Gov Purchasing
Government Bid Posting Standard
By Richard White
May 19, 2005, 15:34

The public bid notice laws and policies of today were largely shaped back before the world wide web exploded onto the scene as a powerful information distribution medium. Such laws and policies are grounded in local and regional thinking, rather than national.

Different product/service coding systems (literally hundreds) are in use today at the federal, state, and local levels. There is no Internet standard for publishing public bids, no central place that exists for the common good of all agencies (federal, state AND local) and the vendors that serve those agencies.

It will take years (if it ever happens at all) to create an Internet standard for publishing public bids. Our attempt here is merely to begin the dialogue concerning such a standard.

The Case for a Standard

Most procurement managers would agree that having the opportunity to publish a bid to a central or "national" location is a good thing. Small buys could remain local for cost and political reasons, but with the option to post to a wider audience when it makes sense. Going to a wider audience of vendors might be useful, for instance, for obscure, harder-to-find products and services and large procurements where maximum competition is desirable.

For some agencies, this optional posting to a wider audience may first require changes in the agency's procurement regulations.

Extensible Markup Language (XML) provides the best framework for adopting an Internet standard for public bid posting. Adoption of an XML standard would allow thousands of government agencies to republish bids to one central location without the high costs of manual bid reformatting.

Fedmarket.com has begun to develop an XML standard for public bids. This may be viewed at http://www.fedmarket.com/xml/bidExample.xml.

We invite any interested parties to use this standard and/or comment on it by emailing us at rwhite@fedmarket.com. We will incorporate public comments and keep the standard up-to-date. Further, we will transfer standard development to any public purchasing association or federal agency interested in becoming a standards body for public bids.

Basic features of the bid posting standard are:

Its foundation is the federal FedBizOpps.gov standard for publishing bids over $25,000. We used the federal standard as a starting point because the U.S. federal government is the world's largest purchaser of goods and services. Federal spending is roughly one third of the annual procurement dollars spent by U.S. governments. We borrowed many of the federal data elements and added to them.

The standard includes fields for an agency to classify its bids using one or more of all the major coding systems. Use of multiple product/service coding systems is less than ideal but the standard has to accommodate multiple systems until a single standard is (if ever) adopted for product/service classification.

In general, though, it's better to have more than less. Ideally, when it's finally developed, the standard will include all the data elements that are useful. The beauty of an all-inclusive XML standard is that an agency could pick and choose those data elements that it deems proper for its own collection and posting purposes. If an agency isn't interested in tracking, for example, place of performance (POP) information, then it can just ignore those data element for both gathering the information and republishing to the central site.

What other data elements should be added? What have we left out at this early stage of developing the standard? Take a look and let us know: rwhite@fedmarket.com.

Product/Service Coding Systems

The wide variation of product/service coding systems used by governments limits the effectiveness of Internet bid posting systems and electronic marketplaces. Costly manual intervention is required for private Internet publishers to make bids from multiple jurisdictions available in a usable format.

The current status of product/service coding systems is as follows:

Product/service coding systems at the state and local level are either the National Institute of Government Purchaser (NIGP) system, variations of it, or systems altogether unique to the government agency. The NIGP system is probably the best available to describe products/services, but a fee is required to use it and several versions are in use by various agencies.

Some governments use industry-coding systems to categorize products/services for public bid posting. But industry-coding systems are designed to categorize vendors in paper and electronic directories. They are not designed to describe specific products and services. North American Industry Classification System (NAICS) is the current federal standard, recently replacing the Standard Industrial Code (SIC) system. (SIC is still very alive, however, in terms of use. Its death is agonizingly slow.)

The federal government uses both NAICS and the Federal Supply Codes/Product Services Codes (FSC/PSC) system for most of its bidding opportunity posting and contract award systems. FedBizOpps, the legally mandated bid posting site for large procurements, uses two-digit Federal Supply Group (FSG) codes, which are too broad to effectively categorize vendor products and services.

The central contract award database for large procurements uses four-digit PSC codes and the NAICS industry coding system.

The four-digit FSC/PSC system is granular enough to effectively describe a wide variety of products and services but is too out-of-date for describing those developed in the last two decades.


Private sector companies offering bid publishing systems either use the federal two-digit FSG codes when the service is focused on federal bids, or the NIGP system when the service is focused on state and local bids. Bid services covering all levels of government either re-code the bids manually (most often using the NIGP system) or rely on keyword searching to alleviate the high cost of manual bid re-coding. Bid re-coding limits the scope of private bid services. Keyword searching is inexact in the critical process of locating relevant bids.

Product/Service Coding Standard

The Internet standard for public bid posting will ultimately have to include a standard product/service coding system. In our view, the federal government, or perhaps a leading procurement association, should undertake adoption of a national product/service standard. In the case of the federal government, the standard would probably be based on a modernized four-digit FSC/PSC system, perhaps with the adoption of some of the features of the NIGP system. (Note: the federal government has a major investment in the National Stock Number (NSN) system, which incorporates the current FSC system as its first four digits.)

In the case of a procurement association, the standard would probably be based on a free-to-use NIGP-like system that would be modified to serve federal needs.

Currently, we do not see any governmental body rushing to develop a product/service standard. This could change someday, and a dialogue now about the need for a standard -- and what that standard should be -- might be the first step.

Free Bid Posting Service

We are using the above-mentioned standard (http://www.fedmarket.com/xml/bidExample.xml) as a starting point in developing a free Internet bid-posting site for agencies that lack the resources to post bids or are simply interested in discretionary posting to a central, higher traffic location. Basic features of the new bid-posting site include:

• A buyer will use on online form to enter bids directly into the online database.
• Free browser-based tools will be available at Fedmarket.com to allow agencies to send bids to the database automatically from another purchasing application. (To eliminate double entry.)
• An Internet address for central posting will be provided to each participating agency allowing the agency to include a link to the bid database at their purchasing site. The free bid posting site will be partially supported (we hope) by banner advertising.