The Cutting Edge: Computing / Technology / Innovation : Federal Agencies Converting to Computerized Bidding Process : Procurement: New system aims to open up access to contracts. Paperwork also will be simplified for bidders.

Using a laptop computer, a modem and the first finger of the left hand of an assistant Treasury secretary, the Internal Revenue Service became an on-line shopper.

George Munoz, the Treasury Department’s chief financial officer and assistant secretary for management, launched the Treasury’s version of the Home Shopping Club on Aug. 24 by punching a button to select the best of four bids on a contract to supply the IRS with computer software.

All the bids were submitted via computer. The winner, a small Virginia firm named BDS Inc., was notified the same way. It’s a procedure all government agencies must begin putting into place by next July, according to an executive order signed by President Clinton last fall. Full-fledged “electronic commerce” programs are to be in place by early in 1997.

The federal government, of course, won’t be using perky hostesses or the television airwaves. Computer mailboxes, bulletin boards and a telephone connection are more the bureaucracy’s speed. The electronic commerce, combined with simplifications of the government’s notoriously cumbersome procurement procedures, will save the government $22.5 billion over five years by stimulating competition for contracts and reducing costs, the Clinton Administration has estimated.

And officials hope to broaden access to government contracts. The federal government buys about $200 billion worth of goods and services annually, but much of that business seems to flow to a relatively small number of firms that are steeped in the mysterious ways of government procurement.

“We hope this will encourage all business, particularly small, women- and minority-owned business,” Munoz said. “The government is ready to do business with all those who are ready to use today’s technology.”

In the Treasury Department’s pilot project, participants can use their computers to find out what contracts are available. They place their bids electronically and they find out who got the award via e-mail.

The first $11,464 spent electronically by the IRS bought it off-the-shelf software that is available to any business for bypassing the reams of paperwork and yards of red tape so common in doing business with the government, Munoz said during a stop at a Treasury Department procurement conference in Los Angeles (where he put that left forefinger to good use).

“We wanted to start it in Los Angeles, because California is known for being at the cutting edge of technology,” Munoz said.

Buying by computer is part of Vice President Al Gore’s proposal to “reinvent” government while getting the bureaucracy launched on the information superhighway. It is supposed to work hand in glove with the Federal Acquisition Streamlining Act that Congress is expected to pass this month. The legislation would ease the rules on government purchases of less than $100,000.

Although all government agencies are supposed to have at least a pilot electronic commerce project started this month, it appears that only the departments of Treasury, Defense and Interior will make the deadline, said Debra E. Sonderman, Treasury’s assistant director for small and disadvantaged business utilization.

That’s because the bureaucracies are not only setting up these new electronic procurement systems, they’re also trying to coordinate methods of buying with one another, said Sonderman, who is also on the board of advisers of the president’s electronic commerce task force.

“It’s been a Herculean effort,” she said. “It’s a complex process of getting different organizations to agree.”

Sonderman said she thinks electronic commerce will help Treasury Department officials meet their goal of boosting purchases from minority- and women-owned businesses 30% by the end of fiscal 1995, to a total of $300 million.

“Now companies all across the country can have access to our business,” she said. “It gets rid of the notion that you have to know somebody in order to get your foot in the door with the federal government.”

The folks at BDS Inc. in Sterling, Va., obviously find this a fine idea.

“It makes a lot of things easier for us,” said Jack Littley, vice president of BTG Inc., the parent of BDS. “We don’t have to go through the normal cumbersome delivery order process, where you send in the paperwork and something is inevitably wrong and then you have to redo it all and send it again.”