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News from the North

By Michael Asner
E-mail: Asner@compuserve.com
Michael Asner is a consultant specializing in procurement and information technology.
He also publishes The RFP Report, a quarterly newsletter of ideas, checklists and information.

Sometimes, those Canadians get it right! On Oct. 27, they instituted a new electronic tendering system called Merx that has tremendous potential for electronic commerce and for facilitating procurement reform - a hot item in most jurisdictions. Merx is a Web-based system that is used by buyers to post opportunities (Requests For Proposals, Requests For Quotations, etc.) And used by vendors to identify business opportunities which match their capabilities.

Merx represents the coming together of the Canadian federal government and 7 of the 10 provinces. An amazing feat! In the U.S., that’s the equivalent of having the federal government and 35 states agree to do something important, do it the same way, do it using the latest technology, and do it using the same external supplier!

What does it do?

Like other electronic tendering systems, Merx connects suppliers of goods and services to purchasers. Many states have these systems. But Merx is a private sector business serving all of the public sector, not simply one state or city, but potentially hundreds. It is the latest version of an evolving system that began with the Canadian federal government and was first outsourced in 1992.

From the buyers’ perspective, Merx is a system designed to manage opportunities. Using the system, a buyer can post procurement announcements to the web site, transfer documents electronically from the buyer’s computer to Merx, update award and bid information, view all of the posted opportunities, and see which suppliers have requested documents.

From the suppliers’ perspective, they can quickly and easily locate new marketing opportunities by browsing or by specifying selection criteria. They can then order and pay for documents electronically and have the documents downloaded or have them sent from a distribution center. (Some documents, for example blue prints, are not available in electronic form.) They can also be notified by email or fax when new documents are added to the system if these opportunities match their pre-defined selection criteria.

Who uses it?

Currently , the entire federal government and seven of the provinces have signed on. All departments within these organizations are required to use the system exclusively. Currently there are about 1500 buyers using the system, loading 200 documents per day. There are also 20,000 registered suppliers. And this is increasing at 300 per week. In November, they were getting 1500 orders per day for documents.

In early 1998, Merx will be expanding by adding the MASH (Municipalities, Academic institutions, School boards, and Hospitals) sector for these provincial governments. In a year or so, according to Bob Binns, the executive responsible for Merx, they anticipate having between five and ten thousand buyers, and up to one hundred thousand suppliers throughout North America. (Merx is used to post opportunities as required by the North American Free Trade Agreement.)

The prospects for electronic commerce using Merx are exciting. In the short term, they are going to continue to expand - expand the number of distribution centers, the number of buyers, and the number of suppliers. In the longer term, they could be a player in streamlining procurement - via electronic submission of responses, distribution of award notices, supplier conferences, and other new services.

What’s it cost?

Merx doesn’t cost government anything. Using Merx means that an organization has outsourced document management related to procurement at zero cost. This alone represents savings of millions.

Merx does not charge suppliers to browse. They charge suppliers who use the system frequently $8.95 per month, plus a page-based charge when a document is downloaded or sent to them from the distribution center.

Electronic Commerce is here!

Although Merx is in its infancy, it seems positioned for success:

  1. Marketing efforts are directed at expanding the number of buyer organizations significantly.

  2. There is no cost to the buyers; suppliers pay $8.95 per month plus a page-based charge for each document they order.

  3. It’s a web-based transaction-driven electronic commerce system. Most documents can be downloaded when ordered.

  4. Merx is a well-funded initiative, owned by a Bank of Montreal company, Cebra, that is dedicated to electronic commerce.

Merx has the potential to become Canada’s national public sector procurement system and a leader in electronic commerce and procurement reform.

To access Merx, visit their web site at http://www.merx.cebra.com