Local govt softly softly on e-procurement

Local Government Online, an organisation promoting and assisting collaboration among local government councils on the IT front, this week opens a cut-down e-procurement system for local government.

Local Government Online, an organisation promoting and assisting collaboration among local government councils on the IT front, this week opens a cut-down e-procurement system for local government.

Known simply as localgovt.procure, it does not attempt to be a full-blown e-procurement system but rather an “infrastructure” to enable buyers and suppliers to communicate, says Local Government Online chief Bob Vine.

It does not attempt to tie in particular suppliers with a favoured status and a compensating discount structure, nor does it have the accounting and invoicing routines for settling transactions.

The primary reason for limiting the functionality is cost, Vine says. A fully fledged e-procurement system for the country’s 86 councils would have cost something in the region of $5.5m, he says. The new system as implemented has probably cost a total of $1700 so far, he says. “It’s just a website, and sits within our existing website,” at www.localgovt.co.nz/procure/.

A dose of scepticism about full e-procurement contributed to the caution, following the collapse of some initially hyped “marketplace” ventures. “I have an [instinctive] feeling that the future of those businesses is not great,” Vine says.

One of the major divisions of the site is a “tenders room”, which has a direct hook in to the Tenderlink online tender service containing a record of all current tenders, requests for information or for proposal (RFIs and RFPs) in the public sector. This can be filtered to provide suppliers with only those tenders that fit their profile.

The central procurement “room” is subdivided to support regional purchasing groups. A number of councils are keen on encouraging local business and want the facility to advertise requirements only to local suppliers. At the same time, they can club together and achieve bulk purchasing power with one of those suppliers. A national procurement view is also available.

The exercise should save the local authorities millions of dollars on advertising, says Vine.

The site also has a “shared services” room, where local authorities can pitch outsourced services to one another, soaking up spare capacity in one while eliminating the need for the other to set up its own service.

No councils have definitely been recruited to the scheme yet, he says, though about 50 have expressed interest. Participation costs the councils nothing; the ongoing operation will be funded by a levy on suppliers.

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