Online purchasing system improves efficiency

A recent study by the state of Texas concluded that cities, counties and states spend an average of 5.5 cents to process each dollar of procurement, while the private sector spends just 1 cent per dollar to perform the same function. However, as officials in Montgomery County, Md., will attest, technology helps reduce purchasing costs while improving efficiency.

In the early 1990s, the county’s procurement office had its administrative staff reduced from six to one and its operating budget cut. The office, which annually awards more than $350 million in purchases, was using a detailed, laborious process that entailed mass mailing to 400 vendors for a typical bid solicitation. Usually, fewer than 5 percent of vendors responded.

With costs escalating for postage, paper and administration, the office decided to re-engineer the procurement process, resulting in the development of the Re-engineered Automated Procurement Information Delivery (RAPID) system. The interactive web site allows users to access, review and download contract solicitation information from many public sector organizations.

RAPID emerged initially as an electronic bulletin board, accessible to users through their fax machines or through a direct PC/modem hookup. However, the Internet’s explosive growth prompted the designers to develop a web page (http://www.co.mo.md.us/services/procure).

Designed as a subscription service, RAPID currently generates about $100,000 in revenues per year, some of which is used to support hardware and software upgrades and to market the system to prospective vendors. Using commercially available hardware and software (Faxfacts from Bakersfield, Calif.-based Mustang Software; software from Parsippany, N.J.-based Dialogic and modem boards from Motorola, Schaumburg, Ill.), it cost about $7,000 to implement, paying for itself in one month.

RAPID’s success has enabled the procurement office to discontinue mailing procurement solicitation documentation to prospective vendors. Mailing, postage and reproduction costs have been reduced by 70 percent. Additionally, procurement office staff members no longer need to field telephone queries on routine procurement matters.

Since observing RAPID’s success, 20 independent public sector organizations have adopted the system. Some of the organizations submit information to the RAPID administrator, who puts the data into the system. Other organizations provide a link to their own web sites.

The online system is advantageous to vendors because RAPID solicitations can be viewed 24 hours-per-day using a “one-stop shopping” format that eliminates the need to visit procurement offices. Many local entities also use the system to describe their minority contracting procedures and walk applicants through the certification process.

RAPID has won awards from the National Association of Counties, Washington, D.C., and from the Ford Foundation’s Innovations in Government program, which is affiliated with Harvard University’s JFK School of Government.