Dot.com No-Brainer

Most business-to-government dot.coms have an uphill climb because many of them are unfamiliar with the federal market and their products are new and unproven to federal buyers. But there is one sector of federal buying and selling that cries out for dot.com deliverance: government-to-business (G2B) and government-to-consumer (G2C) auctions. Each year, the federal government must fairly and cost-effectively sell to the public more than $10 billion in assets. While many of those sales have moved out of crummy warehouses and onto the Internet, the sales systems, methods of naming items and technology used by different agencies make it difficult to locate and purchase items.

"There is an enormous market for used government equipment in the Third World," says Steven Kelman, former administrator of the Office of Procurement Policy and Weatherhead professor of public management at Harvard University's John F. Kennedy School of Government. "For example, for Veterans Affairs hospitals' CAT scans of a certain age there is no U.S. market, but there is in the Third World." Kelman sits on the board of a G2B auction firm that will focus on sales to countries such as Argentina, Thailand, South Africa and Nigeria.

FinanceNet, an Internet communications tool for intergovernmental organizations, was charged by Vice President Al Gore with becoming a one-stop shop for information and sale of surplus government property. FinanceNet recently formed a 120-member interagency government asset sales team (IGAST) to develop an Internet-based clearinghouse of assets based on a universal dictionary to house all agencies' surplus inventories. IGAST has received presentations from private firms and is working with CommerceNet, an e-commerce industry group, on developing the clearinghouse, tentatively named Auctions@YourDisposal.

Meanwhile, private sector firms already are moving into the market. Bid4Assets.com is focusing on the 17 agencies that sell seized, distressed and surplus assets each year. "For distressed, discounted, as-is, where-is assets, there is traditionally only a certain type of buyer that will roll the dice," says Dave Marchick, Bid4Assets vice president for strategic development. "We're broadening the exposure and bringing in new buyers."

In January, Bid4Assets conducted the U.S. Marshals Service's first online auction, selling five seized promissory notes with a face value of over $500,000. Other agencies are planning pilot sales, as well. Bid4Assets was the first G2B auction dot.com on the GSA schedule.

Last year, the General Services Administration sold surplus property worth more than $260 million by placing newspaper ads and renting auction space. In May, the agency struck a deal with American Management Systems and auction software-maker Ariba to conduct those sales online. The new site, GSAAuctions.gov, will allow buyers to participate no matter where they, or the surplus goods, are located. "The Internet maximizes our selling advantage by broadening the community of potential buyers,streamlining the business processes and lowering our costs," says Ed O'Hare, chief information officer of GSA's Federal Supply Service.