E-Procurement: Harnessing the Potential of Tech, Addressing Stakeholder Buy-In


To jump-start our ailing economy and nurture a new era of domestic manufacturing, state and local governments must find ways to reduce spending, consolidate and align processes, and provide more substantial value for taxpayer dollars.

Advances in Web technology have created an industry of automated procurement services, including in-house, stand-alone, and pay-to-procure e-marketplaces for both public and private sectors. Both sides would agree that more efficiency and transparency is a better way of doing business, but public officials are charged with the responsibility of fulfilling a harmonious environment of reciprocity and egalitarianism that is hard to achieve in the public sector when private enterprise await at the crossroads.

For government, the value of e-procurement is a combination of efficiency and a competitive advantage among vendors, which shall reduce cost and increase quality.

Since 2006, Economic Engine, a stand-alone software vendor, has provided the Lexington-Fayette Urban County Government (LFUCG) with a third-party solution for RFP distribution, access to technical documents, and new vendor registration. Economic Engine can be accessed through the LFUCG website (/https://lfucg.economic

engine.com).

“We process approximately 200 competitive bids [$20,000 plus] per year, 50 RFPs [$20,000 plus] per year, and 20 quotes for informal contracts between $10,000 and $20,000,” said Todd Slatin, purchasing director for LFUCG. “Automated e-procurement services have saved administrative costs, and we have used Economic Engine and e-procurement to help keep our staff numbers from growing.”

Larry Hancock owns Procurement Assistance Software & Support, LLC (PASS), which is the licensed administrator for Economic Engine. He handles support and training out of his home in Lexington for several clients, including Lextran and the National Association of Housing and Redevelopment Officials (NAHRO).

According to Hancock, “The Lexington-Fayette municipality should be a benchmark for local governments around the country for integrating a high level e-procurement system.”

As Hancock explained, lower-level e-procurement services are strictly communication devices, providing announcements of solicitation opportunities, instructions for finding solicitation documents and a centralized registry for vendors. Higher-level services provide automated tools for submitting RFPs, bid documents and posting addendums, as well as support tools handling evaluation and compliance issues, bid protests and even e-signatures.

Hancock entered into an agreement to license the Economic Engine technology in 2005 after the original client, Wayne County, Michigan (Detroit), didn’t fulfill the contract because the county commissioner retired, which caused issues not only in the procurement area, but also across the breadth of the county government.

NAHRO has been utilizing the PASS/Economic Engine Software and Support for more than 10 years. The NAHRO members utilizing the software have budgets ranging from $100,000 to $30 million per year.

“The technology has been around for at least 10 years, but there is a lot of resistance to e-procurement. Governments and private companies are skeptical to buy in, fearing additional costs and more headaches than it could potentially be worth; they don’t realize just how affordable and easy to use software like Economic Engine really is,” Hancock said.

E-procurement is not for everyone; some officials or CEOs might consider email and a fax machine to be all the e-procurement they need, and others might not want the extra attention when they are accustomed to dealing with a regular group of reliable vendors.

Perhaps the most important resistance of all comes from the vendors themselves. As a 2012 brief by the National Association of Procurement Officials (NASPO), titled “Meeting the Challenges of World Class Procurement,” explains: “Companies may not participate when procurement systems are too complicated, leading to states losing the benefit of full and open competition.”

On the other hand, a few entrepreneurial-minded people like Hancock have embraced complexity, vowing to make it easier for proprietors, vendors and officials to find the services they need by weeding through the vast amount of open-records content and reposting it on their own e-marketplace, for which these “crawlers” charge fees for varying levels of information and support.

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