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Government Buying and Selling on the Internet
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
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
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
Now, with the expansion of electronic government and recent government initiatives encouraging
agencies to implement online procurement systems, many agencies are 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 web
site 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 web site 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 they have realized a
savings of over $355,000 by posting approximately 85 solicitations from January to June of 2004
on their 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 e-mail every time bids are issued that match their profile and are given the
ability to respond to quotes by fax or e-mail.
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.
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.
|This article was submitted by - Christina DeMers||Please Rate/Review this Article - Recommend it to friends|
Government Buying and Selling on the Internet
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