Philadelphia Business Journal featuring municibid

http://philadelphia.bizjournals.com/philadelphia/blogs/technology/2009/06/municibid_markets_govt_stuff.html

Friday, June 19, 2009, 8:00am EDT | Modified: Monday, June 22, 2009, 9:42am
Municibid markets gov’t stuff
by Peter Key Staff Writer

As a member of the Pottstown Borough Council, Greg Berry used to get frustrated when the borough would conduct a sealed-bid auction to sell something and get far less than the item was worth.
When he found out people at other municipalities were feeling the same frustration, he started a company to enable local governments and government agencies to sell things online.
Berry, who runs his own information-technology firm, PointSolve, launched municibid.com LLC in January 2007. Since then, about 200 government entities, mostly in Pennsylvania, have signed up to use the company’s Web site to auction off goods they want to get rid of. (Pottstown doesn’t use it to avoid a possible conflict of interest.)
Municibid charges a flat fee for a one-year membership that allows members to sell as much or as little as they want to over its site.
Anyone can register to bid on the site, but they must abide not only by its rules, but by the rules of the government body whose items they’re bidding on. That means they may have to put up deposits for expensive items and agree that even if their bid wins, it may have to be voted on.
If a bidder wins an auction and tries to avoid paying for the item, municibid works with the auctioning agency to get payment from it.
“We have a zero tolerance policy in place for those bidders who decide not to come forward after they bid and it’s pretty aggressive,” Berry said.
Berry runs municibid from his home in Pottstown. The company has one other employee and uses a data center in Michigan to host its site.
“The site is designed to be as automated as possible,” he said. “We’re here for customer service and working with the municipalities and that sort of thing.”
Springfield, Delaware County, was one of municibid’s first members.
It has only sold vehicles on the site, said Susan Warner, the township’s assistant manager, but it does get better prices for them than it used to get through sealed-bid auctions.
“It’s been great,” she said. “I’ve written a lot of things supporting them.”
Berry’s goal is to get 6,000 members for municibid by the end of 2012. That would be a dramatic expansion for the company, but it still only amounts to 6.5 percent of the 92,000 local government entities that Berry says exist in the country.
Berry also wants to enable the site to do reverse auctions so that government entities can use it to bid for services, as well as sell things.
“Our plan is to develop the auction side first, which is a little bit more comfortable for municipalities to wrap their head around,” he said.
Berry hasn’t figured out a revenue model for reverse auctions yet. He does have ideas for ways other than memberships of getting revenue for municibid, but wouldn’t disclose them, except to say that they would come about as the site adds members.
“The biggest thing is helping these municipalities increase their non-tax revenue, which is very important in these times,” he said.