County saves by buying high-tech equipment on eBay

By Charles Taylor
Senior Staff Writer

Lots of local governments sell used stuff via online auctions - everything from aging ambulances to last-generation computers - at Web sites such as GovDeals.com and Liquidations.com.

Recently, two Missouri counties - Howard and Randolph - even offered their old jails for sale on eBay. (Howard’s sold in November for $42,000 to a Los Angeles lawyer, according to media reports.) But it’s still rare to find counties buying items from the popular auction site.

St. Louis County, Minn. is changing that. It recently made headlines with a pilot program using eBay to purchase $250,000 worth of communications equipment for the sheriff’s department - mobile laptop mounts, modems and radios - for about $20,000. Bought new, the computer holders would have cost $850 a piece, not the $50-$60 each the county paid at the online auction site.

Tight county and department budgets and the availability of a homeland security grant led the county to look to the Web site for some good deals.

"All of our equipment funds were cutback and we needed to look for something that was going to be a force multiplier," said Bruce Hegrenes, the department’s communications guru, noting his budget had been slashed by more than one-third.

Sheriff Ross Litman is pleased with the outcome and had no concerns about buying "pre-owned" items. "A lot of this is real quality equipment that has more than enough useful life on it," he said, crediting his staff of "scroungers" and "bloodhounds" for sniffing out some great deals. "You’ve got to do more and more with less and less, and this is a great example of that."

St. Louis County’s purchasing director, Dick Florey, knew this pilot program involved some risk. "I’ll be perfectly honest with you," he said by phone from Duluth, the county seat, "I was very skeptical about purchasing anything on the Web. It’s not like if something goes wrong with the commodity that we’re buying that we can just walk down the street and exchange it."

Hegrenes had personally used eBay before, and was familiar with how it worked. He addressed Florey’s concerns by making sure the equipment could be returned if it didn’t work, researching the sellers’ ratings with other buyers and ensuring the transactions could be conducted electronically and securely - "without having to ship checks around."

"We wanted to be able to make sure that we could eliminate fraud, so we weren’t going to be ripped off in the process," he added, "and we still could maintain the tight fiscal controls that the purchasing department, and the county auditor and state law require us to."

The result for the law enforcement agencies in the county’s towns and townships: "They’re able to get technology and equipment that they wouldn’t normally be able to afford to purchase without going out and bonding and a multi-year process of trying to find the funding for this," Hegrenes said.

"We’ve been able to provide this equipment that’s the same thing that you’re going to find in metropolitan areas into our rural areas of St. Louis County."

Purchasing and procurement laws vary from county to county, state to state; so not everyone is able to go the eBay route. "The traditional way that laws are written presume that the public entity will develop something in writing that says what they need and invite vendors to respond to that," said Maggie McConnell, an Arizona attorney who works with the National Institute of Governmental Purchasing on procurement law issues. However, she said counties and cities may already have language in their ordinances or statutes that provide "some flexibility to do something a little creative beyond what has been standard purchasing or procurement procedures."

For example, McConnell said, Arizona has a unique emergency procurement provision "that says you can develop a procurement process that meets your needs if you have a condition that affects the health welfare or safety of the state or entities in the state" or if "competition is impracticable or not in the state’s best interest."

Fort Lauderdale, Fla. considered buying radio equipment for the city on eBay, said Procurement Director Kirk Buffington, but decided against it because of "concerns about seller credibility and warranty issues" if they had problems with radios. "The IT director did not think it was the best move to make at that time."

However, under the right circumstances, Buffington wouldn’t rule out purchasing goods from the online auction service.

"I don’t believe any options should be closed simply because of one problem on one issue," he said. "There may come a time that something else presents itself on eBay that we are able to verify and feel comfortable with and presents a very good market-driven price, and we may make the buy."

Buffington has some advice for counties considering trying eBay: "Attempt to do some real good due diligence on the product: whether the product presented seems reasonable, if it sounds like it’s too good to be true, then it very well may be." His Minnesota colleagues had a few recommendations, as well.

Hegrenes: "Get someone that is eBay-savvy that has bought or sold on eBay before so they know what the pitfalls are so that they’re not going to fall into them when you start making large purchases for the county. Second you need someone who is very knowledgeable of what they’re buying."

Technology equipment is a good candidate for purchase on eBay, he said. "That’s one of the biggest things that a county is going to spend an awful amount of money on. And it’s typically deeply discounted even after the first year."

Make sure that it’s something that you can use; "even a small change in a model number or something that’s not described right on eBay may not be exactly what you can use."

Florey: Make sure you have a department that’s willing to work with you on this, as was the case with his county’s sheriff’s office. "Plan well ahead for the problems that may come up, and make sure that you’ve got your county auditor or your finance department on board to make sure that they understand the issues that could arise."

Despite possible pitfalls, Florey is moving forward with is pilot program.

"So far, it’s working well," he said - well enough that he’s looking to push the program out to other county departments.

"Now that we’ve had the pilot out there for eight to 10 months and we know it works and we know where the pitfalls may be, it’s much easier for another department to come jump on the bandwagon. But once again, we need to be selective as to what we’re going out there and purchasing.

"I’m really cautious with it," Florey said, "but with the cooperation that we’ve had with the sheriff’s department really, they’ve made the program work."