On-line shopping centre opens

29 Mar 01
The Improvement and Development Agency (Idea) has signed a ground-breaking deal to provide an e-procurement portal that could create one of the 'largest marketplaces in Europe'.

30 March 2001

Idea Marketplace will act as an on-line shopping centre for all English and Welsh local authorities. By pooling procurement and offering 'best buys', the system is expected to wipe around 15% – or £4bn – off the annual £27.5bn spent on goods and services.

There was stiff competition to run the portal, with 50 companies from around the globe forming 16 consortiums to bid for the contract. The successful team, led by Canadian company MacDonald Dettwiler and management consultancy Hays, will fully fund the set-up and running costs of the portal, expected to be around £15m a year. The consortium, which also includes Barclaycard, will recoup its costs through a 1.5% transaction fee for each local authority.

Around 70 councils have already applied to pilot Marketplace, which is expected to go live this summer and roll out nationally early next year.

With local authorities spending £96m a day on goods, services and transactions, Idea expects it to become one of the largest 'marketplaces in Europe'.

Local authorities will also be a step ahead of their Whitehall colleagues, who are still grappling with targets to get 90% of procurement on-line by the end of this year. The Office of Government Commerce, overseeing Whitehall's e-procurement, is understood to be keeping a close eye on the project, which could potentially be used by central departments.

Gary Richardson, director of business development at the Idea and inventor of Marketplace, told Public Finance that the system would place the UK at the forefront of e-procurement.

He added that the scheme would be fully integrated into all local authorities' financial systems, as part of the £15m deal.

'The only costs to councils will be the 1.5% transaction fee,' he said. 'And that will be included in the overall savings through aggregated purchasing.'

Marketplace is designed to offer a complete electronic purchasing service, which allows councils to tailor their buying to local needs and to fully track and audit goods from start to finish.


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