Tenders set to move online

By ADAM GIFFORD

Electronic tender portal TenderLink has scored a marketing coup with local government, putting it well on track in its aim to become the gateway for all tenders called in New Zealand.

It has won the endorsement of Local Government Online (LGO), a company formed by the Society of Local Government Managers and the Association of Local Government Information Management.

LGO will encourage the country's 86 local authorities to move their business to the site.

In doing so, TenderLink has overcome the concerns of a body whose approach to online business is extremely cautious, as evidenced by its minimalist website, www.localgovt.co.nz/procure.

TenderLink chief executive Philip Brown said 64 per cent of tenders in New Zealand came from local government or Transit New Zealand.

"Councils generally advertise in national newspapers on Wednesday and Saturday, which we estimate costs them about $1.2 million a year. By going electronic, they can save that spend."

TenderLink, based in New Plymouth, does not charge organisations to post tenders. Suppliers pay an annual access fee.

Aggregating tenders from the local government sector will make the already-profitable site even more attractive to suppliers.

Mr Brown said TenderLink already had more than 2000 suppliers registered here and in Australia.

The company has been around since 1994, starting as a paper-based service for IT and telecommunications contracts, and expanding into areas like construction, civil engineering, research and transport at about the same time it made its first move on to the web.

The latest version of the TenderLink application, which allows users into the site to prepare documents electronically, was written in Jade by New Plymouth application developer Kinetix Group, which also hosts the service.

Hamilton City Council chief executive Tony Marryatt, the vice-president of the Society of Local Government Managers, said Hamilton intended to cease print advertising and post all its tenders electronically.

"The advice we have is we still have to print public notices of meetings and resource consents, but not tenders.

"Further down the track is electronic procurement. We lead a regional buyers group for councils in the Waikato and Bay of Plenty, so we're looking at getting a procurement policy for the whole region to make business easier and save money."

Local Government Online chairman Paddy Clifford, chief executive of Hurunui District Council in north Canterbury, said local government spent well over $1 billion a year.

A research paper prepared for LGO more than a year ago identified potential savings of at least $50 million a year through electronic procurement.

However, the report also scared off councils by estimating it would cost $5.5 million to build an e-procurement system servicing all councils, based on North American technologies in use at that time.

"It was unlikely we would be able to get the 86 local authorities to enter into that sort of commitment," Mr Clifford said.

Instead, LGO encouraged the formation of regional buying groups and more incremental steps, while it waited for someone else to create the marketplaces.

Henry Norcross, managing director of Auckland electronic procurement specialist e:\\volution, said the $5.5 million figure was unrealistic.

"We could build a system for all local government for about $1 million, plus $10,000 a month. We can add value with things like call centres, support and logistics."

He said local government was already well advanced on things like buying groups, but had yet to come to terms with what the internet offered.