The federal government Tuesday secured another five years with contract bidding engine Merx, but questions remain about how it will jive with those of the provinces.

The five-year contract with Merx, a subsidiary of Montreal-based Mediagrif

Technologies Inc., will take effect June 2004 after the current one expires. There is also an option to extend the contract another four years.

All provinces can use Merx to post request for proposals (RFPs), but Ontario, Manitoba, Quebec, Alberta and Saskatchewan have exclusive contracts with Merx that will run their course on May 31, 2004. At that point they can install their own. The government of Quebec has already opted to develop a system with CGI Group Inc.; Alberta and Saskatchewan are working on their own approaches.

“”Manitoba will have to decide what to do, Ontario will have to decide what to do — Alberta is working on its own system, but now that the details of the federal system are available, they might want to revisit that,”” said John Read, director of acquisition, policy and process for the acquisition service program for Public Works and Government Services Canada.

Disparate systems run by the federal government and various provinces raises the spectre of Canadian companies paying multiple subscription fees to view available contracts.

“”One of the concerns that we have is also that the small business owner who may want to do business in different provinces and with the federal government would be faced with having two systems the deal with,”” said Andre Piche, director of national affairs for the Canadian Federation of Independent Business. “”It would be unfortunate if you had to pay twice. The hope was that we would have one system we could all plug in to.””

Denis Gadbois, Chairman and CEO of Mediagrif, said the “”one-window”” concept of government contracts is the best possible since, “”small and medium-sized businesses don’t have the resources, whether they’re human, financial or technical resources, to access multiple sites.

“”Most of the provinces were waiting to see what would happen with the federal contract. Now that it’s done, it’s part of our job to go back to the provinces and try to get into an agreement with them,”” he added.

The death of one-window bidding is “”something that we recognize as a consequence of the way that things have evolved over the last couple of years,”” said Read. “”We could not talk substantively to provinces about how we can continue the one-window kind of approach until we had our service provider . . . and what the fee structure was going to be. Now that we do know . . . we are certainly open to discussion with all of the provinces to try and configure this system.””

The good news for Canadian businesses is that the monthly Merx subscription fee will be reduced 27 per cent from $29.95 to $21.95. The one-time contract viewing fee will also be reduced from $55.00 to $39.95.

Pricing of the bidding system became contentious after previous Merx owner Bank of Montreal increased the monthly subscription fee from $5.00. BMO hiked the fees to the current $29.95 and subsequently sold the company to Mediagrif.

Piche said that the proposed 27 per cent price break in 2004 is “”a step in the right direction. (Mediagrif) has been very good.”” He added that in the past, companies had paid for RFPs on Merx only to later discover that the contract had been cancelled.

Mediagrif is planning improvements to Merx that will cut back on such misunderstandings. Registered users, for example, will be able to view a complete RFP before deciding whether to download the package.

Gadbois said that the existing system covers about 85 per cent of planned functionality. “”If we are able to increase the value of what we’re offering on the site, our buyers will have benefits. We will be able to recruit more suppliers; more suppliers means a more competitive bidding system and better prices for the buyers,”” he added. There are currently more than 24,000 Canadian businesses using Merx.

 “”In terms of Canadian companies, it’s ground-breaking stuff,”” said IDC Canada Ltd. analyst James Sharp. “”Mediagrif has a predicate of being able to do much more advanced stuff than what Merx is currently able to do. I would suspect that would be good news for that procurement platform.””


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