Centralized government purchasing of goods and services is traditionally beset with problems. These systems struggle to ensure: purchasing quality goods and services in a cost effective manner, ensuring quality from the lowest bidder, providing effective and timely service to clients, carrying out effective contract and price agreement, and ensuring access and fair competition. Further, a government that veils its acquisition processes in order to protect itself from fraud may also be simultaneously protecting itself from reform and innovation. In order to ensure equity in the bidding process and to avoid charges of favoritism towards particular vendors, most jurisdictions have established very rigid, cost-intensive processes that make bidding time consuming and difficult for vendors. In all, the traditional system creates a lose-lose relationship between government and vendor.
In 1992, the State of Oregon responded to these problems and implemented the Vendor Information Program (VIP) to fundamentally change the way the State procures products, trade services, and public works by moving the primary responsibility for accessing bid information from the buyer (State) to the seller (vendor). The program's goals are to: increase competition through easier access; reduce obstacles to the bidding process; and procure better quality products and services at lower prices.
In order to achieve these goals, VIP created the first automated bid access system in the country. This access is provided by a database of all bid information that is relevant to business planning and bid preparation, including information about pricing and features of contracts--past and present. The database is then disseminated throughout the State by software developed especially for the program. Through a broad and effective implementation process, the system is available, via personal computer, to all interested businesses. Further, vendors without computer access can download the information at one of over 120 designated Procurement Centers or public libraries located throughout the State.
The results from the first year show the program is working to fulfill its ambitious goals. In 1992 alone, Oregon taxpayers saved $12.8 million on their annual purchases. More than 8,000 new vendors participated in the State's bidding and contracting processes. Many of these new vendors represented small- and medium-sized businesses. Overall, the increased participation resulted in an improved perception of the State by minority and other communities that were traditionally left behind in the bidding process. The state also saved 20 percent, or $60,000, of its annual budget for copying, paper, and mailing, as well as $500,000 in personnel costs.
Transparency and access, traditionally the cornerstone of any democratic entity, require free and public disclosure of information. Oregon has found a way to create new avenues of transparency and access with modern technology, resulting in significant savings and improvement of services for the taxpayer. This access has led to the creation of a more inclusive atmosphere for small, private companies to compete for state contracts. VIP has replaced a 30-year-old system of public purchasing with a less expensive, more transparent model.