The Beginning of the End of Paper Procurement.

• Author: Wood, Lawrence E.
• Position: Brief Article

San Diego County, California, was one of the earliest and most successful counties to adopt Internet purchasing.

In 1995, with a growing population and increasing demands for county services, Purchasing and Contracting staff struggled with an increasing workload in the midst of shrinking internal budgets. To relieve the workload, management decided to follow the federal model and adopt simplified procurement processes for purchases under $100,000. Yet, continued use of a manual process, even though it had been simplified, was not enough. Management decided that the simplified processes would have to be accompanied by the application of technology, automation, and e-commerce.

To meet this goal, the Purchasing and Contracting office teamed with the county's Department of Information Services to develop BUYNET--a system that would integrate the existing on-line requisitioning system and the accounts payable system.

How it Works

BUYNET is designed to target procurements under $100,000, accepting offers strictly on the basis of price. County procurement specialists convert electronic requisitions into electronic solicitations, which are then posted on the BUYNET Web site--essentially an interactive electronic bulletin board. After suppliers profile themselves, the system e-mails them anytime a solicitation is posted for the goods that they sell.

Suppliers access the Web site and respond to solicitations electronically. The system collects the suppliers' electronic responses and stores them in a virtual lockbox until the scheduled solicitation close time. After the scheduled close, the system dumps the offers into a spreadsheet, does the math, and lists them in ascending order by total price. Procurement specialists download the results, and decide on the winning vendor based upon the lowest bid. The awards are then posted on the Web site, so that all vendors can see how they stacked up against the winning vendor. The procurement specialists finish the transaction by printing out the purchase order and mailing it to the vendor.

The process has benefits for suppliers, purchasers, and their customers, including the following.

* With BUYNET, suppliers have better information. They can scan on-line information to see what the county is buying, from whom it has been buying, and the price it has paid. There are no missed opportunities because the supplier's name fell off a buyer's bid list. Because suppliers can control their access to solicitations...