Supply Chain Council of European Union |

Oregon could save $1 billion with e-procurement over time

Oregon is getting a new e-procurement system and in the process streamlining a lot of inefficiency and old purchasing systems that weren’t integrated, the state agency in charge of procurement says.

Earlier this month the Oregon Department of Administrative Services signed a multi-year agreement with e-procurement services provider Periscope Holdings to launch and operate Oregon Buys, a universal digital procurement program that could save the state as much as $1 billion over the next several years.

Oregon Buy will launch next year and eventually replace outdated and mostly manual and paper-based systems used by as many as 85 separate state agencies to buy goods and services, the agency says.

Every two years under the state’s 24-month budgeting cycle, Oregon spends about $8 billion buying a wide variety of goods and services for the various state agencies that support Oregon’s population of about 4 million residents.

Getting control of multimillion-dollar spending

But a hodgepodge of outdated legacy procurement systems and business processes resulted in widespread overspending, the state says.

“We analyzed vendor-supplied purchase-level data for all information technology price agreements from 2016 and 2017 and identified 3,193 products and services that were purchased multiple times at varying prices,” the Oregon Secretary of State’s office said in a January 2019 report. “If these purchases would have been made at the lowest price paid, the state could have potentially saved as much as $7 million, a 5% cost reduction, of the purchases we analyzed.”

Oregon awarded Austin, Texas-based Periscope Holdings a five-year contract to implement Oregon Buys. Oregon Governor Kate Brown is calling for the rollout of the Oregon Buys e-procurement system statewide over the next two years and asked the state legislature for $9.7 million funds to expedite the project.

The first wave of agencies currently operating on the Oregon Procurement Information Network will begin using the system by June, with a deadline of having all state agencies up and running on Oregon Buys by the end 2021, says the Oregon Department of Public Services. “The state has unified procurement rules, but lacks a modern information technology system to standardize and track procurements,” a spokeswoman says. “Procurement processes vary by agency, are manual in nature, and are labor-intensive. Manual processes limit the state’s ability to track and manage spend.”

Procurement for state and local government agencies

The new e-procurement system will enable state agencies and departments to compare purchasing across Oregon’s own contracts, those managed by other public sector organizations, cooperative contracts, and the open market, says Periscope Holdings president and CEO Brian Utley. “They wanted a single, unified e-procurement technology system that could be scaled to serve both larger state agencies and smaller local governments,” Utley says. “At the same time, they made it clear that increasing contract awards to small local businesses is a priority.”

Specific e-procurement tools through Oregon Buys will automate procurement steps such as request through payment, workflows and approvals, solicitations, bid submission, purchase orders, and invoicing and reporting, the state says. “One enterprise system tracks and manages agency purchases, and enterprise-wide data collection helps agencies identify trends and make informed decisions,” the spokeswoman says.

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