Online Auctions with Vendors Bidding on Contracts Among E-Commerce Applications Students Propose for Amherst

By Donna Longenecker

Release Date: January 25, 2002

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Photo: courtesy of K.C. Kratt

BUFFALO, N.Y. -- The Town of Amherst could become the first municipality in Western New York -- and one of the few in the country -- to offer major government services online, thanks to assistance from students in the University at Buffalo's Department of Computer Science and Engineering.

Among the innovations that are being considered, and whose implementation will depend on availability of funding, is a Web-based procurement system using online auctions, perhaps in conjunction with other municipalities, in which vendors would bid on contracts.

The partnership between UB and the town to develop e-commerce and e-government software solutions came about because the town "needs to automate things more quickly because of (its) sheer size, and manual systems just don't cut it," said Jerry Galkiewicz, director of computer services for the town.

While the town's Web site now offers an online tax-assessment challenge and provides in-depth information about its services and programs, he says implementing more sophisticated e-commerce applications to enhance the way the town does business would be a huge step.

Building on earlier e-commerce applications designed for the town by UB MBA students under the tutelage of H.R. Rao, UB professor of management science and systems, Sviatoslav Braynov, UB assistant professor of computer science and engineering, last semester challenged his undergraduate CSE students to develop "real, working prototypes" for online services relevant to the town's needs and in line with specifications set forth by Galkiewicz. Student teams enrolled in the "E-Commerce Technology" course created systems for procurement of town supplies, recreation reservations and dog licensing, all linked to and based on the design of the town's Web site.

Braynov believes Amherst would be the first community in Western New York and one of the few in the country to offer these kinds of government services online.

Galkiewicz noted that increasing the functionality, access and number of online services provided on its Web site is part of the town's overall comprehensive plan. By using the CSE students as consultants, the town saves expensive consulting fees while giving students a chance to translate abstract theory and classroom lecture into real-world, hands-on job skills, he said. The partnership, he added, moves the students out of the "ivory tower" and "down on the ground, scratching around to solve real problems, working with real systems and real data."

The students' work on the Web-based procurement system may prove to be the most important of all the e-commerce projects, Galkiewicz pointed out, because it would save both time and money by allowing the town to partner with other municipalities to purchase goods in bulk -- with vendors bidding on contracts during on-line auctions. He added that this type of service also would be groundbreaking, noting that he is not aware of any other municipalities that are acquiring goods over the Internet.

Galkiewicz noted that the governmental bidding process can take weeks or even months when done the traditional way -- through snail mail and approval of bids by the town board during regular meetings. Placing the bidding process online can cut that time dramatically and reduce duplication of services.

"It has the potential to change the way we do business," Braynov said, in part because each online auction is limited to one hour. "It not only avoids duplication of services, but creates competitive markets because several vendors can go there (online) and take part in the competitive process of bidding -- making the end price lower," he said. Most local governments currently purchase goods as separate entities, which prevents them from taking advantage of savings through bulk purchasing.

Perhaps the most unique aspect of the online auction process would be that the bidding would be anonymous. The town would not communicate directly with a vendor until the auction was complete, giving smaller vendors an equal opportunity to compete with large vendors for a contract.

Shanker Srivatsava, who headed the student team working on the procurement prototype, said his group recognizes the potential that e-commerce projects have to revive and even revolutionize the "dot.com" industry.

"It takes two generations to make people literate in new technology," he said. "The dot.com revolution was more of a culture shock -- consumers still are coming out of merchant shopping, where everything has to be touched and seen."

That kind of awareness, which keeps the user in mind, motivated students to create a simple, functional site without a lot of bells and whistles, one that easily can be managed and updated by the town.

"Dot.com projects like this can make a difference and exploit dot.com technology in the right way," said team member Husain Sutarwala.

Keeping an eye on the bottom line, team member Seunghwan Son echoed a common concern of taxpayers, noting that "the potential savings to taxpayers can be passed on, freeing up spendable dollars to be added to the town's economy."

The biggest hurdle Galkiewicz sees in implementing the students' prototypes is integrating their software programs with the software and internal systems the town already has in place -- systems that continuously update the town's database and records.

Then there are the financial considerations. The town doesn't have the resources to replicate the hardware and software environments the students are working in, and Galkiewicz said there is no state money available to fund e-commerce.

The state has created a task force, of which Galkiewicz is a member, "to determine how best to develop this capability for all level of governments," he said.

In the meantime, Braynov has given the town online access to the UB projects and Galkiewicz said he will continue working with the university to learn what it takes to "do e-commerce.

"It's a beginning. We're just learning what it takes to move from manual financial accounting to doing it easily and seamlessly online," he said.

Although he doesn't have solid statistics, Galkiewicz said he expects there are many Internet-savvy, computer-literate residents in Amherst, further propelling the town's desire to create mechanisms for citizens to interact with government.

Braynov says cooperation with the town will provide valuable feedback for research activities.

As for the students, they said they are eager for more courses and learning opportunities that provide exactly what the e-commerce course gave them: a chance to develop an idea as part of a team and then make a professional pitch to a potential client.