The Commonwealth of Virginias eProcurement Tool

1

• The Commonwealth of Virginias eProcurement Tool

2
s Inception

• Plans to create eVA stemmed from the vision of
  former Governor James S. Gilmore III in Executive
  Order 65 issued on May 24, 2000, outlining an
  e-government initiative for the Commonwealth

3
What is ?

• eVA is a Government-to-Business (G2B) web-based
  procurement tool that applies the concept of
  eCommerce to state government procurement
• eVA is a statewide initiative intended to empower
  Virginia agencies and higher-education
  institutions leveraging the power of the Internet
  to
• Perform more efficient and cost-effective
  purchasing
• Enable these organizations to purchase goods and
  services electronically
• Integrate all aspects of electronic procurement
  from requisition to order, to receiving, and
  finally to payment

4
American Management Systems (AMS)

• Through a competitive procurement process the
  Commonwealth selected AMS as a partner to design,
  implement, and host eVA
• AMS integrates hardware and software from partner
  vendors in addition to providing ongoing support
  and training.
• AMS was charged with providing the eVA
  functionality in 3 phases beginning March 1,
  2001, with the core features and completing by
  December 1, 2001, with advanced capabilities.

5
The Vision For

• eVA is marketed as a single automated system
  capable of establishing standards with a
  technology that accommodates the specific
  business needs of individual agencies, including
  existing ERP systems, and brings the benefits of
  a common tool and database for state and local
  government entities throughout the Commonwealth

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Fees

• Under contract terms, the Commonwealth pays no
  up-front costs to AMS and no governmental agency
  pays any fees to access eVA
• eVA is funded by fees charged to participating
  vendors
• To join eVA, vendors select from a Basic Service
  _at_ 25/year, or a Premium Service _at_ 200/year
• In addition, vendors pay a 1 transaction fee for
  all orders received through eVA. This fee is
  capped at 500 for each order and/or change order
• Orders placed with vendors not registered with
  eVA are subject to the 1 transaction fee. If
  the vendor refuses to pay or fails to pay the
  fee, the fee is billed to the agency/locality
• State settles up with AMS at the end of fiscal
  year
• Optional services such as real-time integration
  with existing systems, complex interfaces,
  reengineering business processes, or specialized
  training are available to both entities and
  vendors from AMS at time and materials rates

7
Mandates to Use

• On May 16, 2002, Governor Mark R. Warners Chief
  of Staff, William H. Leighty, issued a memorandum
  directing each Executive Branch agency and
  institution of higher education to use eVA to the
  fullest extent possible

8
Facts

• The 11/03 publication of INPUT/Output, a market
  intelligence resource for companies doing
  business with government, noted
• In 2000, the estimated value of the AMS eVA
  contract was 25 million over 5 years
• As of 11/03, eVA recognized 1.08 billion in
  revenue since its creation

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s Struggles

• The 11/03 INPUT/Output article went on to report
• Government officials and industry experts
  initially believed inherent efficiencies built
  into the system would accelerate acceptance and
  utilization.
• However, eVA is encountering resistance from both
  state agencies and suppliers
• AMSs costs are absorbed by participating
  suppliers and erode the suppliers profitability
• The end result is that many suppliers increase
  the cost of goods/services provided via eVA
  thereby passing the cost onto eVA system users

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Observations of Users

• System is slow
• System is not user friendly
• Users are kicked out of the system if process
  is not completed within allocated time frame -
  results in loss of data and duplication of effort
• Lengthy processing time to generate PO 15
  steps
• Vendor opposition as they must pay to register
  and again to receive orders

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Observations of Users (cont)

• Increased cost to purchase goods/services
• Renewing existing contracts, contractors
  typically request the allowed price increase and
  also request an additional 1 to cover the eVA
  fee
• When submitting bids, vendors frequently submit a
  higher bid to include the 1 fee
• If the vendor refuses to pay the 1 fee, the
  agency is required to make the payment
• Agencies are either required to purchase
  interface development/support services or perform
  dual data entry to update financial system data
• AMS hosts eVA as an Application Service Provider
  (ASP) software solution. As a result, agencies
  cannot access data for reports and are restricted
  to standard reporting options
• Electronic invoicing slated for Phase II
  completion 12/01/01is not yet available

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Statistics as of 10/28/04

• 409,330 Orders
• 4.1 Billion Spend
• 5 Million Items
• 965 Catalogs
• 171 Agencies
• 440 Localities
• 22,822 Vendors
• 9,121 Users

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and NNPS

• NNPS received no response to requests for eVA
  access to conduct a small scale market survey
• Pricing obtained by NNPS is typically better than
  pricing offered on state contract
• NNPS is a large school division with volume
  purchasing power
• Vendors typically include costs for state-wide
  delivery in state contract prices
• In order to track and update financial data
  associated with procurement, it would be
  necessary for NNPS to either purchase interface
  development/support services or perform duplicate
  procurement transaction data entry

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Potential Cost Increase to NNPS
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Questions