Maryland Steps Ahead On E-Procurement

By William Welsh, Staff WriterE-Maryland Marketplace, a high-profile state procurement Web site established by the state of Maryland, has moved from pilot program to full production and has begun registering vendors to do online business with state agencies.The Web site is the result of a partnership among Science Applications International Corp., KPMG Consulting LLC and Intelisys Electronic Commerce Inc. State officials describe E-Maryland Marketplace as capable of providing state agencies with a full spectrum of procurement activity from catalog purchases to competitive acquisitions.Maryland signed a three-year contract with three one-year renewal options for the online purchasing service. For E-Maryland Marketplace, KPMG Consulting of McLean, Va., provided the interactive bidding capability, Intelisys of New York provided the online catalog purchasing solutions, and San Diego-based SAIC constructed the vendor registration process. SAIC was the prime contractor and team leader on the project."E-Maryland Marketplace is the major [e-commerce] initiative coming out of Maryland," said Rishi Sood, principal analyst for state and local government with Dataquest, a research arm of the GartnerGroup, Stamford, Conn. He attributed the speed with which the state went from pilot program to multiyear contract to the strong support it received from Democratic Gov. Parris Glendening. Budget constraints and other various obstacles that might ordinarily delay a major project "become less pronounced when the governor is spearheading the initiative," Sood said. "We spent 90 days proving the concept that e-procurement can work in the state of Maryland," said Michael Skigen, E-Maryland Marketplace program manager for SAIC. "After the 90-day [pilot program], the state was comfortable that we proved the concept and that our technology could scale to meet the requirements of the entire state." At that point, the company was issued a contract to begin producing the system for use on a statewide basis, Skigen said.Although only two Maryland state agencies ? the Department of General Services and Department of Budget and Management ? use the online purchasing program right now, it will soon be rolled out to other state agencies, said Mark Krysiak, deputy director of procurement for the Department of General Services. "The eventual target is to have it for all state procurements," he said. The program is restricted to purchases of $25,000 or less so that those using the program will get accustomed to it before it becomes available for larger, more complex acquisitions with greater associated risks, said state officials. "The technology is not a hurdle at this point, but people must have confidence in the technology," said Krysiak, citing concerns about security and the need to maintain public trust on the government side, while vendor issues include bonding and insurance."The fact that we are only doing small procurements [on E-Maryland Marketplace] is a function of state law rather than our technology," said Skigen.While the Maryland contract is clearly SAIC's most significant e-procurement project, it is not the first. Previously, SAIC and Intelisys teamed on the Massachusetts E-Mall project, which at one time had upwards of eight other states participating in the electronic purchasing venture, according to an SAIC official. More recently, SAIC and Intelisys took procurement online to San Diego State University. More than 3,000 users will have access to the system and eventually so will students on campus. The California State University System will monitor the success of the program, and the companies are generally optimistic about future opportunities within the university system.One of SAIC's chief competitors in the state and local arena is AMS, which is aggressively marketing its buysense.com e-procurement Web site. Buysense is an AMS-hosted Web site built on top of Ariba Inc.'s network platform that users access by subscription. One of its main selling points is that it does not require software installation or internal support. Since Buysense is operated through an AMS-hosted Web site, it can be fully operational within 90 days. Earlier this year AMS signed its first Buysense contract with Arizona State University. ASU is expected to be up and running with Buysense by September, according to AMS. At press time, AMS was in the final stages of negotiations to sign its first state customer to Buysense. The interest that systems integrators are showing in the smaller entities such as public universities may be short-lived, however. "When it comes to state and local government information technology, the big players really only want [to do business with] the 50 states and the top 100 cities and counties," said Sood.As lessons learned from one e-procurement project are carried forward to the next, each system becomes more sophisticated and captures the attention of other public governments and institutions preparing to take their purchasing functions online, said Dave Berteau, senior vice president and operations manager for SAIC. "A lot of the states are watching to see what the success of the early 'arrivers' is in that regard," he said. "I am not sure that there is enough data in to declare anyone an unqualified success at this stage of the game from the point of view of volume of transactions and amount of business going through the systems."Over the next one to two years, the market will reveal which companies can establish efficient e-purchasing systems at the state and local level, said Tom Davies, an analyst with Current Analysis Inc., a market research firm in Sterling, Va. The question is whether vendors can reproduce them "across multiple jurisdictions in a highly dependable and reliable way," he said.With this said, Maryland shares the same mixture of blessings and curses with others states taking procurement activities online. While it can boast that it has been one of the first to take its procurement activities online, those who follow in its footsteps may be able to avoid any pitfalls that, for now at least, remain unknown.