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CAL-Buy Clears $25 Million Mark

The statewide e-procurement system is a year old and is going strong.

SACRAMENTO, Calif. -- In its first year of operation, CAL-Buy helped state government buyers make more than 1,200 purchases worth upwards of $25 million.

Purchasers used CAL-Buy to obtain everything from police cars to flour to office equipment and school buses, and nearly 50 percent of the purchases were made from California certified small businesses.

The system, launched in March 2001, was expanded last June to give government buyers electronic access to more than 6,000 products sold by 290 suppliers, a fourth of which are small businesses.

With CAL-Buy, all suppliers:

- Receive orders that take minutes via e-mail or automatic fax, rather than the days it takes to receive a purchase order through the mail;
- Have their commodity catalogs available online in a searchable format, accessible via the Internet;
- Are credited with providing the catalog items, since their items are flagged as small business commodities;
- Receive more accurate, consistent, and timely orders; and
- Reach a broader buyer base without the need for typical marketing expenses.

The Department of General Services' (DGS) Procurement Division worked with Accenture to develop CAL-Buy. The e-procurement system connects buyers to a central search engine where they can shop for products in an electronic catalog, consolidates hundreds of pre-approved contracts and eliminates the need for suppliers to produce paper catalogs. The network also sends the completed order electronically to designated approvers within the organization, and then e-mails or faxes the approved purchase order to the supplier.

By consolidating state government purchases through CAL-Buy, the DGS estimates that California will save more than $30 million annually through improvements in contract and purchasing negotiations, and $10 million in annual process savings.

In September, CAL-Buy was identified by the National Association of State Chief Information Officers as a best practice in the use of IT in state government.

"CAL-Buy is, quite simply, a win-win for small business, for the state, and, most importantly, for California taxpayers," said Arun Baheti, California's director of eGovernment. "Not only do small businesses receive improved access to the government marketplace, but government gets more efficient -- saving tax dollars. For CAL-Buy to hit $25 million so quickly in just its first phase is an incredible accomplishment. It's clear now that California and other states will benefit from eProcurement."

The Department of the California Highway Patrol, the California Department of Transportation and the DGS participated in the initial launch of the system. The DGS plans to roll the system out to other state and local agencies in the future. By expanding the system to include local agencies and school districts, the DGS makes state-negotiated contracts more accessible to these varied public sector entities.