Builders Exchange Hits A Wall With Competitor

July 21, 2008
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GRAND RAPIDS — The 97-year-old nonprofit Builders Exchange of Grand Rapids & Western Michigan, which gathers news about pending construction projects and distributes it to members, is running into a brick wall with a Web-based, for-profit competitor.

Elizabeth Bovard Austhof, a construction news reporter for Builders Exchange whose husband, Bart Austhof, is executive director, said some of the municipalities that use the Michigan Inter-governmental Trade Network are blocking her attempts to retrieve construction-related information of interest to members.

“These are publicly funded projects. You’re not allowed to do that,” Austhof said.

BidNet, based is Albany, N.Y., and part of publicly traded Canadian company Mediagrif Interactive Technologies Inc., runs MITN. About five years ago, BidNet worked with municipalities in the Detroit area to establish a Web-based system of posting bid requests. The items range from services to supplies to construction projects.

According to its Web site, 39 governmental agencies now are MITN members. Ottawa County is the only member from West Michigan.  “It’s a full-blown, fairly comprehensive e-procurement system that allows the government to move all bids and vendor information online,” said BidNet Vice President Daneille Ansell. “It cuts a significant amount of costs.”

But Austhof said it cuts out Builders Exchange by prohibiting a “reseller of bid information” from registering on the site.

“Now, some of these agencies, that is the only way they are advertising their solicitations,” she said. “That’s fine, but MITN can’t deny me access to something that is public information.”

Cy Chauvin, a construction news reporter for the Construction Association of Michigan in Bloomfield Hills, said he has run into the same problem.

“Mostly we work around it,” he said of the nonprofit organization founded in 1885. “It’s a little bit unfair in one sense. Most of the projects, I think, that BidNet has exclusively that we don’t find out about from other sources aren’t terribly significant. It’s usually pretty minor stuff. But we like to tell people about everything. You don’t know how small a contractor might be.”

Austhof said that even though most local municipalities do not participate with MITN, the local Builders Exchange distributes information from across the state to members, who are contractors, subcontractors and suppliers.

“The city of Farmington Hills was sort of upset when I called up about a project,” she said. “I just wanted to find out what bid results were on the project. He sort of implied we were selling the information to make money. Since we are nonprofit, that doesn’t make much sense.”

Ansell said that BidNet does not require exclusive listings from participating municipalities.

“Each agency has their own rules on how they manage those types of documents,” she said. “Agencies out there use a lot of different plan rooms. That’s nothing that BidNet dictates. Agencies decide on what info they want to release outside the system.”

There is no fee for participating municipalities. Vendors can pay $49.95 per year or $79.95 for two years to receive solicitations by email. They can register for free if they forgo the e-mail.

BidNet allows government agencies to track which bidders have downloaded their materials, Ansell added.

Ottawa County Administrator Alan G. VanderBerg said the county has been pleased with MITN, but also provides information for the Builders Exchange.

“For some of the things we bid, we’re literally looking statewide or nationwide for bidders,” he said. “With construction, typically we’re going to be hiring somebody regional.” Distance makes it tough for vendors to provide competitive pricing, he said.

Austhof said she has taken her effort to shake loose construction information from MITN-exclusive government agencies to the state Attorney General’s office, where she has filed a complaint. She said she hasn’t yet heard back.

“It is a great thing for these agencies, if they don’t have to manage all that,” she added. “However, if you are the only place that’s hosting this public information, you can’t deny anybody access to it.”

The Builders Exchange, 4461 Cascade Road SE, had revenue of $872,871 for the 2006 tax year, and a positive margin of nearly 16 percent, according to its IRS filing. Net assets were $1.35 million.

BidNet is one of 16 networks operated by Mediagrif, which reported $47.7 million (Canadian) in revenues for fiscal 2008. Revenues from its e-publishing business in the U.S., excluding two recent acquisitions, rose by 12.4 percent, according to the company’s annual report.

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