Elizabethton becomes first city with e-procurement system

By Thomas Wilson

STAR STAFF
twilson@starhq.com

   Elizabethton is the first municipal city government in Tennessee to explore an electronic procurement system created by a Johnson City-based company as an option in their purchasing department.
   "We are looking at it strictly as an option," said Gene Deloach, the city's Director of Purchasing. "It is an option or a tool to use in getting the best possible price."
   Govbuying.com is a web-based application of electronic procurement used by the public sector to purchase goods and services through vendors who submit bids on quotes.
   Elizabethton City Council voted 6-0 at Thursday's council meeting to permit city officials to pursue the Govbuying.com program as an option for purchasing products.
   "We appreciate the effort they put into it," said Terry Newbegin, chairman of Newbegin Enterprises, Inc. (NEI). "It shows their courage in technology."
   The application was created by NEI's sister company, International iCommerce Solutions, to give public entities the option to purchase items from vendors through the Internet.
   "If we need a price, we put a quote out on the line," said Deloach, "The various vendors come back and give us a quote and we look for the lowest responsible quote."
   Purchases the city of Elizabethton makes on items over $5,000 are required to go through the sealed bid process.
   Suppliers register with the system to offer their products of services to parts, Newbegin said. Participating in the Govbuying.com system comes without the city acquiring fees or costs, or needing to purchase software.
   Deloach said the city had not, as of Tuesday, signed any contract with NEI to engage in the purchasing system. The city would continue to use the traditional bid solicitation and selection process currently in place in addition to e-procurement, he said.
   Newbegin explained that the genesis of e-procurement began around 1996 when the U.S. military was looking for a better way to do business in purchasing. At that time, government-operated parts stores were located on military bases with inventory and personnel.
   His company pitched the Pentagon brass their concept of the NEI 2000 -- an electronic procurement application to bring multiple buyers to one seller.
   "The military gave us August of 1996," said Newbegin, who has over 30 years of experience in governmental procurement. "By mid-October, we had the NEI 2000 developed and on the Web."
   The Pentagon initially set up the program at three military bases, including one in Japan. That number grew to almost 400 bases in a couple of years, said Newbegin.
   "We got together and said 'hey this will work in the public sector,'" he said.
   Thus, Newbegin and fellow NEI execs John Shackleford and Vern Abla developed the NEI 2010 designed to handle procurement for multiple buyers and sellers. The company moved from Pennsylvania to Johnson City just over two years ago and began work on a procurement program for the public sector.
   Newbegin said the company had been in talks with the city of Johnson City and East Tennessee State University among other public sector institutions. He added that the Tennessee Municipal League, among other municipal organizations, had shown strong interest in e-procurement.
   Deloach said locating vendors to bid certain hard-to-find parts and equipment, particularly in the department of public works, sometimes proved challenging. The application's Internet forum could give the city a broader range of vendors to supply dated or specialized items while saving time for purchasing operations, he added.
   "You spend a lot of time trying to run down a source," said Deloach. "We may have to go to Knoxville or Chattanooga to get some items."