Key Procurement Trends for Public Sector Teams in 2025

With rapidly shifting government priorities and increasingly volatile economic conditions, public procurement teams across state and local governments are understandably facing shifting priorities.

Budget constraints amid high prices, a demand for increased transparency, ever-changing regulatory requirements, and the push for digital transformation mean procurement leaders must stay ahead of emerging trends to ensure they are working efficiently, complying with regulatory requirements, and providing value to taxpayers.

Let’s discuss some of the key procurement trends public sector teams should have on their radar this year, and how you can implement them into your operations for lasting impact.

Digital Transformation and Procurement Software Expansion

Adoption of digital procurement solutions continues to gain momentum, with even the smallest public entities adopting procurement software platforms to streamline requisition and bidding, vendor and supplier management, and contract administration. According to the National Institute for Governmental Purchasing (NIGP), technology can increase supplier access to bid opportunities, which can result in increased competition and diversity and inclusion of suppliers. It can also increase contract compliance, improve transparency, reduce cycle times, and improve inventory costs. 

Make It Work for You

• Assess your current procurement processes, and identify any bottlenecks or pain points that digital procurement tools can solve.
• Invest in a digital procurement platform that integrates with your existing systems.
• If you already have procurement software, take stock of its performance and usage within your team and determine whether it is meeting your needs. If not, begin researching new tools to address the pain points you’re experiencing.
• Train procurement teams and suppliers and provide continuing education opportunities to maximize adoption and usability. 

AI and Automation in Procurement Workflows

AI-powered procurement tools are helping agencies automate repetitive tasks such as document creation, bid evaluations, vendor certification and compliance checks, and supplier performance tracking. An article from Deloitte Insights shows that AI is improving procurement efficiency while reducing manual errors, helping smaller teams to create more solicitations with fewer resources and focus their budget more strategically.

Make It Work for You

• Identify procurement tasks that can be automated, such as RFP evaluations or invoice processing.
• Explore AI-driven solutions that enhance contract compliance and risk assessment or address other pain points.
• Train procurement teams on how to leverage AI tools for strategic decision-making.
• Ensure that human oversight still exists for quality control.

Sustainability and Green Procurement Policies

Increasing pressure from taxpayers, rapidly changing regulatory requirements, and ever-evolving science have all lead to the prioritization of sustainable procurement for many public agencies. Greenwood Aerospace discusses why sustainable procurement and green purchasing policies are so important to align with climate goals and reduce long-term costs for agencies and taxpayers.

Make It Work for You

• Develop a sustainable procurement policy that prioritizes eco-friendly suppliers and products.
• Require vendors to meet sustainability benchmarks and provide environmental impact reports. 
• Educate procurement staff on green purchasing strategies and best practices.
• Understand federal and state regulatory requirements for green and sustainable materials and services.

Supplier Diversity and Local Economic Impact

In contrast to the shrinking of Diversity, Equity, and Inclusion (DEI) efforts in the federal government, many state and local agencies are actually expanding efforts to increase supplier diversity by working with minority-owned, women-owned, veteran-owned, and certified small business entities. BHD Agency, LLC lists 7 Ways Local Governments Benefit by Contracting with Small Businesses. The bottom line is that government entities that invest in supplier diversity strengthen local economies and foster competition. 

Make It Work for You

• Set measurable goals for diversity spending and track progress with reporting tools. 
• Implement small and disadvantaged business initiatives or quotas to set standards for utilization. 
• Establish outreach and buy local programs to connect with small and diverse suppliers. 
• Simplify procurement requirements to reduce barriers for small businesses. 

Compliance and Cybersecurity Readiness

Cyber threats are increasingly sophisticated, while more sensitive data is online than ever before. With heightened threats targeting government procurement data, agencies must prioritize cybersecurity and compliance with strict technology regulations. Procurement fraud and data breaches pose significant risks to public organizations. The NIGP provides a cybersecurity guide for public procurement.

Make It Work for You

• Conduct regular cybersecurity audits and ensure compliance with NIST, FedRAMP, or state security standards. 
• Implement secure digital procurement platforms with single sign-on and/or multi-factor authentication. 
• Train procurement teams on cybersecurity best practices to prevent phishing and fraud attempts. 

What’s Next? 

Existing and emerging procurement trends reflect shifting priorities in towards digitalization and community responsibility in public sector purchasing, but staying ahead requires continuous learning and ongoing adaptation by procurement professionals and public agencies.

Want to learn more about the trends facing procurement? Check out our 2024 State of Procurement Report or visit our Procurement Insiders resource center to dive deeper into procurement best practices and expert insights. Or get tips on budget and compliance, including downloadable guides to help you budget more strategically.