States buy into e-buying

• By Dibya Sarkar
• Apr 02, 2001

Virginia and North Carolina are building electronic buying systems to make work faster, easier and cheaper for agencies statewide.

In Virginia, Bette Dillehay, the commonwealth's deputy secretary of technology, called her state's system an "electronic mall" where agencies could shop for products and services. The prices would be set, so agencies wouldn't have to negotiate contracts themselves. Future enhancements include online auctions and making the system available to local governments.

Meanwhile, North Carolina is building a Web-based procurement system that will be open to every agency, municipality, university, community college and school in the state. The state plans a July 1 launch. Officials estimate the system will save about $50 million annually for state agencies and other entities through cheaper goods and services and increased efficiency.

Accenture, a technology consulting organization (formerly Andersen Consulting), and Epylon Corp., a public-sector e-procurement provider, will jointly develop North Carolina's system. American Management Systems Inc. built Virginia's, called eVA (www.eva.state.va.us), and will make its money through transaction and registration fees, Dillehay said.

In Virginia, vendors pay a one-time basic fee of $25 or an advanced fee of $200. The basic fee includes online access, vendor catalog posting and services such as electronic receipts and online bid submissions. The advanced fee includes the basic service plus automatic electronic receipt of bid documents and the ability to research historical procurement information.

Vendors also must pay a 1 percent transaction fee per order, not to exceed $500.

Accenture will recoup its investment in North Carolina through a 1.75 percent marketing fee charged to suppliers on each order.

Dillehay said Virginia vendors have had mixed reactions to the system, but she didn't expect them to pass on the additional costs to agencies. The commonwealth has guaranteed AMS a certain level of business, she said. Once that is reached, revenues would be split between AMS and the state. If the guaranteed level is not reached, the state would have to make up the difference, she said.

Sharon Hayes, director of North Carolina's portal (www.ncgov.com), said the site initially will offer products and electronic quotes. It will expand to include services and electronic bids, she said.

Epylon will post vendors' catalogs on the North Carolina site for free, and buyers will be able to choose from a nationwide market. The company also has special programs for women- and minority-owned businesses. Unlike in Virginia, where state agencies can opt into the commonwealth's just-launched e-procurement system, Hayes said North Carolina's system is mandatory for agencies. She said it will save money, improve workflow management and increase accountability.

"A lot of them don't know where they're spending that money or what they're buying," she said.