In a rare case of a government program actually running a surplus, Virginia is removing fees that businesses pay to participate in the state’s e-procurement system. The move will give purchasers in the state government access to a wider selection of vendors.
According to an article published in the Roanoke Times, the Virginia Department of General Services made plans to eliminate the $25 registration fee after a General Assembly audit of the state’s e-procurement system found that the program had an operational surplus of $18 million.
Virginia’s e-procurement system, called eVA, was established in 2001 to automate procurement and bring down costs. The program currently has about 41,000 vendors signed up to bid for state contracts. In addition to the $25 enrollment fee, vendors pay a 1 percent per transaction fee that is capped at $1,500.
Because essentially all goods and services must be purchased through the eVA system, small businesses have been complaining about the enrollment fee for years, claiming that it amounts to a tax for doing business with the state.
The decision to eliminate the enrollment fee came after several years of the program running surpluses.
“You have to realize that eVA is supposed to be break-even,” said Richard Sliwoski, director of the Department of General Services. “Last year we gave a rebate of about $5 million back. And we just wanted to make sure it wasn't a fluke and make sure our business model was sound. Now that we understand the revenues that are coming in, we're going to lower the cost to the agencies.”
