Date: October 31, 2000
To: Board of Supervisors
Subject: Bringing the County Auction and Purchasing Processes into the 21st Century

Overview:
The County of San Diego has redefined the way government operates through the use of technology, making government services better, cheaper and faster for the residents of San Diego County. The use of technology has opened-up many new possibilities and today's action capitalizes on this new technology by investigating alternative methods to perform County auction and purchasing functions.

Recommendation:
Chairwoman Jacob:

Direct the Chief Administrative Officer to investigate alternative methods of performing County purchasing and auction functions utilizing new technologies and report to the Board in 90 days.

Fiscal Impact:
This request will result in no additional costs.

BACKGROUND:
Through technology, the County of San Diego has redefined the way government does business. The County's implementation of on-line services has ended long waiting lines for San Diego County residents. Through the use of technology, residents are able to do things such as adopt a pet on-line or pay their property taxes on-line. As a result, County government services are better, cheaper and faster. Today's action capitalizes on these new possibilities by investigating alternative methods of performing County auction and purchasing functions.

Currently, County auctions are performed in the traditional auctioneer format. The items available are displayed at a public meeting location and, typically on a Saturday morning, interested parties place bids to a live auctioneer, with the highest bid winning the item. Technology has led to the invention of new forms of auctions. Items to be auctioned can now be displayed on-line, via the world wide web, allowing interested parties to view the items from anywhere in the world where there is access to the web. This allows auctions to take place 24 hours a day, seven days a week.

More and more government agencies are exploring ventures with on-line auction houses. In the past year and a half, the State of Oregon has doubled and sometimes tripled its revenue on most products sold on-line through its partnership with e-Bay, an on-line auction house. Harris County, Texas, which is slightly larger than San Diego County, has also had similar results with its on-line auction program. The most popular items sold have included surplus equipment and items confiscated through police seizure, such as bicycles and electronic equipment. On-line auctions increase efficiency, revenue, competition between bidders and reduce costs by eliminating the need to reproduce auction catalogs and pay staff overtime for weekend auctions.

Another County operation that can benefit from the use of new technology is how the County purchases items, or its purchasing functions. Automating a Qualified Product List (QPL), which is a list of pre-qualified products that can be used as a reference for staff when replacing any repetitively purchased items, will reduce staff time by eliminating the need to manually update product lists. This will allow staff more time for product quality checks and faster stock replenishment.

Pre-bidders conferences, which are where interested parties convene at a central location to have questions regarding purchasing requests answered by County staff, can also benefit from the use of new technology. Conducting on-line pre-bidders conferences, via chat rooms or bulletin boards, will allow for greater participation from suppliers who are unable to leave their small businesses. On-line bidders conferences will also create a record of the questions and answers that can be posted on the web without the need to transcribe and mail copies to subscribers, saving time and taxpayer dollars.

The County of San Diego has become a leader in local government innovation ensuring residents receive the best services at the best price. Investigating alternative methods of performing County auction and purchase functions continues this Board's effort to provide the best possible services to County residents. I urge your support.

Respectfully submitted,
DIANNE JACOB
Chairwoman