Alliance may boost e-procurement

New Jersey State League of Municipalities

A New Jersey company that provides Web-based procurement for local governments

has struck an alliance with two state associations that could bolster use

of the online service.

Towndata.com Network Inc. recently announced an alliance with the New

Jersey State League of Municipalities, which represents the state's 566

municipalities, and the Governmental Purchasing Association of New Jersey,

a nonprofit group that represents nearly 300 government purchasing personnel.

The Neptune, N.J.-based company launched its online purchasing service

in January.

Keith Haurie, Towndata's vice president of sales and marketing, said

the state has been actively encouraging the use of e-government solutions,

including electronic procurement, during the past several months. He said

the company wanted to be in the forefront of that movement and aligned itself

with the two groups.

The state league links to Towndata from its site. But the purchasing

association indicates on its site that although it is in a "strategic alliance"

with the company, it is not in partnership with and is not endorsing the

company.

New Jersey law mandates that annual purchases of $17,500 or more be

handled in a sealed bid process from vendors. Below that figure, governments

can call around to get quotes.

But instead of calling around, municipalities, school districts and

other local government entities can use the Towndata site to post their

product specifications online. Then, through a reverse auction process,

qualified and registered vendors can bid on the product during a period

of several days.

Local governments and their agencies do not pay anything to participate,

but vendors pay a transaction fee to the company if they win an award. Vendors

also pay a one-time $150 set-up fee to join the network.

Haurie said nearly 100 municipalities and about 200 vendors actively

participate in the site in more than 90 different categories ranging from

office products to landscaping services.

More and more municipalities are recognizing the need for these services,

he said, adding that the adoption of technology has been one barrier in

the adoption of Web-based procurement.

The company is developing a "frequent buyer" discount program, similar

to frequent flier incentives. For example, the more a government participates,

the more points it would rack up for a discount applied to future purchases,

he said, adding that the program needs state approval.

The company is looking to expand into Pennsylvania within the next month

or so. Haurie said the state also is considering allowing municipalities

to use Web procurement to purchase certain commodities, such as fuel oil,

heating oil and rock salt, over the bid threshold of $17,500.