eProcurement System Benefits Small Businesses, Facilitating Purchases by State of California
SACRAMENTO, Calif.; April 9, 2002 – In its first year of operation, over 1,200 purchases totaling more than $25 million have been made by California state government buyers via CAL-Buy, an innovative eProcurement system developed with assistance from Accenture. Purchases via CAL-Buy include everything from police cars and flour to office equipment and school buses.
With nearly 50 percent of these purchases made from California certified small businesses, the small business community is a prime beneficiary of these eProcurement capabilities.
The system, launched in March 2001, was expanded last June to give government buyers electronic access to more than 6,000 products sold by 290 suppliers, a fourth of which are small businesses.
“We are extraordinarily pleased with CAL-Buy’s success. Consistent with the Governor’s desire for the state to support California’s small business community, CAL-Buy helps state agency buyers identify goods from small business and meet the needs of the Governor’s Executive Order D-37-01,” said Audrey Harrell, an Accenture Government partner. “At the same time, the cross-agency standard electronic forms built into CAL-Buy and options for receiving purchase orders by e-mail or automated fax help streamline California government transactions for small businesses.”
With CAL-Buy, all suppliers, including small businesses:
Receive orders that take minutes via e-mail or automatic fax, rather than the days it takes to receive a purchase order through the mail; Have their commodity catalogs available online in a searchable format, accessible via the internet; Are credited with providing the catalog items, since their items are flagged as small business commodities; Receive more accurate, consistent, and timely orders; and Reach a broader buyer base without the need for typical marketing expenses.
Accenture developed CAL-Buy for the Department of General Services (DGS) Procurement Division. The system automates the state’s order and approval process, making the procurement cycle more cost effective and less time consuming than the traditional paper-based system. In doing so, CAL-Buy connects buyers to a central search engine where they can shop for products in an electronic catalog, consolidating hundreds of pre-approved contracts and eliminating the need for suppliers to produce paper catalogs. The network also sends the completed order electronically to designated approvers within the organization, and then emails or faxes the approved purchase order to the supplier.
By consolidating California’s government purchases through CAL-Buy, DGS estimates the State will save more than $30 million annually through improvements in contract and purchasing negotiations, and $10 million in annual process savings. This kind of savings – driven by efficiencies through investments in information technology – will become increasingly important as the State faces declining revenues in a slowing economy.
In September, CAL-Buy was identified by the National Association of State Information Officers as a best practice in the use of information technology in state government, and is being recognized this week by the association at a dinner in Colorado. The program was one of nine recognized across the United States. CAL-Buy’s award was presented in the Digital Government category for being an innovative program that uses the Internet to provide information to and conduct transactions with citizens and businesses.
“CAL-Buy is, quite simply, a win-win – for small business, for the state, and, most importantly, for California taxpayers,” said Arun Baheti, director of eGovernment for the State of California. “Not only do small businesses receive improved access to the government marketplace, but government gets more efficient – saving tax dollars. For CAL-Buy to hit $25 million so quickly in just its first phase is an incredible accomplishment. Its clear now that California and other states will benefit from eProcurement.”
The Department of the California Highway Patrol, California Department of Transportation and the DGS participated in the initial launch of the system. DGS plans to roll the system out to other state and local agencies in the future. By expanding the system to include local agencies and school districts, DGS makes state-negotiated contracts more accessible to these varied public sector entities.
Accenture is the world’s leading management consulting and technology services organization. Through its network of businesses approach — in which the company enhances its consulting and outsourcing expertise through alliances, affiliated companies and other capabilities — Accenture delivers innovations that help clients across all industries quickly realize their visions. With more than 75,000 people in 47 countries, the company generated net revenues of $11.44 billion for the fiscal year ended August 31, 2001. Its home page is www.accenture.com.