DoD celebrates electronic commerce advances

Electronic commerce initiatives at the Defense Department are helping make the military more efficient, Defense Secretary William Cohen said Wednesday.

Speaking at the one-year anniversary of a departmentwide effort to conduct business online, Cohen said DoD employees are beginning to understand the benefits of e-commerce.

"We started this effort about a year ago," Cohen said. "It was the beginning of the end of a department burdened by paper and the beginning of a department guided by the electron."

Last June, the Pentagon officially christened a Joint Electronic Commerce Program Office to promote the use of e-commerce in the military services and Defense agencies. The Pentagon believes that a paperless contracting system and other Internet-based systems can improve the efficiency of DoD's business operations.

In an effort to make contracting paperless from solicitation to award, DoD is using a Web-based system called Electronic Data Access. So far, electronic documents are being used for eight of DoD's 12 contract writing systems, with about 18 million documents now stored electronically.

The department's Central Contractor Registration now holds information on 152,600 contractors, up from 22,000 a year and a half ago. Though there are some exceptions, contractors must be listed in the database to win a Defense contract or to be paid for a contract. The Defense Finance and Accounting Service is using the contractor information in the database for processing financial transactions.

DoD has also created a Web site, DoDBusOpps.com, which provides potential vendors with a single point of access to solicitations from all the military services and the Defense Logistics Agency. Vendors can link up to the Central Contractor Registration from the Web site to register to do business with DoD.

In the area of purchases under $2,500, purchase cards are replacing purchase orders. In 1998, the 160,000 DoD employees who carry purchase cards used them for 86 percent of all purchases below $2,500. On the back end, purchase card data from banks is still entered manually from paper into DoD's accounting systems. By the end of the year, DoD plans to have an electronic system in which purchase card data flows automatically from the banks into DoD accounting systems.

Cohen urged DoD employees to continue developing e-commerce improvements. For example, the Pentagon wants DoD to use public key infrastructure security measures for online transactions by the end of 2001.

"It has long been the perception that doing business with DoD was a hard, slow and often confusing process," said Scottie Knott, head of the Joint Electronic Commerce Program Office. But with Web technologies and e-commerce advances, "doing business with DoD can be easier than it has ever been before," she said.