A procurement mandate that agencies more often than not have ignored will disappear when President Clinton signs the 1998 Defense Department authorization bill.
In 1994, the Federal Acquisition Streamlining Act mandated establishment of the Federal Acquisition Computer Network (FACNET) for agencies to use as their vehicle for electronic procurement. Agencies are supposed to use FACNET for most of their acquisitions between $2,500 and $100,000.
The law called for penalizing agencies that failed to use FACNET by limiting their use of simplified purchasing procedures. But the FACNET approach was quickly overtaken by market forces and the growth of the Internet, and the Clinton administration sought a change in the mandate.
The federal network, developed by the Defense Department, was both difficult and costly to use, especially in contrast with the World Wide Web. The Web took off just as FASA was being enacted. FACNET is particularly ill-suited for use by small businesses and when contractors are needed in a small geographical area, such as the metropolitan area in which a federal building is located.
The Defense authorization bill, which is moving through Congress this week, still requires agencies to use electronic commerce when it is practical, but gives them more flexibility in how they do so. It codifies what, through policy changes and informal understandings, has become the status quo. The General Accounting Office reported in September that the volume of transactions processed by FACNET has declined. Volume never amounted to 10 percent of federal procurements, by most estimates.
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