Federal Contracts Are Drying Up. Here’s Why State & Local Should Be Your Next Move.

If your federal pipeline is shrinking, stalling, or straight-up vanishing, you’re not alone. The new administration is shifting priorities, contracts are getting canceled, and procurement delays are stacking up. But while the federal side of government contracting is playing the waiting game, state and local governments are still spending.

Here’s the reality: if you’re only focused on federal work right now, you’re leaving money on the table. The best time to diversify your client portfolio was last year; the next best time is NOW.  

State, local, and education (SLED) contracts move quicker, sometimes come with less red tape, and – spoiler alert – you already have the skills to win them. You just need to know how to pivot.

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Let’s break it down.

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What is the SLED Market?

SLED contracting is a massive, complex, and often overlooked market filled with opportunities. Here’s a breakdown of who’s buying:

• State Governments: The largest buyers in the SLED space, states fund massive contracts in infrastructure, technology, public safety, and more. They oversee everything from highways and elections to emergency response and licensing, making them a prime target for companies offering broad-scale solutions.
• Cities, Counties, and Local Agencies: From major metropolitan hubs to small towns, local governments handle public transit, zoning, law enforcement, and community development. They move faster than state and federal agencies, making them an ideal entry point for businesses looking for quicker wins.
• Regional and Special Districts: These independent government entities focus on specific services like water, energy, healthcare, and transportation. If your business provides niche solutions, special districts can be a strategic way to win contracts outside traditional state and city procurement cycles.
• K-12 School Districts: School districts do more than purchase textbooks. They’re major buyers of construction, technology, food services, and transportation. Some operate independently, while others follow state or municipal procurement rules, so understanding how they buy is key.
• Public Colleges & Universities: Higher education institutions spend big on IT, facilities, research, and consulting. Many have their own procurement offices with dedicated budgets, making them a strong market for companies that can offer specialized expertise.

Federal vs. SLED Proposals: Same Game, Different Rules

The good news? Your federal experience gives you a huge advantage in SLED contracting. Many of the proposal best practices you live and breathe for federal bids still apply, including:

Follow the rules, or get tossed. Just like federal RFPs, SLED proposals require strict compliance with formatting, forms, and submission guidelines. You can’t phone it in.

Past performance matters. The difference? SLED agencies aren’t as strict about only accepting state/local work. Your federal experience makes you look like the grown-up in the room.

Low price isn’t always the best price. Many SLED agencies focus on best value (not just lowest cost), which means if you can prove your experience cuts down risk, you win.

Relationships = wins. If you’re only engaging when the RFP drops, you’re late. State and local buyers love vendors who actually show up before they need something. Sound familiar?

Certifications still matter. Just like in the federal space, many SLED agencies prioritize small businesses, woman-owned, minority-owned, and disadvantaged business certifications. Having the right designations can help give you an edge in competitive bids.

But here’s where things shift.

What’s Different About SLED Bids? (And Why It Works in Your Favor)

Speed Kills (or Wins). SLED procurements don’t drag on for a year. You might have a month (or less) from RFP release to submission. If you’re used to the slow-moving federal machine, get ready to move fast.

Less Bureaucracy, More Impact. SLED proposals offer more than just a checklist of requirements. They give you the space to tell a compelling story, align with the agency’s mission, and stand out in a meaningful way.

Every State, City, and County Plays by Its Own Rules. Unlike the federal world, where the FAR dictates how things work, SLED is the Wild West. One state might require pre-registration/pre-qualification months in advance; another might let you bid cold. You need to know the landscape.

Contract Vehicles Look a Little Different. While SLED agencies use Master Service Agreements (MSAs) and Indefinite Delivery, Indefinite Quantity (IDIQ) contracts, they don’t have federal-style Government-wide Acquisition Contracts (GWACs) that allow broad, multi-agency purchasing across states. Instead, each state, city, and county sets its own procurement rules and contracts, meaning there’s no single pathway to selling across jurisdictions. Understanding how agencies buy – and which contracts they rely on – can give you a competitive edge.

Local Preference is a Thing. If you’re an out-of-state (and sometimes, out of city or county) contractor, some agencies will make you work harder to win. Teaming with local partners is your workaround.

How to Start Winning in SLED (Before Your Federal Pipeline Disappears)

1. Mine the Data. Find expiring SLED contracts where the incumbent will need a recompete strategy. Identify agencies spending in your region and industry. (Hint: We can help.)
2. Get Registered in State Vendor Portals. Some states make you jump through pre-qualification hoops. If you’re not set up in their system, you won’t even be considered. (Hint: We can help here, too.)
3. Leverage Your Federal Wins. Your experience dealing with federal compliance, security, and reporting makes you a low-risk, high-value choice for SLED buyers. Sell it.
4. Start Small, Scale Fast. Don’t chase the biggest state contracts right away. Win a few smaller ones to build credibility, then go after the big fish.
5. Know the Certification Rules. Many SLED agencies prioritize small, woman-owned, minority-owned, disadvantaged, and local businesses, but they don’t always recognize federal-level certifications. Each state, city, or county may have its own certification process, so check their requirements and register accordingly to ensure you qualify.
6. Show Up Where It Counts. Certification alone won’t win you contracts, just like in the federal market. You always need to use your certifications strategically. Research agency websites to find upcoming small business enterprise (SBE), disadvantaged business enterprise (DBE), minority business enterprise (MBE), and women’s business enterprise (WBE) industry days. Also, check out organizations like the Women’s Business Enterprise National Council (WBENC) and the National Minority Supplier Development Council (NMSDC), which frequently partner with SLED agencies to host networking and matchmaking events that connect vendors with decision-makers.
7. Engage Before the RFP Drops. Just like in federal contracting, relationships win. Attend small business days, network with decision-makers, and get on their radar before they issue an RFP.

Bottom Line: Federal Work Isn’t the Only Game in Town

You don’t have to sit around waiting for federal contracts to unfreeze. State and local governments are actively buying right now… and they need vendors who actually know what they’re doing.

That’s where you come in.

At Summit Strategy, we’ve been writing winning SLED proposals for 20+ years – even in the most complex procurement environments like California, New York, Florida, and Texas. We know how to pivot your federal strategy to fit the nuances of state and local contracting, helping you position effectively, navigate compliance hurdles, and craft proposals that win.

Whether you need a SLED proposal readiness plan, capture strategy, or expert guidance to break into this market, we’re here to make the transition seamless and profitable.

Ready to stop waiting and start winning? Let’s talk.

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