Report: Procurement projects are up this year with increase in federal spending

At annual town meetings and in city council meetings, discussion about new buildings and the latest equipment upgrades might take center stage. But while topics like these often make headlines, there’s a much less flashy process that deserves equal attention: procurement. The latest annual report from the software company Bonfire, “2022 State of Public Sourcing,” sheds light on trends in the industry.

“Through thick and thin, procurement teams are the superheroes driving our public agencies forward,” reads the introduction to which was published this month. “With new funding being pumped into state and local governments, procurement has been at the center of it all, managing a huge uptick in projects and responding to new demands for digital transformation, human resources, new ways to engage suppliers, and more.”

In a webinar hosted by American City & County Thursday, Brandon Zanussi, team lead of client success at Bonfire, discussed the findings from the study, unpacking five themes Bonfire researchers identified as drivers of efficient procurement systems: vender diversity, collaboration, digitization, client service and cost savings.

“Whether you feel like it or not, procurement has never had more of an opportunity to be a change agent,” Zanussi said, noting that procurement officials have managed a “huge uptick in projects” over the last year.

“As we step into this next era of public procurement—marked by a flood of federal infrastructure funding, project growth, the ‘Great Resignation,’ and more—procurement teams that hone these five superpowers are going to be the ones tackling these new challenges in stride,” said Omar Salaymeh, CEO of Bonfire in a statement about the findings, which were gleaned by analyzing anonymized data from the Bonfire eProcurement platform.

Among highlights from the report, a statement about the findings notes that agencies are prioritizing vendor diversity more than ever: 33 percent of all transportation agencies, 20 percent of higher education institutions, and 11 percent of K-12 schools are tracking vendor diversity and intentionally partnering with small or disadvantaged businesses. Other highlights include a 7 percent rise in e-procurement usage and increased savings through digitization.

Overall, projects are up by 28 percent this year, building on last year’s similar increase. And of all projects, transportation and utilities saw the highest increases.

“With such a large focus on transportation and aging utility infrastructure in recent funding, it’s no surprise that these procurement teams are working overtime,” the report says. Transportation projects are up 33 percent over the same period last year, and utilities projects are up 13 percent. 

Given the massive amount of federal funding that’s pouring into local governments over the last year (with the passage of legislation like the American Rescue Plan Act and the Bipartisan Infrastructure and Jobs Act), construction-related projects have increased by 56 percent. Behind construction contracts, there were 36 percent more software projects.

And with the rising popularity of technologies like e-procurement systems, the complexity and length of a typical RFP (request for proposal) is decreasing. This year, the average length of all proposals is 49 pages, compared to 56 last year.

Given the data, with project volumes increasing significantly over 2021, the report shows how public procurement teams are setting new priorities, strategies and goals in the context of current events, the statement continues, including COVID-19 recovery efforts, a recent influx of federal infrastructure funding, and challenges related to the mass labor market disruption.

Download the full “2022 State of Public Sourcing Report” for free on Bonfire’s website.