Online market set to go

FedBid.com, which combines online credit card purchasing and auction

technology to give agencies a new way to make small purchases, opens for

business today.

On FedBid.com's Web site, government buyers can solicit bids on proposed

purchases of less than $25,000, the standard monthly limit for government credit

cards. Agencies also can aggregate their purchases to get even better prices.

Initially, FedBid.com will focus on open-market credit card purchases

of information technology commodities, although that focus should expand

as the Germantown, Md.-based company grows and matures, said Phillip Fuster,

chief executive officer and president.

Fedbid.com originally planned to have a few hundred preregistered users

for the launch, but the company has preregistered more than 7,000 users,

Fuster said.

"The service will be live [today] for our early adopters, which include

23 different federal departments," he said. The company expects to have

more vendors and users participating in a couple of weeks.

The site features related government and industry news from four sources,

including Federal Computer Week. The company will add even more detailed

buying strategies in the future, including data on buying patterns, so agencies

can determine the best times to ask for bids.

The entire system is browser-based, so users do not have to download

any software. FedBid.com secures transactions using 128-bit encryption.

Industry analysts have mixed reactions to FedBid.com's business approach.

"We're kind of on two minds on their service," said Larry Allen, executive

director of the Coalition for Government Procurement. "It looks like a good,

solid system, and they've covered all the bases they need to. It could be

a viable business method, and it has some technical merits and good business

potential. That's the upside."

But, Allen said, although Fedbid.com has a best-value component, it

is really driven by price, which could scare off vendors. "This type of

system might get a tepid response from the contractor community. There's

a best-value mechanism on it, but I'm not sure how often federal buyers

are going to use it," he said.