of the equation.

You also need to understand how they buy.

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Your opportunity is real.

Let us help you make both count.

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