OMB: E-commerce striding forward

Agencies are making progress in using electronic commerce to improve the way they purchase goods and services, but challenges lie ahead, according to a long-awaited Office of Management and Budget report released this month.

According to the report, "Electronic Purchasing and Payment in the Federal Government," agencies increasingly are using purchase cards to speed up low-dollar, high-volume purchasing. For example, in fiscal 1998 a number of agencies - including the departments of Health and Human Services, Transportation and Veterans Affairs - reported using purchase cards for 90 percent or more of their micro-purchases.

The report shows that agencies are making strides with e-commerce, said Mary Mitchell, deputy associate administrator of the Office of Electronic Commerce at the General Services Administration. "Agencies have had time to look at what they were doing with electronic commerce and to compile that [data]," she said. "Getting it all in one place gives us as agencies an opportunity to see where we can partner and where we can share some common approaches."

The report discusses the steps agencies have taken to meet the goals of the governmentwide strategic plan for e-commerce, issued in March 1998 by the Electronic Processes Initiatives Committee of the President's Management Council. The plan calls for agencies to use commercial e-commerce technologies and business practices to conduct and improve transactions. It encourages partnerships with industry, the use of online catalogs and purchase cards, and re-engineering certain functions.

Many agencies, such as the Defense Department and GSA, are beefing up online catalogs and malls to make it easier to search for and buy products, the report said. Since January, all GSA schedule holders have had to accept the government purchase card for products valued at $2,500 or less. DOD is adding a "training corridor" to its E-Mall that enables users to search and pay for courses and conferences.

In addition, agencies have shown that solicitations and related documents can be made available online via a governmentwide single point of entry, the report found. For example, several agencies are testing the Electronic Posting System, which provides a single place to post and look for solicitations, award notices and other information. Since the EPS pilot began in July 1998, nearly 11,000 postings from more than 2,200 registered EPS users have been placed on the system, and nearly 17,000 vendors have signed up for electronic notification of posted opportunities.

OMB's Office of Federal Procurement Policy is expected to mandate EPS as the single point of entry for government business opportunities, but it already appears to have widespread support. "We are already in the process of negotiating memorandums of understanding with agencies that want to start using EPS right away," said Paul Fontaine, GSA program manager for GSA's Acquisition Reform Network, a Web clearinghouse for information on federal purchasing reform. "The agencies that participated in the EPS pilot are committed to it."

However, some of the issues that must be ironed out before EPS becomes the single point of entry include who will administer EPS on a governmentwide basis and who will pay for it.

Some government e-commerce officials agree that the government has made progress but warn that more funding is needed. "I agree with the report that progress [has been] made," said Tony Trenkle, director of the electronic services staff at the Social Security Administration, "but there is still a ways to go."

One of the challenges is coordination and funding governmentwide, he said. "The vehicle for funding some of these governmentwide initiatives and putting the proper framework together to make sure they are implemented on a governmentwide basis is not there," Trenkle said. "A lot of opportunities might be lost if we can't coordinate on a governmentwide basis."

The government also faces challenges in keeping up to date with commercial products and incorporating them into their operations. "Agencies will need to continue to be mindful to avoid the pitfalls of seeking to apply e-commerce technology without first addressing the need to restructure their businesses processes and assessing the benefits to be attained by making the investment," the report said. Interagency cooperation also is essential to take full advantage of the investment agencies make in e-commerce, it added.