Bid Online and They Will Come
HawaiiPlanz saves time by posting government construction projects online
Not too long ago, Kenny Leong hated plans. As part owner of a small electrical-contracting company, Leong wasted hours each week, driving to city and state agencies to pick up plans for government projects seeking contractors’ bids.
Why the runaround? Leong needed to see the plans to determine the projects he could and should bid. Worse, city and state offices often closed before he finished on a job site, so it meant he had to take valuable time out of daylight hours. "There weren’t enough hours in the day. I thought, ‘There has got to be an easier way to do this,’" Leong says.
In January 2002, Leong decided to do something to solve the jam and help the state’s 6,000-odd contractors. He would post digital versions of project plans on the Internet and charge contractors a fee to browse and download project plans. Eventually, contractors would be able to bid for jobs online with no paper and no pell-mell dash to reach government offices before 5 p.m. Better still, contractors would be able to receive addendums (project changes) to plans via e-mail. That would be key, Leong explains, because keeping up with addendums remains a nightmare for all firms. "In the beginning, we wanted to save the contractors time and money. All these upfront pre-bid costs can add up," Leong says.
After talking to Hawaii state and county officials, Leong realized that HawaiiPlanz could save money in reproduction costs. "They will only have to create one digital plan vs. the hundreds of paper copies they have to give out now," he claims.
Leong had little technology experience, so he contacted his cousin’s husband, Ryan Doi. A network administrator at Finance Factors and a general computer guru, Doi liked the idea and said, "Count me in." Leong and Doi knew they needed a serious programmer to build the software required to run the online viewing and transaction engine. So they talked to James Fujino, a University of Hawaii computer-science graduate who had worked at several local tech companies, including Monster Software and pixi.com. Fujino bought the idea, as well.
In June 2002, with a six-figure investment from Leong, the trio officially formed HawaiiPlanz Administrators. Leong sold his share of the electrical contracting company to a partner and took the plunge.
"My wife thought I was crazy," Leong recalls. Crazy like a fox, perhaps. The company, now located in the Manoa Innovation Center, got the necessary interface and software pieces up and running by January 2003. Subscribers can choose to: pay $50 up front and $20 to download each plan; pay $200 up front and pay $5 to download each plan; or pay $300 for unlimited downloads.
Marketing efforts have been low-key, but the company already has more than 20 paying customers, including one of Hawaii’s largest commercial-paving contractors, Grace Pacific. Randall Matsumoto, the company’s project estimating manager, says Grace Pacific already browses through various posted projects at HawaiiPlanz to ascertain which ones might have paving components. Matsumoto hopes one day to use HawaiiPlanz to facilitate conferences with the company’s Neighbor Island offices and obviate the need to fly Neighbor Island managers to Honolulu to discuss planning and bidding strategies.
It’s not all rosy, however. Leong himself wishes the state would pass an electronic signature bill so contractors could not only view project plans online but also bid online. Without an electronic signature provision in the Hawaii State Code, all contract bids need to be submitted as hard copy, Leong says. Finally, while the city and county of Honolulu puts plans for its municipal projects onto digital CDs (something the state agencies plan to do shortly), the other counties lag in digitizing their construction-planning process. That means Leong and his team will have to continue pouring money into expensive scanning systems to capture the detailed plans.
Still, Leong figures the company will break even within the next year. It only requires 80 paying customers to hit that point. He hopes to have hundreds of paying customers within the year, with help from a newly hired marketing consultant, Ed Nishioka of Professional Results. Providing the same posting and download service for the private construction market could open up another revenue stream in the near future. Ultimately, Leong could sell his technology nationwide. Leong says, "Our model would fit anywhere, but we are concentrating on Hawaii for now."
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