In some states, technology has wrought permanent changes in the legislation that governs interactions with vendors
Best practice information abounds for state and local governments lookingto design, test and launch online procurement systems. Harder to find, however,is a precedent for making sure that the new way of doing business is appropriatelyaligned with the laws and rules that dictate how governments buy.
In many cases, electronic purchasing systems are built to conform toa government's existing procurement statutes. But it is a measure of theimpact of e-procurement that in some states the technology has wrought substantialand permanent changes in the legislation that governs the states' interactionswith vendors.
Getting legislative approval to do business electronically is no smallmatter because the thicket of laws and rules that govern public-sector buyingvary widely from state to state and are frequently rooted in a paper-basedpurchasing environment.
The need to align procurement laws with e-procurement procedures wasthe driving force behind a recently completed major reform effort in Idaho.In March, Gov. Dirk Kempthorne signed a bill that modifies and updates statuteslast changed in 1974. Altogether, the reform effort resulted in 20 changesto 12 different sections of the Idaho code.
The comprehensive bill, which becomes law July 1, provides the legalunderpinnings necessary for the state to take advantage of e-procurementfunctions, such as posting bid notices online and accepting bids electronically.And by addressing a wide scope of buying procedures, tactics and traditions,it enables a new buying environment that streamlines the procurement processfor agencies and vendors alike.
"It really does have a freeing effect," said Jan Cox, administratorof the Idaho division of purchasing. "The changes modernize an environmentthat was based on paper transactions. It had been 25 years since we laststirred around in our purchasing statutes, and they served us well overthe years. But times have changed, and now the statutes essentially encouragedoing business online."
One key change enabled by the legislation is the elimination of thestatutory requirement that vendors pre- register before bidding on statecontracts. Removing the legal mandate for pre-registration leaves the statefree to construct an online alternative that promises to be quicker, easierand less costly for vendors, Cox said.
The modernization effort also institutionalizes changes in the state'spurchasing culture that have been under way for some time. In 1998, forexample, the state launched its successful Purchasing Card program, whichenables employees from more than 40 agencies to buy goods and services witha MasterCard credit card. A short while later, Idaho was one of five statesselected to participate in an electronic mall pilot project designed totest online purchasing concepts developed by Massachusetts.
The state then began a home-grown pilot in August 1999, in cooperationwith Syscom Inc. The PublicBuy.net electronic purchasing system — a jointventure among Syscom and other companies — will be in place by the timethe new legislation becomes law July 1.
To augment the launch, which gave agencies and vendors a chance to testthe technology involved in posting and placing bids via the state's Website, the Department of Administration formed a Purchasing ModernizationTask Force. The goal there is to evaluate the existing statewide systemand recommend improvements. In addition to purchasing officials, the taskforce included IT technical support staff, representatives from state agenciesand vendors.
"The task force was put together primarily to look at what we neededto do to move into electronic procurement," Cox said. "But in doing so,it also gave a lot of the agencies a chance to discuss their concerns aboutthe way that business was being done, and it got them involved in craftingnew solutions. So we had a lot of agency buy-in."
Concerns about vendor participation, including worries about accessto the Internet in rural parts of the state, were allayed in the pilot bya survey of companies. Questioning some 300 participating businesses inlarge and small communities at the end of the project's first year, thestate received more than 200 responses, with surprising results.
"Ninety-two percent of the vendors who responded said they were readyto do business with the state electronically," Cox said. "And the numberof positive responses that came from vendors in small rural communities,where we had worried about the availability of Internet access, were particularlyencouraging."
Walsh is a freelance writer based in Peekskill, N.Y.
NEXT STORY: NASA extends services pact