Government supply deals getting tighter

By ADAM GIFFORD

Professional Service Brokers is close to reaching a deal on how its GSB Supplycorp and SupplyNet subsidiaries will work in with the GoProcure Government electronic procurement project.

"Their content will be on the GoProcure site," said GoProcure project head Greg Nicholls.

PSB chief executive Carl Mitchell-Turner, head of SupplyNet, said the conditional deal struck on Friday acknowledged the fact that most of the Government agencies targeted by GoProcure were already customers of GSB Supplycorp, which grew out of the privatisation more than a decade ago of the Government Stores Board.

"We assist, co-ordinate and manage between $350 million and $400 million of contracts in the Government sector," Mitchell-Turner said.

The State Services Commission's e-government unit estimates state agencies spend about $1.25 billion a year on non-specialised goods and services.

SupplyNet is what Mitchell-Turner calls a "procurement service provider" built around Commerce One MarketSite software.

PSB's accounts for the year to June 2001 show that it spent $7.5 million setting up SupplyNet.

That is the same amount the Government intends to pay consulting firm Cap Gemini Ernst & Young over the next five year for GoProcure, which is being built using marketplace technology from Oracle.

The consortium that included SupplyNet failed to make the shortlist.

Mitchell-Turner said the e-government unit had made it clear the GoProcure project was an aggregated purchase of an electronic procurement application, rather than recreating a central Government buying organisation, so it would not be in direct competition with GSB Supplycorp.

"We are a supplier to this market. The people this tender is issued for are our suppliers and customers so we will end up working with them to use GoProcure, if that is what they want to do."

He said that for similar reasons the PSB group would also talk to the consortium creating a buying portal for Local Government New Zealand, using a BNZ Edis system.

SupplyNet has put much of its efforts into helping suppliers put their catalogues into the system.

"We have 512,000 lines of content transactable and ready."

Mitchell-Turner said about GSB customers would not be eligible to join GoProcure, but could share the benefits through SupplyNet.

Nicholls said GoProcure was in its pilot phase, which involved talking to Government departments and determining which ones would come on board.

Two of the biggest Government spenders, police and Defence forces, have already indicated they will use their own systems rather than GoProcure. "We will report to the Cabinet in September and go live on October 1," Nicholls said.

Departments will be charged between $30,000 and $150,000 a year to use GoProcure, depending on the volume of transactions they expect to put through the system.

Nicholls said the unit had still to set prices for smaller customers.

SupplyNet