Report Finds More States Using E-procurement

ARLINGTON, Va. -- More state governments than ever before are using e-procurement to achieve better, more cost-efficient systems for the acquisition of products and services, according to a new grant report from the PricewaterhouseCoopers Endowment for The Business of Government.

"E-procurement techniques, such as electronic ordering, purchasing cards and reverse auctions, show the enormous potential of e-government at the state level," said Paul Lawrence, co-chair of the Endowment Advisory Board and a PwC Consulting partner. "States are learning how to use these tools to save millions of dollars. They are discovering that technology can help government both enhance the delivery of services to the public and lower its administrative costs."

Several states are successfully carrying out e-procurement initiatives, according to the report. Maryland is moving $6 billion worth of annual state purchasing online, while Virginia's "eVA" initiative includes electronic receiving and invoicing as well as reverse auctions.

E-procurement offers states potential improvements in how they manage acquisitions and purchases but it also presents some challenges to overcome, the report said. Some states have struggled with the technical complexity of e-procurement, as well as its initial developmental and operating costs, standardization and legal issues.

The report recommends ways for states to promote and sustain e-procurement practices in the face of challenges, including:

- Assessing funding alternatives for e-procurement systems
- Providing technical training for procurement officers
- Pursuing standardization and interoperability for e-procurement systems
- Promoting vertical and horizontal e-procurement market integration
- Instituting accountability mechanisms
- Developing a legal framework for digital signature and Internet-based bidding procedures
- Developing statewide e-procurement policies and procedures
- Promoting better and more strategic relationships with vendors and application service providers

"Right now, e-procurement is a promising alternative rather than an instant panacea," said M. Jae Moon, author of the study and an assistant professor at the George Bush School of Government Affairs and Public Service at Texas A&M University. "States should focus on resolving the challenges they face in this area in order to sustain e-procurement as an initiative and obtain the prospective benefits and utilities it can provide."

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