US takes lead with procurement hub

13 Jul 00
The world's first web-based procurement system for the public sector has been launched in the US, just one week after the UK government abandoned similar plans for departments in Whitehall.

14 July 2000

The system joins up electronic procurement and payment systems for US states and local governments. It is funded by the Banc of America, the investment arm of the Bank of America, the largest bank in the US.

The Banc of America Purchase Street will allow state and local governments to order on-line, request quotes, process transactions, initiate payments and reconcile transactions.

Customers will access and automate their procurement processes through a secure Internet connection. Government agencies will also be able to personalise their services to include preferred suppliers, contract requirements and other conditions through the browser-based catalogue.

Confirmed customers so far include the Houston-Galveston Area Council of Governments, whose

co-operative purchasing programme represents 1,100 local governments and buys more than $150m worth of equipment annually, including cars, construction vehicles and radios.

The system builds on an existing system of state government purchase cards, of which the Bank of America is already the leading issuer, with more than a quarter of the states as clients.

The bank claims the new system will not just cut procurement transaction costs, but will integrate bill payments into the same process, cutting supplier costs and enabling prices to be reduced. It also offers customers the opportunity to run sophisticated cash management systems.

'It will drastically improve the vendor payment cycle, providing valuable reporting capabilities to both buyer and seller and reconcile financial data in a fraction of the time of the existing business process,' claimed Rob Main, president of NIC Commerce, BoA's partner in the project and a specialist in public sector procurement.

Peter Gershon, chief executive of the UK's Office of Government Commerce, told Public Finance two weeks ago that the British government has no immediate plans to set up an electronic hub for public sector procurement of the kind that has been developed in several industries.


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