Falling in Gov

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If you're interested, don't get caught twiddling your thumbs. Now is the time when entrepreneurs eyeing the e-government space should jump in. Here's why: There is a central tension developing in the industry between the large companies like KPMG Consulting that provide e-procurement services and smaller companies like MunicipalNet Inc.

Some big firms are pushing for a top-down approach to e-procurement on a state level, hoping to profit by requiring local city and county governments to use the state system for a price. If the plan succeeds, growing businesses may get pushed out of contention.

Nute sees a window of opportunity over the next year and a half for small businesses to win municipalities over before large companies move in. "It really has to do with who can serve the needs of the government best," says Nute. "Those large consulting firms are probably doing a great job of serving the needs of those large governments, but I think it's a little presumptuous of them to think they understand local government well enough to be able to offer solutions."

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This article was originally published in the March 2002 print edition of Entrepreneur with the headline: Falling in Gov.

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