# Presentation: 656500

## g-Bay.govOnline Federal Asset SalesA Government-wide Approach

***The power of government should not be locked away in Washington but put at our service-no further away than our keyboard.******	******	******	******	******	******	***
***	******	******	******	******	******	******	******- Al Gore***

**Prepared For:**
**GSA, PBS, The Office of Property Disposal**
**GSA, Office of Governmentwide Policy, The Office of Electronic Commerce**
**FinanceNet**
**Prepared By: **
**Booz- Allen & Hamilton**

## Market Overview

**e-Commerce drivers**
**e-Government drivers**
**Industry practices**
**Government asset sales market**
**Competitive dynamics**
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## E-Commerce Drivers

**1997 - $1.4 trillion online sales worldwide**
**1999 - 16% U.S. penetration rate or 28.4 million online purchasers**
**2003 - projected 10% of U.S. GDP or $1.3 trillion to be conducted online**
**Today - $9 billion in government assets ready and waiting for online disposition**
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## The Emergence of e-Government... 

**Market timing**
**Infomediaries and exchanges have been validated in the private sector market**
**Presidential directive to make nearly every government service accessible online by 2003**
**Agencies are advancing in Internet capability and more able to support infomediary prerequisites (e-gov pioneers)**
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**Market Incentives**
**Buyer demand is high**
**Government asset disposition is still fragmented online**
**Key executive players are more amenable to e-Government campaigns**** **
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## Industry Practices

**Infomediary**
**information intermediary between producers, services and customers**
**e.g., Yahoo, MySimon**
**Exchange**
**integrating members into one business-2-business e-commerce**
**e.g., The Steel Exchange Online**
**Auction**
**competitive bidding to complete a transaction between buyer and seller**
**e.g.,  eBay, Amazon.com**

## Personal Property

**Furniture, computers, equipment, vehicles, etc.**
**ex. eBay, Amazon.com**
**online market for sellers to list and auction personal property and for buyers to locate those assets to facilitate transfer of ownership**
**Quick win**** **
**Personal property lends to established auction market**
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## Real Estate

**Commercial, residential, vacant land**
**e.g., LoopNet, Bid4Assets.com**
**online market for sellers to list real estate and for buyers to locate those assets to facilitate transfer of ownership**
**only provides platform for buyers & sellers**
**online revenue models emerging. . . **

## Financial Assets

**Bulk loans, small business loans, mortgage backed securities, multiclass securities, etc.**
**e.g., Pedestal.com**
**secondary market for financial assets**
**online revenue models emerging**

## Competitive Dynamics... 

**Commercialization of government asset sales**

**Bid4assets.com is a viable private sector competitor that has a similar service offering online and is targeting the government asset sales market**** **
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## Competitive Dynamics... 

**Commercialization of government asset sales**

**govWorks is a viable private sector competitor that has a similar service offering online and is targeting the government asset sales market**
**private sector alliance**
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## Intergovernmental Asset Sales Team

**Mission**
**Where we are today?**
**Achievements **
**Frustrations**
**Who are the customers?**
**What are they saying?**
**What is our future potential?**
**g-Bay.gov Business Case**

## IGAST- Review of the Mission

**A shared governmentwide Internet resource providing. . .**
**Internet communications support for interagency organizations**
**Governmentwide web portal for public asset sales**
**Home for International Government News Project**

## IGAST- Where are we today?

**Major achievements**
**Inspired some agencies to be more proactive (FDIC/Pedestal)**
**Largest intergovernmental network in world**
**30 million hits per year in govsales (50-60 M in total)**
**225 world government newsgroups**
**150,000 daily e-mail subscribers**
**200 + Internet listservers**
**20 - 30% of NASA auction participants originated thru FinanceNet**
**Registered sites**
**(HTTP://WWW.FINANCENET.GOV, HTTP://WWW.GOVNEWS.ORG, HTTP://E.GOV, HTTP://g-Bay.gov, HTTP://FEDSALES.COM)**

## IGAST- Where are we today?

**Frustrations**
**Transition from a public service to a self-supporting business model**
**Lack of identified revenue model in the existing service**
**Lack of funding thus far**
**Lack of details regarding agency participants**
**Difficult to set action agenda and timeline without official management structure and identified advisory panel**

## g-Bay.gov - Two sets of customers. . .

**The public or buyers of government assets**
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**The federal agencies who are the suppliers of information that make our site worthwhile**

## What are the buyers of federal assets saying...

**About current Govsales?**
**“****Govsales serves positive role in directly linking to asset disposition page.”**
**asset sales focused vs. silo-agency focused **
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**“****It split off into too many links. I wanted more functionality on the site.”**
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**“****Not as advanced as other private sector sites that I have visited online.”**

## What are the buyers saying about...

**Agency online asset information?**
**Agency websites are difficult to navigate**
**difficult to locate assets and identify sales process and related issues**
**Assets not intuitively linked with the agency names**
**Assets for sale are buried deep within the site**
**Generally asset descriptions are not uniform, lack descriptive detail and don’t provide concrete picture of asset**

## What are the buyers saying about...

**Other online government initiatives?**
**Customers of current Harris County,Texas initiative provide positive feedback **
**more say in government **
**more access to information**
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**Customer views on different asset classes**
**requested specific information (“it works” vs. “it appears”)**

## What are Agencies saying about the...

**IGAST pilot?**
**They are more focused on creating own Internet strategies**
**See a need for collaboration yet lack resources to do so**
**IGAST participation has encouraged proactive Internet strategies**
**Agencies learning about private sector initiatives and lessons learned through IGAST forums**
**Agencies still unsure of IGAST’s strategic direction and their ultimate role**
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## Agency Asset Information Suppliers...

- Where are they generally?** **
**All are moving toward Internet but with varying speed (brochureware versus full online disposition)**
**Each building momentum focused on **_**particular**_** asset classes and business processes**
**General lack of best practice sharing regarding asset sales among agencies **
**true of agencies with like assets as well**
**Initiative versus business model approach**

## Agency Asset Information Suppliers...

- Where are they generally?** **
**Putting applications online versus developing e-Gov strategy**
**Feel regulations inhibit agency collaboration **
**Piecemeal approaches to e-strategy and often not communicated within the same organization**
**General lack of marketing and Internet alliance building, specifically with the private sector **
**Agencies called upon to deliver more or better services with decreasing resources**

## Agency Asset Information Suppliers...

- What do they want from IGAST?** **
**Bring more targeted buyers to each asset class**
**Participate in packaging, marketing, and pre/post sale activities**
**Offer customer additional information (policies, asset-related data)**
**Help to qualify private sector players as viable partners**
**Government asset sales market-maker- better coordinated access governmentwide**

## Other Political Constituents...

- What do they want from IGAST?** **
**Enhance online distribution of federal government surplus property, specifically fed-to-fed transfers**
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**A central hub of asset information not going to the public sale but to state and local governments and non-profits**
**More access**
**More efficient matching**

##  g-Bay.gov Business CaseWhat is our future potential?

## The Pilot Project

**Strategic Goal**
**	****To cost- effectively dispose of government assets publicly in a fair, equitable and customer-centric manner**
**By utilizing government and industry best practices in order to realize economies created by a portal serving multiple agencies.**

## The Pilot Project

**Objectives**
**Improve efficient customer-focused public access to asset information**
**Increase intergovernmental interaction to eliminate redundant service offering**
**Optimize market penetration for efficient asset disposition**
**Achieve better prices, reduce operating cost and increase inventory turnover**
**Create a common registry of asset information**
**Minimize spending costs on IT infrastructure by leveraging previous government investments**
**Create a secure and uniform IT architecture for g-Bay.gov****	**
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## 2

**Pilot Overview- Two-Pronged Approach**

**Interagency**
**Collaboration**

**Partnership Evolution- ****Fewer Stovepipes**

**Common **
**Dictionary & Shared lessons**

**Shared Applications**

**E-Government Strategy-**
**Integrated service delivery**

**Service-based with flat links**

**Value-based self-sustaining business**

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## g-Bay.gov- Business Model 

**g-Bay.gov- Business Model **

**Infomediary versus consolidated auction model**
**Model builds off of the momentum created by agencies**
**Keeps the operations and data source with the agencies**
**Packages data/assets to provide more value to the buyer**

## g-Bay.gov....Value Proposition

**Objective**
**A customer-centric portal providing a uniform interface for Federal asset sales information**
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**A value-based business providing bottom line benefits to agencies who dispose of federal assets **
**Achieved by offering the customer both an additional point of entry to asset sales information and increasing market liquidity through aggregated asset offering **

## g-Bay.gov- Concept Illustration

**g-Bay.gov- Concept Illustration**

**Security**

## g-Bay.gov - Pilot Critical Success Factors

**Value proposition to buyers of federal assets**
**Value proposition to suppliers of federal assets**
**Pilot suppliers - commitment from participating agencies**
**Management structure and leadership (ownership structure)**
**Pilot start-up financing and cost**
**Pilot revenue streams**

## Value Proposition to Buyers of Federal Assets

**One-Stop-Shop**
**Provides the public with a central hub of government asset sales - central asset registry**
**Search functionality- by asset class**
**Common asset description and buying experience**
**Establishes the community of users needed to support all phases of the asset sales cycle**

## Value to Federal Suppliers of Assets

**An additional point of entry to existing Internet initiatives**
**A government-wide megabrand (Single disposal face to stakeholders)**
**Marketing****- ****Targeted asset class campaigns, current listserve, co-branding, narrow casting**
**Customer intelligence**
**Internet Alliances- stronger position w/ aggregated supply**
**Facilitate forums for increased partnership and private sector learning**** **
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## Pilot Suppliers - Commitment from Agencies...

**Real Property - GSA, HUD, SBA**
**Financial Assets - FDIC, HUD, SBA**
**Personal Property - GSA, Treasury/Customs, NASA**
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## Management Structure and Leadership

**g-Bay.gov must have designated management structure like any start-up (Cnet.com & other exchange models)**
**Strong advisory management board made up of participating agencies (loopnet.com model)**
**Advisory council ensures g-Bay serves individual asset classes well**
**Clear roles and rules for participation**
**Set up interim management team**
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## Ownership Structure...Long-Term

**Privatization**
**Continuum**

**Totally **
**Public**

**Public/Private Partnership**

**Totally Private**

## Pilot Start-up Financing

**Options**
**OMB supported**
**Agency equity participation (MOU)**
**Private sector partnerships**
**Council for Excellence in Government**
**Start-up costs**

## Pilot Start-Up Costs

## g-Bay.gov- Pilot Revenue Stream 

**g-Bay.gov- Pilot Revenue Stream **

## g-Bay.gov- Projected Revenue

**Assumptions**
**Based only on 2 pilot agencies personal property asset sales**
**Assumes 5% growth in asset sales**
**100% online sales by year 3**
**30% online sales result of g-Bay.gov referrals**
**Important to note**
**Only personal property sales**
**Full costs attributed to property sales**
**No advertising or other revenue sources included**
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## g-Bay.gov- Part II

**g-Bay.gov- Part II**

**Objective**
**To facilitate partnerships and coordination amongst agencies with similar asset classes in order to enhance the portal’s value and ease of use to the buyer **

## g-Bay.gov- Partnership Evolution

**Purpose**
**Eliminate redundancies in the asset classes represented in the infomediary**
**Encourage information sharing- leverage inter-governmental learning and investments (i.e. applications, customer lists etc)**
**Assist/mentor late-adopting agencies towards online asset disposition**
**Facilitate the emergence of a cross-government strategy for each asset class participating in the infomediary   **
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**2**

**Partnership Evolution**

## Partnership Evolution...

**Critical Issues**
**e-Government strategic approach to asset sales**
**Highest return to Government overall**
**Sharing of best online practices for asset class**
**Create a common dictionary**
**Sharing of agency lessons learned thus far**
**Security**
**Regulatory issues- use of proceeds etc.**
**Asset class working group - agree upon agenda for quick wins, next steps etc.**
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**2**

**Partnership Evolution**

## Asset Class Partnerships

**Personal Property**
**GSA, NASA, Treasury/Customs**
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**Real Property**
**GSA (PR), SBA, HUD**
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**Financial Assets**
**FDIC, HUD, SBA   **
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**2**

**Partnership Evolution**

## Personal Property

*** ****Total pilot personal property sales volume is approx. $ 275 M**
- * GSA & NASA have online gateway present- can build a connector easily
- * Quick win - proven business model and fastest route to critical mass of  buyers
- * Customs needs more lead time to build the connector

## Personal Property- GSA, NASA, Customs

**Pilot Proof of Concepts**
**Quick win - proven Internet model (eBay.com)**
**GSA as the lead agency to consolidate personal property**
**GSA/NASA partnership to use Ariba/AMS platform**
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**2**

**Partnership Evolution**

## Real Property

*** ****Total pilot real property sales volume is approx. $ 500 M**
- * GSA, SBA & HUD have online gateway presence - can build a connector easily
- * Not many online sales in real estate but much of the process can be done online
- * Customs needs more lead time to build the connector

## Real Property- GSA (PR), SBA, HUD

**Pilot Proof of Concepts**
**Office of Property Disposal as lead**
**Define customer requirements for online functionality relative to real property**
**Evaluate governmental and non-governmental stakeholders that participate in the real estate disposal/deal process (EPA, lenders, appraisers, etc.)**
**Explore GSA Ariba/AMS platform for real property  **

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**Partnership Evolution**

## Financial Assets

*** ****Total pilot financial assets sales volume is approx.  $ 3.34 billion**
- * Financial assets don’t have  online gateway presence - Longer lead time to build               the connector
- * Not many online financial asset sales but much of the process can be done online
- * 30 million per 1 billion sale goes to due diligence and transaction advisor

## Financial Assets- FDIC, HUD, SBA 

**Pilot Partnership Proof of Concept**
**FDIC as the lead agency**
**Develop a shared customer database**
**Look at pre-sale & post-sale activities**
**Tackle due diligence online (FDIC Dallas Office)**
**Conduct a shared benchmarking study of private sector banks to determine best online practices**
**Identify and share contractors who meet this criteria or build/share capability**
**FDIC share lessons learned with online sale (Pedestal)**
**Investigate the sharing of SBA’s pricing model**
**Talk about the concept of aggregating pools for more attractive asset packaging**
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**Major Issue**
**If you aggregate marketing of all government financial assets online, will you in fact increase the number of buyers? **
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**2**

**Partnership Evolution**

## g-Bay.gov- Benefits...

**For the public- end asset buyer**
**Provide new ways for citizen participation in democratic process**
**Logical extension of Govnews**
**Access to more inventory and easy side by side price comparison of similar products from different agencies**
**Service based on product requirements or business rules versus agency stovepipes**
**Customized “my sale” web pages and listserves for targeted interests**
**Minimizes time and cost of finding desired product**

## g-Bay.gov- Benefits...

**Governmentwide**
**One stop shop- gives an enhanced governmentwide presence in the online community**
**Provides a role model for a more customer-centric government (eliminates bureaucratic stovepipes)**
**Reduced redundancies- better return for taxpayers dollars**
**Potential for governmentwide community features**
**Leverage previous IT investments**

## g-Bay.gov- Benefits...

**Agency-specific**
**Government site controls security and vendor access to certain information**
**Streamlines distribution channel based on seller-defined buyer groups**
**Capture of customer information - current and potential buyers**
**Facilitates value added alliances and partnerships**
**Provides liquidity to market and increases the number of potential buyers**
**Share best practices- reduced learning curve and costs**

## Risk Management 

**What are the key risks?**
**Pilot participants (initial suppliers) do not commit, play a defined role, or cooperate**
**Portal is comprised of stale data sources (data accuracy)**
**Pilot is too long and other Federal agencies outside of the pilot players sign on with someone else**
**Inter-agency policies that affect the success of the system are not changed, deleted, or added in a timely fashion**
**Level of revenue realized**
**Private sector players (i.e. Bid4assets.com) maintain timing and flexibility advantage**
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## Risk Management 

**What are factors out of our control? **
**Agency cooperation and level of commitment**
**Agencies signing on with private sector**
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**How should we manage them?**
**Expedite at the top level of government**
**g-Bay.gov define clear value proposition to the agencies and invest in the pilot  (incentivize agency participation)**
**Define clear pilot implementation plan**
**Roll-out pilot as soon as possible**
**Control costs, identify additional revenue generating activities by adjusting business model**
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## g-Bay.gov.....Conclusion 

**Commit high-level leadership**
**Leverage existing IGAST achievements **
**infrastructure, listserve & audience**
**Heed the customer call and invest to start immediate path forward with the pilot proposal**
**Build portal capabilities (connectors for pilot participants)**
**Pilot agency advisory council (clear roles)**
**Create a common dictionary for asset classes**
**Serve both customers well**
**Mirror business logic by asset class for a uniform buying experience**
**Facilitate strategic partnerships- Incentivize agencies to participate- demonstrate real value**
**Further explore threat/opportunity with Bid4assets & govWorks**
**Investigate other critical agencies to join the pilot (DRMS.com)**
**Explore alternative Internet alliances (eBay, loopnet, Pedestal)**
**Simultaneously conduct feasibility analysis to determine the degree of privatization (long-term return to the gov’t)**
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## You should not have to wait in line to communicate with your self-government. You should have confidence and high expectations in the years ahead as you relate to a new system of e-government.						- Al Gore