Call it amazon.com meets construction. More and more municipalities are linking with online vendors to develop a Web-based "shopping cart" approach for those needing to obtain required construction permits for both residential and commercial projects. This e-government trend eliminates travel time to and from city hall and face time with clerks having to rifle through mounds of documents.
Web-based permitting may not be spreading like wildfire yet, but firms in the marketplace see very positive signs of growth. "Governments are slow to adopt to change because they want to be safe and pragmatic," says Scott C. Kvandal, president of Berryman & Henigar Inc., a San Diego engineering firm with its own online permitting business. "But in different parts of the country, particularly California and Florida, governments are starting to act more businesslike and adopt Web-based solutions to be more responsive to constituents."
Kvandal is also CEO of a spin-off, called GovPartner, created in May 2000 to provide e-government services for small and medium-sized cities. B&H is now developing a niche market by franchising this service to other engineering firms.
But there is already competition for e-permitting business. South San Francisco-based NetClerk Inc. was founded in 1999 as the first for-profit e-permitting concern, says founder Jon B. Fisher, who now heads a venture capital firm in San Francisco. NetClerk operates in 1,700 cities and has 700 contractor subscribers. "Ten years ago we had fragmented, closed government systems that could not export data to constituents," says Fisher.
|E-PARTNERS Municipalities offer faster permitting service through vendor Websites.|
NEXT GENERATION. NetClerk has just unveiled its GovCentral 3.0 third generation Web-based permit processing system, which features collaboration capability, electronic stamping and finance. "We're accomplishing more on the Internet. Now, homebuilders can file permits with plot plans, and utilities and telecoms can file encroachment permits with public works departments," says Jeff Kraatz, NetClerk's president and CEO. "In one or two years, we'll be able to do complex plans, but there are still training and technology issues to face."
The marketplace has come a long way just since 1996, when 12 California cities in Silicon Valley formed a joint venture to develop, among other things, a standardized automated permit tracking system. Leading the effort was the city of Sunnyvale, which teamed with nearby Mountain View and Microsoft Corp. to develop an online e-permIT system in 1999.
"We had developed a permIT tracking system in house about 15 years ago, but IT had limitations regarding amount of data entered, processing speed and storage," says Ali Fatapour, Sunnyvale's chief building official. The city sought to upgrade the system in 1996 and looked for an off-the-shelf solution. "But we didn't find anything close to our old system, let alone something new," he says. "So we reformatted it in a Windows environment."
That was a defining moment, notes Fisher. "They came up with a solution and sold the core technology rights to a private firm," he says. "Since then, two dual industries have been born–one targeting private sector end-users and the other targeting governments themselves and their legacy systems."
Berryman & Henigar's GovPartner obtained the rights to Sunnyvale's e-permitting system. Its PermitPartner system allows users to process simple, commonly purchased permits such as electrical, reroofing, and residential water piping without additional processing fees. PermitPartner can also schedule inspections and make credit card payments before issuing a digital permit that becomes finalized at inspection.
Based on Sunnyvale technology, GovPartner also developed CommunityDevelopmentPartner for plan checks and inspection service comments. "If a contractor wants to start his or her day at 4:00 a.m. or end it after 10:00 p.m. when the kids are in bed, he or she can now do so," says Gabriela Mora, GovPartner spokesperson. The systems work together, and inputted information is automatically checked to determine if an address is correct and is located in a city's jurisdiction. "It's a smart system and knows what questions to ask for certain permits," she says.
HOSTED SOLUTIONS. Although Sunnyvale and Mountain View share the same system, each has different server solutions, notes Mora. Mountain View uses a private data service provider, which saves the costs of information technology staff, hardware and software licenses while providing nonstop Website service. Sunnyvale, with its large IT staff, hosts the server in-house. "We're starting to see hosted solutions as the trend, especially since very few cities have the IT capabilities of Sunnyvale," says Mora.
Click here to view: Government Agencies Making Transition the the Net
Fatapour says the number of online permits issued has jumped from two to four per month in late 1999 to about 30 to 40 now. "The city saves about 15 to 30 minutes on each permit and customers save between two and four hours in travel and processing time," he says. Soon, anyone will be able to pull building permit histories on line for Sunnyvale properties to check project status. GovPartner executives are already fielding inquiries from cities around the U.S. and globally.
Other vendors are also seeking to gain market share. Accela Inc., South San Francisco, has been acquiring localized e-government vendors over the last two years, so far rolling up four firms.
Even with vendor expansion, the low-tech solution still works best for obtaining permits in multiple locations. Owners with nationwide building programs, such as Walmart Stores Inc., still rely on so-called "expediting" firms that provide staffers to stand in line for permits. "We still don't have a total solution for nationwide needs so [expeditors] still provide a huge service," says Fisher.
Since expeditor roll-ups are not anticipated, technology may yet play a role in forming a nationwide permitting network by integrating cities and permit requestors directly, says Fisher. "Soon there will be little you cannot do online with government at any time of day or night from your house," he notes.
Fisher says that of 90,000 governmental entities in the U.S., only 19,000 process their own permits and licenses. The rest contract it out or are too small to have a process. Of the 19,000, less than 200 use any type of Web approach. But this small group still processes 80% of all permits, he says. Fisher adds that San Jose and San Francisco alone handle more permits than the 98 other Bay Area cities combined.
Last May, officials of states and construction groups met for the first time to develop a plan to expedite digital permitting of required building construction permits (ENR 6/11 p. 12). The National Conference of States on Building Codes and Standards noted technical and "cultural" impediments, but said routine online permitting could be just five years away.
E-permit proponents are optimistic. "In Silicon Valley, e-government is viewed as a major growing market and we have already seen a change in the caliber of personnel and amount of money involved," says Fisher. He anticipated a not-too-distant day when more California regions will share a Web-based permitting platform. "Imagine if Gov. Gray Davis signed an order allowing all Bay Area cities to use one government portal," he says. Mora believes that peer pressure could force change as constituents influence city officials to look around. "They need to ask ‘how come someone I know in a neighboring city can do transactions online and I can't in my city?'" she says.