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Contracts
and Claims
Timely articles covering the most pressing issues
facing construction firms in the Midwest
Government buying and
selling on the Internet
by Christina DeMers
BidNet
Global Insight, a leading economic and
financial forecasting company, (formerly
DRI-WEFA), states that all levels of government
(federal, state, and local) should see steady
increases in the purchases of goods and services
through the year 2009. Vendors willing to make
the commitment to sell to government can reap the
benefits of this projected government spending.
By the same token, government agencies able to
expand and modernize their procurement programs
can reap the rewards of increased productivity,
and a reduction in the costs of goods and
services. If you are a company looking to
efficiently market your goods or services,
increase sales and receive targeted sales
opportunities, or if you are a government agency
looking to simplify your procurement process and
increase vendor competition, there exist plenty
of opportunities in today’s
online procurement marketplace.
Vendors: Consider selling to government
If you haven’t
considered selling to government, you are missing
out. With past events like the creation of the
Department of Homeland Security, and the slowing
down of the private sector economy, more
companies are focusing on doing business with
government agencies. Believe it or not, the most
reliable component of the economy right now is
the government.
The U.S. Federal Government is the largest
buyer in the world, and state and local
governments often make up a large percentage of
their respective marketplaces In many cities,
government employs more people and buys more
products and services that any other entity.
Doing business with government isn’t just for corporate
giants, either. The U.S. Small Business
Administration (SBA) helps to ensure that small
businesses obtain a certain percentage of
everything the government buys. And despite
budget crunches in many municipalities, state and
local government spending remains the largest in
any single market in the nation.
Deciding whether to bid on a government
contract can have far-reaching and long-term
implications for companies. It is crucial to
reach the right decision –
a decision which contributes to the health of an
organization. If a company decides to bid, it is
creating an opportunity to make money, enhance
its reputation, gain experience and cement a
relationship with a major new customer.
Where do vendors start?
There are literally tens of thousands of
purchasing agencies to deal with, and it is
difficult to know where to begin. Unfortunately,
bidding for lucrative government contracts is a
highly decentralized process. Companies used to
have to be on an agency’s
bidding list in order to be notified of a
purchasing opportunity.
Now, with the expansion of electronic
government and recent government initiatives
encouraging agencies to implement online
procurement systems, many agencies a re making
the move to e-procurement. However, even with
this move to online purchasing, identifying
targeted bids can still be very challenging for
companies.
Finding and monitoring bid notices is
difficult because they are posted in so many
different places, and often not well organized.
Your business can spend a great deal of time
surfing from one site to the next trying to track
down the right bid opportunities.
In one area of government bidding, however, an
effort to create a government-wide point of entry
website has resulted in an Internet purchasing
marketplace called FedBizOpps. As of October 1,
2001 the Federal government requires federal
agencies to use this system to post all their
opportunities expected to exceed $25,000.
Although no such central website exists for
the over 87,000 state and local government
agencies in the country, there are services
available that match a company’s criteria with agency
bids on the Internet, then send this information
directly to them via email.
The benefits of using a bid matching service
are detailed by Tammy Axlund, a marketing manager
with Midland Resources who says, “(Using a Bid) service
has helped us build a national database to keep
track of the industry happenings throughout the
country, rather than just our region. We have
also been able to win a few bids of which we had
no prior knowledge.”
Similarly, Teresa Eastman, the Inside Sales
Manager for Accurate Safety Distributors, Inc.
states “I no
longer have to spend my days looking for bids
individually, a needle in a haystack so to speak,
instead (the bid service) does it all and sends
them to me daily.”
While no service can provide your company with
every bid opportunity from every state and local
government agency, bid matching services greatly
reduce a vendor’s
time and money spent, allowing for additional
time to be used to respond to bids.
e-Procurement Benefits for Government:
Save time, save money
In the recent past most agencies had to copy
and mail their bid packages to any vendor who
requested them, even though many would decide not
to bid. Using an online e-procurement system
allows agencies to simply provide vendors an
electronic notice of their opportunities. This
results in a tremendous savings in postage,
paper, and time.
There have also been new efforts to simplify
the entire procurement process for government
agencies. For example, many agencies are having
procurement systems customized for them using the
Internet, driven by the need to disclose.
Agencies used to be required to advertise all
their requests for bid in the newspaper. But in
recent years, the statutes in many states changed
to permit advertising on the Web instead – which meets purchasing
departments’
requirements to make contract information public.
While posting bid information may seem like a
lot of work, it isn’t
a duplicate process for government agencies
because their sites serve a dual role as a
vehicle for disclosure, and as their primary
document archive. And usually only a minimal
staff is required to keep the site up to date.
Karen Storm, director of Purchasing for Albany
County, NY, explains that since joining the
Capital Region Purchasing Group, an e-procurement
system in upstate NY, “Our
municipality has streamlined the bid distribution
and vendor notification processes. This has saved
us hours of repetitive clerical tasks and has
significantly reduced our copying and mailing
costs. Our vendors love the system because it
provides them immediate access to our information
at little or no cost.”
The City of Rochester Hills, Michigan, reports
similar benefits, explaining that it has realized
a savings of over $355,000 by posting
approximately 85 solicitations from January to
June of 2004 on its e-procurement system, the
Michigan Inter-Governmental Trade Network. And,
the Santa Rosa County School District Purchasing
Department, which has been using an e-procurement
system since the fall of 2000, says “The biggest benefit we
have realized is that we no longer have to manage
our bidder’s list.
Our old bidder’s
list had grown to over 20,000 vendors, most of
whom never responded to solicitations. Managing
the list was a burden that we do not miss!”
Many companies have been working with
purchasing departments to create customized
e-procurement systems like the ones described
above, that simplify and expedite the entire
procurement process. And the best part is, they
do this free of charge.
E-procurement systems provide many benefits
for vendors as well. Vendors simply register
themselves online with a system and create a
profile specific to their products and/or
services. Vendors then receive notices instantly
by fax or email every time bids are issued that
match their profile and are given the ability to
respond to quotes by fax or email.
Systems like this can save companies
significant amounts of time while increasing
sales, it’s also a
good way for tax dollars to help grow businesses
of all sizes and generating new profit centers.
At the same time, government agencies benefit by
decreasing their spending, gaining more control
and simplifying the procurement process.
What are you waiting for? The new era of “e-procurement” is here, and it has
significantly streamlined the entire bidding
process for both buyers and sellers alike. \
About the author
Christina DeMers is the Marketing Coordinator for
BidNet, a firm that has been providing services
for both government buyers and their vendors, for
almost 20 years. More information about BidNet
can be found at their web site:
http://www.bidnet.com or by calling:
(800)-677-1997.
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