Minnesota Signs MaterialNet for Procurement System

MaterialNet Inc. has signed a contract with Minnesota for the company's electronic procurement management system, the company announced Sept. 19.

Company officials declined to disclose the value of the contract. MaterialNet's Custom Procurement Management System will serve as the platform for reverse auction purchasing under an initiative launched June 29 by the Minnesota Department of Administration.

A reverse auction is where vendors bid increasingly lower prices as they compete to become the government's supplier of a particular item.

The use of the e-procurement system is expected to reduce the costs of purchasing activities and of goods and services for Minnesota.

In Minnesota's first reverse auction for aluminum substrate, the state saved $175,000 over five years. Minnesota uses 500,000 pounds of aluminum annually to make license plates.

MaterialNet's e-procurement solution can generate material cost savings ranging from 5 percent to 30 percent across the procurement of direct and indirect materials, goods and services, said company officials.

MaterialNet of Lake Success, N.Y. is a software development company that provides strategic e-procurement solutions to private-sector organizations and government agencies. The company, which has regional offices in Atlanta and Boston, has about 45 employees.