Defense Buyers Cast Wider Net

aving developed its defense strategy for the coming century, the Clinton administration is now focusing on how to acquire the military weapons, information systems, and other products and services necessary to carry it out.

To make it happen, Defense Secretary William Cohen has concluded that DoD needs to reform fundamentally the way it conducts business. Cohen's predecessor, William Perry, was a strong proponent of acquisition reform, arguing that DoD no longer could rely on a unique Defense-only marketplace to meet its needs. Perry said the agency must look outward and take maximum advantage of the commercial marketplace.

Cohen's recently announced Defense Reform Initiative, with its heavy reliance on private-sector models of change, flows directly from and widens Perry's path. Jacques Gansler, the new undersecretary of Defense for acquisition and technology, says: "Restructuring and streamlining are required throughout the department as we face the 21st century's military and economic changes, and what better place to start than at the top?"

From the people who brought us the Internet (born out of DoD's Arpanet, linking university researchers with government officials), jet engines and navigational satellites, what innovations will flow from the Defense Reform Initiative?

No More Paper Exercises

First on the list of reforms is making the contracting process for major weapon systems paper-free by Jan. 1, 2000. All aspects of the process will be covered, including contractor selection, contract writing, administration, accounting, auditing, contract reconciliation and close-out. Payments also will be included through electronic funds transfer (EFT). In fact, more than 80 percent of Defense's $54 billion in contract funds already are disbursed electronically, so the EFT goal doesn't represent an overwhelming challenge. However, for most other elements of the contracting process, the Cohen target represents a stretch goal that will require a dedicated, well-trained staff and senior management support.

Two questions come to mind. Is DoD likely to reach this electronic commerce goal, and if so, what are the implications for the rest of government?

Reaching the 100 percent paperless goal will not be easy. Just witness the challenges then comptroller, now deputy secretary, John Hamre faced in trying to rationalize DoD's myriad accounting and finance systems. In an agency the size of Defense, there is so much inertia at all levels that radically reengineering the contracting process becomes extraordinarily difficult. Moreover, people are comfortable with how they have been doing business and need to see real benefits before they will easily change.

Nevertheless, the 15 miles of paper files in storage at DoD's Columbus, Ohio, contracting facility certainly make a persuasive case for tackling the problem.

If anyone in the federal government can do it, the Defense Department can. And, with close to three-quarters of the government's contracting dollars flowing from the Pentagon, the rest of government will follow. The trick will be to make sure DoD does not come up with a Beta approach, like the one that rendered the first VCRs obsolete, while the commercial world is deciding on VHS. In the early days of computers, Defense had the needs, money and power to drive the market. Now, as Perry recognized, customers of commercial products and services are much more in the driver's seat.

Deskbook Points the Way

My confidence in DoD's ability to reach the goal while avoiding these traps has been bolstered by the agency's Acquisition Deskbook, developed over the last few years. This electronic document is a "must have" tool for today's contracting and program officials. It provides a reference library of acquisition reform legislation, governmentwide procurement regulations, best practices and "lessons learned" that address all conceivable aspects of the contracting process. It's structured to enable users to differentiate easily between mandatory requirements and discretionary practices.

The Defense Acquisition Deskbook Joint Program Office at Wright-Patterson Air Force Base in Dayton, Ohio, is the developer and keeper of the technology. The whole enterprise is sponsored by the Deputy Undersecretary of Defense for Acquisition Reform. What would be reams of paper in any other setting now fits on one CD-ROM that is updated quarterly and is available to anyone through the Government Printing Office. Contractors pay a small annual fee, while the Deskbook is free for government agencies. More than 21,000 CDs are already in circulation with an estimated 100,000 users. Most are in Defense, but some civilian agencies have signed up. Non-defense data such as the Transportation Department's regulations, for example, are included on the disk.

The lessons learned and the best practices in areas like performance-based contracting or past performance are relevant to any agency or contractor with acquisition responsibilities. Just having the data at your fingertips saves both time and money. In fact, the time and money saved using the Deskbook results in a 25-to-1 return on investment, the project office estimates. That seems like a wise investment to me.

If employees like those working on the Acquisition Deskbook are given the paperless procurement challenge, I certainly would not bet against them.

Allan V. Burman, a former Office of Federal Procurement Policy administrator, is president of Jefferson Solutions in Washington.