Federal managers are using electronic commerce to improve efficiency in the federal government by making the process of buying goods and services more time- and cost-effective, according to a new report from the Office of Management and Budget.
The report to Congress, "Electronic Purchasing and Payment in the Federal Government," looks at steps agencies have taken to put electronic commerce to work in the federal acquisition arena. The annual report is required under the Office of Federal Procurement Policy Act.
In its March 1998 strategic plan, OMB's Electronic Processes Initiatives Committee (EPIC) noted three areas of improvement for federal e-commerce initiatives. First, management structures need to be improved so agencies can take advantage of new technologies when they become available, EPIC said. Also, paper should no longer be used in processing small-dollar, high-volume transactions, and efforts should be taken to automate other procurement processes, the committee said.
Agencies have taken many steps to meet these goals in the past year, EPIC concluded. One fundamental change was legislative: As part of the 1998 Defense Authorization Act, the regulatory framework governing electronic commerce was changed to give agencies more flexibility.
"As a result of these changes ... the regulatory framework is helping to promote migration of agency resources to those applications of electronic commerce that offer the greatest promise of process improvement," the report said.
Agencies are also joining together to identify common business functions where e-commerce can be leveraged. The government's Procurement Executives Council, for example, started an e-commerce committee that meets monthly to discuss strategies for using electronic transactions.
The report noted that agencies are increasingly using electronic catalogs and purchase cards to help eliminate paper waste for small-dollar, high-volume purchases. The report singled out the General Services Administration's GSA Advantage! and the Defense Department's E-Mall as two well-managed electronic catalogs that are improving every day, the report said. GSA Advantage! is working on enhancements that will improve online interactive help and ensure around-the-clock availability, among other things. Meanwhile, DoD's E-Mall is being expanded to become a one-stop shopping site for all of the department's electronic catalogs.
Purchase cards have taken off in the federal government too, the report said. In 1998, several agencies, including DoD, reported using purchase cards for 90 percent or more of their small-dollar purchases. Governmentwide use of the purchase card totaled almost $8 billion in 1998, compared to $5 billion the previous year, the report said.
Electronic commerce is also providing private firms better access to contract opportunities and improving inter-office data collection. The Electronic Posting System, a pilot project involving GSA, NASA, the Air Force and the Transportation, Treasury and Commerce departments, was designed to allow agency buyers to post notices of awards, requirements and solicitations online. Sellers can receive automatic e-mail updates of changes to contract solicitations and view summaries of contract awards.
These and other initiatives are a good start, but a lot of work remains to be done in the E-commerce arena, the report said. In the future, a central index of electronic catalog sites should be developed so managers can make use of existing contract vehicles, the report recommended. Government payment systems still need to be modernized, and security for electronic transactions needs to be improved. Finally, pilot programs need to be evaluated and made available governmentwide if they are working, the panel said.
It will be a challenge for agencies to keep up with rapid advances in e-commerce technology, said Deidre A. Lee, acting deputy director for management at OMB. Nonetheless, "we remain committed to finding ways for using electronic commerce to strengthen the government's buying and paying functions so that we may deliver improved service to the American taxpayers," she said.
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