Virginia leads in online state buying

eVA, Virginia's online procurement system

Launched more than two years ago, Virginia's statewide e-procurement system (eVA) has now surpassed the $1 billion milestone in sales since inception, leading other state government's procurement platforms, according to officials.

"The sheer number of transactions that come through eVA is far greater than any other system on the state level we are aware of," said Caroline Rapking, vice president of American Management Systems Inc.'s state and local division, referring to the system.

Under a five-year contract, the company, which built the Web-based system in early 2001 without state funds, is recouping its investment through registration and transaction fees imposed on vendors, who can either pay a basic $25 annual registration fee that permits them to post an electronic catalog or a premium $200 annual fee that allows them to receive and submit online bids.

The total sales so far represent about 155,000 orders. More than 400 state and local agencies and other public sector groups can choose from more than 4 million products, ranging from office supplies to maintenance services, supplied by 13,000 vendors. Later this year, construction, telecommunications and other services will be added.

Part of the system's appeal, said Rapking, is that smaller vendors can compete statewide for orders. For example, she said a local southwest Virginia office supply vendor said he was limited to orders in his region. But after putting his catalog on eVA, he began getting orders from other parts of Virginia, she said.

State agencies also find they could shop more easily online rather than rifle through paper catalogs, and online they can buy at reduced prices and increase their efficiency, Rapking said. When eVA was first launched, state agency participation was voluntary, but its usage was lower than expected. So several months later, the government mandated its agencies use the system, officials had previously said.

Any new system takes some time to use, but increased familiarity and word-of-mouth helped propel eVA's usage, Rapking said. Current usage statistics even surpassed what company and government officials expected, she said.

As an added incentive to vendors, the commonwealth suspended transaction fees on all orders for one year, a hiatus that ended July 1. Rapking said this was a way to give vendors a chance to reprice their goods and re-establish their catalogs to account for the fees. Vendors pay one percent of the value of a transaction order, which is capped at $500.

The commonwealth undertook a large marketing campaign to remind vendors the fee was going to be reinstated in the summer, she said, adding the spend trend has remained consistent since July 1.

While e-procurement exists in several states to varying degrees, few have statewide systems because they were expensive and complicated to implement. However, several other states have inquired about Virginia's system, Rapking said.