Feds eschew online buying

A new study says federal agencies use the Internet for just 1 percent of all procurement spending.

Despite online auctions, GSA Advantage and a general electronic procurement push during the Clinton administration, federal agencies have moved very little of their buying power to the Internet, a private research organization reports.

Agencies spent $13.8 billion in 2000 buying goods and services online — about 1 percent of their total procurement spending — according to Jupiter Media Matrix, Inc., a research company based in New York.

"Adoption of internet-based [procurement] technologies has lagged," the company said in a report released in May.

Jupiter's gloomy findings correspond with those of the Coalition for Government Procurement. The coalition found that online buying accounted for only one-half percent of the goods and services federal agencies bought through the General Services Administration.

In an effort to boost online procurement, GSA will require its vendors to list their products on GSA Advantage, the agency's online procurement site, starting in July. That will increase the number of GSA suppliers offering products over the Internet from 4,000 to 9,000, and it could double the amount of buying that government agencies do online. Even so, Jupiter estimates online purchasing by government agencies is likely to increase only to 2 percent of all purchases. The amount is surprisingly small considering the "high-profile efforts by the Clinton administration to push federal e-procurement," the researchers said.

The dearth of online buying doesn't surprise Larry Allen, director of the Coalition for Government Procurement. Online buying is best suited for "commodity type products" such as pens, pencils, paper and other supplies the government consumes regularly, he said. Those are relatively simple, low dollar items, which keeps online procurement totals low.

Online buying is not well suited for more costly and complex items, such as high-end computers, servers or office furniture, Allen said. The various alternatives and multiple configurations of those items often require personal contact with vendors.

"The $64,000 question is whether services should be able to be bought online. GSA would like to think so," but the Coalition for Government Procurement doubts it, Allen said. The complexity of buying most services probably precludes buying them online, he said.

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