Lowering Costs Via Computerized Bid Services

by Stanley Newman

Some school districts are getting creative in a cost center where they can cut expenses painlessly—the purchase of goods and services.

They aren’t buying less or lowering standards. Instead, they’re buying smarter by extending their bidding process to gain more exposure for their bid requests.

These districts have moved beyond newspaper advertising, contract reporter publications, and the mailing of bid documents to a few known vendors. They are turning to the Internet, electronic bulletin boards, and increasingly to computerized bid information services to help them reach a broader range of bidders for everything from playground equipment to computers and from janitorial services to frozen foods.

Twenty states run on-line bid systems, with new ones expected in other states imminently. A handful of school districts in San Diego County, Fairfax County, Va., and other locations also are taking to the World Wide Web to post their bid opportunities. Some of the early pioneers of competitive bidding via electronic bulletin boards, notably Oregon state government and Los Angeles County, found they could save up to 8 percent on the costs of goods and services.

Of all the options, using a computerized bid information service is the most efficient. Bid information services let school districts take advantage of new technology without requiring them to purchase hardware, update software or micro-manage the bid distribution process. The services ensure that requests for bids get into the hands of the appropriate vendors quickly.

Matching Process

How does a bid information service work?

Every day, our service receives hundreds of Invitations to Bid (ITBs), Requests for Quotes (RFQs), and Requests for Proposals (RFPs) from thousands of state and local government agencies and other sources. The information is entered into computers where sophisticated software matches needs with qualified vendors (service subscribers) capable of meeting those needs. Overnight, the computers provide the vendors with bid summaries that match their product or service profile.

Vendors interested in submitting bids contact the service. Full bid documents are dispatched immediately by e-mail, fax, or courier.

The objective of using a bid information service is to obtain maximum exposure for the bid requests to qualified vendors.

Some school districts worry about receiving low bids from vendors that may be hundreds or thousands of miles away. That objection should not be addressed by restricting the distribution of bid requests, but rather by careful attention to the writing of ITBs, RFQs and RFPs. The specifications should require adequate performance guarantees and stipulate that service, repair, or replacement be accomplished within a specified time by the vendor or a qualified agent.

Alleviating Burdens

How does one select a bid distribution service?

A number of bid distribution services are available. To ensure you obtain the exposure and service you need, ask the following questions:

* What kind of distribution can we expect?

You want to guarantee your bid requests are going to serious, qualified vendors. The service should be able to demonstrate the quality of its list by identifying some subscribers.

* What services does the bid distribution service provide?

Find out if the service has a bid specifications library that you can use without charge, if it will assist you in locating vendors for that occasional "oddball" request, if it will maintain for you a historical file of all your bid requests on compact disk. All of these services can help your overworked purchasing department be more efficient.

* Will the school district incur any direct or indirect costs?

No fees should be charged to you for distributing bids to vendors subscribing to the service. The better services even accept your bid information via a toll-free fax number or e-mail so the cost of getting your documents to the service is insignificant. If you request that notices and bid documents be sent to specific vendors, you may have to pay a modest handling charge.

* What about references?

The bid distribution service should provide you with the names of government purchasing agencies that use its services. You have a winner if the agencies answer the way Denise Billy, purchasing agent for the Tuba City, Ariz., Unified School District, did. With a budget of about $12 million, the district regularly seeks bids for office supplies, janitorial services, and equipment. Nationwide distribution of its bids through a computerized bid information service, Billy says, "allows us to receive more competitive prices."

Stanley Newman, president, BidNet, Albany, N.Y. BidNet, a division of International Data Base Corp., is the largest nationwide bid information service.