Online buying

By Richard W. WalkerGCN StaffIs the time right for online procurement? You bet.Marvin Griffin, chief information officer of the Air Force's Commercial Information Technology'Product Area Directorate, in Montgomery, Ala., put it this way: 'We're dealing with a generation of point-and-click soldiers now. They want to point and click and buy a product.'That's easier said than done. Maintaining a comprehensive, up-to-date, interactive electronic marketplace is a daunting task, as those who work behind all those Web-friendly interfaces will tell you. But that isn't stopping a growing number of government and commercial sites from working to meet the demand and grab a share of the online market.Griffin runs the Air Force IT Superstore, an online marketplace launched earlier this year that offers more than 120,000 products. Griffin has said he expects online purchasing to eventually become the preferred buying method for the more than $500 million in purchases CIT-PAD handles each year.Another case in point: GSA Advantage, an online store operated by the General Services Administration's Federal Supply Service and the granddaddy of federal procurement sites, has seen a stunning increase in sales since it was launched in 1996.In its first year of operation, GSA Advantage tallied $5.7 million in sales. Last year, the site took in $86 million. That's an increase of more than 1,400 percent over four years.This year, offering more than 1 million products, GSA Advantage's sales will likely top $125 million.Al Iagnemmo, GSA Advantage program manager and director of FSS' newly created E-Business Division, anticipates similarly dramatic growth over the next few years.'We think it will grow to a half-billion dollars next year,' he said, adding that the site's yearly sales could reach $1 billion down the road.It's little wonder that Web sites for government buyers are proliferating. For starters, there are , , and 'the list goes on.New players are coming into the market seeking fresh niches and ways to distinguish themselves from competitors.Most online marketplaces for government users take a catalog shopping approach, containing broad selections of products and a variety of government contracts. They offer search options from product type and part number to contract vehicle and price range. And most aim for comparatively small buys that can be made with government purchase cards.But even in these nascent stages of online procurement, new twists rise to the surface.One new player is FedBid.com, a division of Procurement Technologies Inc. of Germantown, Md., whose site, at , promises to offer a reverse-auction system when it is launched later this month. 'We're not a traditional catalog site,' said Philip Fuster, president and chief executive officer of FedBid. 'Our site is very buyer driven.'In developing the site, FedBid officials interviewed federal procurement specialists to find out what they need from an online site. They came up with a site designed entirely for open-market, credit card purchases for government buyers working under federal procurement rules.Using FedBid, buyers can research products, define the parameters of the bid and then let vendors compete for the sale.Once buyers have reviewed offers from competing vendors, they can accept an offer, make the purchase, monitor delivery and track purchase history. FedBid also allows other agencies to aggregate quantities.Online players may pursue different approaches and marketing strategies, but they have one thing in common. They all see enormous potential in the marketplace for federal online procurement.'I see a huge movement toward online buying,' Fuster said, noting that the federal government represents a $30 billion to $40 billion market.At present, however, online sales are still a sliver of overall government purchases.Even GSA Advantage's sales, which looks substantial in raw dollars, represents just 1.5 percent of the Federal Supply Service's total annual sales.State of procurementThere is a more sobering aspect to the current state of online procurement. Most of the sites available to government buyers are far from state-of-the-art. Or, perhaps online purchasing in general still isn't up to snuff with what government buyers really need.'I'm glad I don't have to buy things every day' on the Web, said Jack Braun, a contract cost specialist for GSA's Federal Technology Service.Braun made that comment after spending several frustrating hours in a GCN conference room appraising a sampling of online marketplaces targeted for government buyers.'He was one of four procurement specialists and one Web consultant GCN enlisted to evaluate the sites.The GCN team encountered technical bugs, deficient search and help functions, inadequate technical data and, except for the Air Force IT Superstore and GSA Advantage, difficulty in comparing products and prices'a crucial factor for federal buyers. They also had difficulty with extensive registration processes and delays. 'I couldn't have bought a computer today,' said Chip Mather, senior vice president of Acquisition Solutions Inc. of Chantilly, Va., and a former Air Force procurement executive, after spending about four hours surfing the sites. 'I would not have been comfortable buying anything. There's not enough comparison or product selection, and [the sites] were difficult to use. The sites aren't taking it from a buyer's perspective.'For pure ease of use, major commercial sites, such as and , still have a big edge, the GCN evaluators agreed.What would the ideal site offer?'I should be able to go in there, pop up three vendors, like Dell Computer Corp., Compaq Computer Corp. and Gateway Inc., and have the product offerings come up,' Mather said. 'I want a search engine that finds every model, searches on the price and sorts it out for me so it gives the lowest price to highest price for that model and puts the prices side by side. That's what I need.'Tiffany Hixson, a contracting officer at the Commerce Department, found that most sites she looked at weren't geared toward helping federal buyers meet procurement regulations. 'With the exception of GSA Advantage, they don't identify whether the contractor is a small business or not,' she said. 'That's really a big deal.'One site Hixson had trouble getting into, FedCenter.com, does allow users to specify 8(a), small, minority-owned or women-owned businesses in its search criteria.