B2G firm ready to rumble

• By Colleen O'Hara
• May 15, 2000

As the business-to-government (B2G) e-commerce market heats up, NIC Commerce is trying to position itself in the middle of the action — right where sellers and government buyers do business.

The Reston, Va.-based company makes software that helps agency employees find, compare and purchase products and services across multiple catalogs on the World Wide Web. The company was called eFed before it was acquired last September by the National Information Consortium.

The acquisition combines NIC's experience building Internet portals for state and local agencies with eFed's federal presence and e-procurement software and hosting services.

What sets NIC Commerce apart from its competitors such as Ariba Technologies Inc. and CommerceOne is its single-minded focus on the B2G market, said John Lee, a former eFed official who is now executive vice president of NIC Commerce. "Our market is the business-to-government market," he said. "We understand government business rules."

Looking for a quick splash, the company made several announcements late last month targeted at the nascent B2G market. Among them was a partnership with Citigroup's Electronic Commerce Division, in which NIC Commerce software will support CitiMart, an e-mall gateway that allows government users to buy products from vendors through a Web browser. The e-procurement software helps agencies purchase and reconcile items bought with the Citibank government purchase card.

NIC Commerce also released the latest version of its flagship procurement software, which is designed to make it easier for federal users to customize and compare products they want to buy online. With eFed Version 3.0, users can conduct a side-by-side comparison of systems from multiple vendors before making a purchase. Users also can customize the system they want to purchase by choosing different components, such as memory, from different vendors. The new version of eFed also gives vendors the ability to update their online product data on an as-needed basis and to modify individual items on the site in real time. The software works with existing contract management and back-end financial systems.

The Air Force Standard Systems Group will use the new software to help run its Air Force Information Technology Superstore, which offers buyers access to hardware, software, networking, service contracts and blanket purchase agreements (see related story).

In addition to the new software, NIC Commerce announced that the General Services Administration's Federal Supply Service will integrate the company's Request for Quote Module into the GSA Advantage online shopping site. The E-Buy quote module will streamline the request-for-quote process.

Staking Claims

Market analysts expect more vendor consolidation in the B2G market as companies scramble to assemble the products and customer relationships needed to compete in this fast-growing market.

"There's no magic or mystery to procurement technology," said Joseph Marino, research analyst at Current Analysis Inc., Sterling, Va. "It's a question of who is the quickest and nimblest and best at integrating things."

Although not a corporate merger, American Management Systems Inc. and Ariba teamed up late last year to stake their claim to the government e-procurement market. The deal was the first strategic partnership for AMS in the B2G market, and Ariba's first concentrated initiative in the public sector.

If successful, the alliance could make major inroads into the many procurement networks — both closed and open systems — and the legacy supply chains that exist in the government, Marino wrote in a report.