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Aggregate purchasing designed to save government money

NAGV bringing headquarters to Howard Technology Park

Ellisville — There’s a new tenant in the Howard Technology Park in Jones County that promises to be beneficial to a wide range of governmental and nonprofit agencies and through them save taxpayers money. The new corporate citizen is the National Association of Government Vending (NAGV), a nonprofit entity that uses electronic commerce via the Internet to reduce the cost of purchasing for government and nonprofits, including churches.

“We have developed a business model that not only saves government and nonprofits 15% or more on every purchasing dollar,” said NAGV president Jeffery Schoner, “we are able to deliver this service to all participating parties for free.”
NAGV’s Web-based Interchange presents a way to significantly reduce the cost of government by taking advantage of a fully electronic transaction system. It allows for an easy access to combine purchasing among multiple jurisdictions.”

According to the U.S. Office of Management and Budget, electronic and aggregate purchasing alone will generate annual savings to jurisdictions of 15% or more. These monies can then be spent on reducing budget shortfalls and funding other needed programs and projects.

NAGV was first incorporated in Maryland in 2000 with a skeleton team and was growing slowly when Schoner decided to look for a more welcoming environment.

“I didn’t want it to drag on forever and was looking for a place that wanted to be number one,” he said. “I knew some states were looking for technology, so I especially looked at Appalachian states. West Virginia ranked number 49 and Mississippi number 50.”

He requested economic development packages from both states and came to the Magnolia State for his first visit one year ago. He continued to exchange e-mails with both states, even taking his computer on a European trip to stay in touch.

The pendulum swung in Mississippi’s favor when Schoner received an e-mail from Joey Roberts with the Mississippi Development Authority (MDA) inviting him to attend MDA’s economic conference on the Coast.

“He said the state would pick up the tab and I said ‘Are you kidding?’” Schoner recalls. “I was also invited on a fishing trip after the conference.”

Chase Mosley, a Mississippian and retired Marine officer living in the D.C. area, further enhanced the state’s case. Mosley and Schoner learned of each other through the MDA e-mails and subsequently talked by phone.

“He called me and told me about a computer manufacturer (Howard Industries) in Ellisville. I didn’t know computers were made in Mississippi,” Schoner said. “I just smiled when I heard about the technology park in Ellisville.”

Schoner’s second visit to Mississippi was three weeks after the economic conference with Howard Industries picking up the tab this time. Stacy Pickering showed Schoner around and pulled things together for the visitor to make a presentation. He also introduced Schoner to Mitch Stennet and Sandy Holifield of the Economic Development Authority of Jones County.

“There was a conference room full of people from the county, state and city governments for my presentation,” Schoner said. “We re-incorporated in Mississippi in 2004, found temporary space and moved everything here.”

NAGV currently employs 17 people at its Ellisville headquarters but employment is expected to swell to 300 jobs with an average non-managerial salary of $40,000 per job. They will also open a membership office in the Jackson area that is expected to employ 60 people.

Sandy Holifield, executive director of the EDA of Jones County, says NAGV is the type of industry development leaders want to see locate in the newly-opened technology park.

“It’s all going to be tech oriented. NAGV has good paying jobs that mean a lot to our county, “ she said. “They are presently located in the technology park’s headquarters building and we’re hoping they will build a larger facility in the future.”

Getting on board

The cities of Laurel and Ellisville, Jones County and the EDA have signed on to utilize the NAGV system of purchasing.
Jones County Board of Supervisors president Andy Dial said the county’s information is being loaded into NAGV’s system now and the two entities have a letter of agreement.

“They contacted us for a list of vendors and I hope we will get started right away,” he said. “I think it will be a lot less labor intensive and therefore make us more efficient. Plus, it will create more competitive pricing and that will save us money.”

Schoner says NAGV is an interchange and users connect through them. All state purchasing guidelines and all registered vendors are in the system.

“It fits their systems and is very easy. They don’t have to buy anything,” he said. “We save them hours of research with the bid management system and can save 15% through the course of a year by aggregating and sharing contracts.”

He says that while several Mississippi jurisdictions will be the first to adopt the NAGV Interchange, other states are already poised to get on board.

‘Givers, not takers’

NAGV generates its revenue through optional association memberships sold to vendors and also through agreements with association marketing partners. Participating governments or their vendors are never charged for using NAGV’s purchasing platform nor does it derive any revenue from transactions on the NAGV Interchange.

NAGV is a 501(c)6 nonprofit organization and will leverage the buying power of its vendor members to create a fund administered by the NAGV Foundation, a separate 501(c)3, to support the needs of government and community programs. No funds are derived from taxpayer dollars and 100% of all monies coming into the foundation are used to support a purchasing grant program. Participants have the opportunity to make applications for these grants from the NAGV Foundation.

“We want to be known as givers, not takers. We want to be a partner to government,” Schoner said. “We expect to be part of the solution, not just last week’s new business announcement.”

Contact MBJ contributing Lynn Lofton at mbj@msbusiness.com.


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