KeyCorp is working with a U.S. West subsidiary to offer a computer service that enables small businesses to bid electronically on government contracts.
U.S. West, the Denver-based telecommunications company, will provide the electronic bidding service, and KeyCorp will handle electronic data interchange and cash management services.
To use the service, small-business owners complete a profile of the products and services they offer, and the computer system automatically sorts through available government contracts.
When the businesses' products match the government's needs, the computer service notifies the entrepreneurs by E-mail or pager so they can bid electronically.
"Within the next couple of years, if you don't have the electronic capabilities you will basically be shut out of supplying the government,"said Patrick Swanick, executive vice president and group manager for electronic commerce at KeyCorp.
The federal government requires that purchases worth $2,500 to $100,000 be done electronically. That rule includes purchases of supplies for government office buildings or construction on military bases.
KeyCorp ranks as the largest bank lender in dollar value to small businesses for loans of less than $250,000, and Mr. Swanick said the procurement service will help boost his customer base.
Mr. Swanick said federal government agencies distribute more than 8,000 contract requests a day, mostly for products worth less than $100,000 and are filled by small businesses.
The U.S. West and KeyCorp service is hardly the only such product, but KeyCorp is the first bank to offer it to small-business customers.
"If we had wanted to build the infrastructure for this procurement service, we could have done it," Mr. Swanick said. "We believe we can get the product to market quicker if we align with an established market leader."
The Small Business Administration is testing a similar computer service that lets federal contracting officers search for small businesses that can meet their needs.
KeyCorp and U.S. West will charge an initial $200 registration fee and a $60 monthly fee for the electronic service. Businesses must have a standard Internet connection.
