With all the other services offered online, I have often wondered why no one is offering a procurement bidding system. Perhaps there are such an assortment of laws from state to state it is too expensive. But if Google can navigate China’s laws and politics to give away its service for free, there has to be some money to be made.
Since I am ultimately talking about a benefit for the arts community, I would be happy to a service specifically tailored to help the industry developed. Baumol’s cost disease may say technological advances can’t reduce the number of people needed to play Beethoven, but that doesn’t mean we can’t save on our purchases of gaffers tape!
The service I am referring to is something similar to what I use at work. As a state employee, I have to get competitive bids for any goods or services above a certain dollar threshold. We use an online solicitation system which runs the bidding process for us. Even if we know something is going to fall far below the mandatory use threshold, we will use the service if we think we can get a better price somewhere.
Vendors sign up to be alerted when bid requests in certain broad subject areas are posted and then if they are awarded the bid, they pay a percentage of the price and that is what keeps the system running. The percentage on our system is 1/2% which is very competitive with other states. There are some basic bells and whistles for vendors too in terms of tracking and historical reporting. What I like best is that it exports all the salient details of the winning bid to a purchase order.
The two big complicating factors for my department as part of a state entity is 1) Necessity to accept the lowest bid or fill out copious paperwork explaining why you hadn’t and 2) Being VERY specific with your bid details lest the lowest bidder not have a feature you assumed would be included.
Making the requesters stick to these conditions in an open market setting would be difficult. But it would also not be any different than how things work right now. Private citizens and companies throw business to their favorite vendors all the time even if they aren’t the cheapest option. There are also plenty of sales personnel who invest a lot of time and energy meeting someone’s specifications only to have customers go elsewhere or be lured away by a competitor who convinces them they really want a feature they offer.
One of the reasons I suggest this is because there are often times that the difference in bids is significant. Some times so significant that we wonder if the lowest bidder got the stuff off the back of a truck somewhere. Other times, the margin is much closer, but frequency of purchasing makes the savings add up. The benefit to us is that the reach of our bid requests are much further than had we called around locally for competing bids. Even though we have to wait about a week to allow everyone time to bid, we save all the time we would have spent searching catalogs or the internet or calling around to find the best price.
There is a chicken and egg element to this which is why if someone set this up to service the arts and culture industry, it would probably have to be on a national scale. Arts organizations won’t sign up and use it unless there are a lot of vendors on it and vendors won’t bother with it unless there is a big customer base. Its existence would have to be widely advertised outside the theatrical supply and services sector. There are probably a number of companies who don’t think of themselves as serving the arts and won’t sign up. But of our best deals have come from companies who don’t cater to theatres.
If anyone knows of a service like this that the general public can use, I would be interested in learning more about it. If there isn’t anything like this but there are a lot of people interested in some sort of service, maybe Drew McManus will take the project on after his Venture Project software is launched.