IT solicitations by state, local governments continue to decline in Q1 FY 2016 — report

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States and localities substantially cut back on the number of IT contract solicitations they issued in the first quarter of the 2016 fiscal year compared to the same period last year, according to the results of a new report.

Analysts at the research firm Deltek released a study of the company’s “GovWin IQ State and Local” database last week, and they found state and local governments solicited 19.2 percent fewer IT-related bids in the first section of the new fiscal year. Only contracts related to research and development, and environment and consultation services saw steeper declines from 2015 to 2016.

Researchers also examined the changes in the number of IT contract solicitations by individual states, and found that only nine increased their IT bids from last year. Wyoming led the way with a jump over more than 355 percent from a year ago, while Colorado came in second with a 153.5 percent increase.

By contrast, Ohio recorded the largest drop in IT bids, with a 75.2 percent decrease in the first quarter of fiscal year 2016. Maine was close behind with a 65.7 decline, while Vermont and North Dakota also saw similar drops, with decreases of 56.7 percent and 53.8 percent respectively.

[Read more: Report: State, local governments see IT contract bids decline in Q4 FY2015]

The analysts also examined trends across different kinds of IT projects. Of the areas they looked at, they found the largest drop in the number of tech solicitations put out by states and localities related to community development projects — researchers recorded a drop of 61 percent in 2016 compared to a year ago.

They also noted drops in the number of bids for IT projects associated with “justice/public safety” and “natural resources/environment,” with those areas notching drops of 45.3 percent and 44.7 percent respectively. Education-related tech efforts also saw a 36 percent drop.

However, researchers note that IT companies shouldn’t panic about these results quite yet.

“Contractors should not be overly concerned by this and should expect a [second quarter] increase in IT, as many governments look to close out their fiscal year books,” the analysts wrote.

Deltek’s study of IT solicitation trends for the final quarter of fiscal 2015 found similar declines, with the group uncovering an 11.3 percent decline among states and localities.

Contact the reporter at alex.koma@statescoop.com, and follow him on Twitter @AlexKomaSNG.

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Deltek, Economy, IT procurement, State & Local News
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