Lee defends paperless contracting

The Pentagon's procurement policy chief has voiced a strong endorsement of a system to digitize the armed service's contracting activities.

"We will have challenges; I'm not going to tell you that next week you'll have a product that will have everything you want," Deidre Lee, the Defense Department's procurement director, told several hundred contracting officers at the Standard Procurement System users' group conference Feb. 27.

Although in some cases existing systems may have better features, SPS can help DOD come up with "better and more accurate data," Lee said. Such data can help the armed services comply with the Chief Financial Officer Act of 1990, which mandates that DOD organizations produce auditable financial statements. Just last week, Defense Finance and Accounting Service officials announced DFAS is the first DOD agency to comply with the CFO Act of 1990.

One gaping hole in SPS is a financial management interface with DFAS, which would enable contracting actions to be paperless from the requirements definition through award and contractor payment. After that, SPS needs a logistics interface, which could be complicated if each logistics activity and major system needs its own SPS interface.

John Hamre, the former deputy Defense secretary who championed SPS, set Jan. 1, 2000, as the date for DOD to meet its paperless contracting goal, but the armed services are not close to achieving that mandate.

Developed by American Management Systems Inc. and based on the company's Procurement Desktop product, SPS runs at 846 sites and has more than 20,700 users, said Gary Thurston, the SPS program manager at Defense Contract Management Agency.

SPS is replacing 75 existing DOD contracting systems, and eventually 42,000 contracting officers will use it at 1,100 locations, he said. DOD has spent more than $200 million through its 1997 SPS contract with AMS, he said. The procurement has a $326 million delegation of procurement authority.

The SPS deployment is nearly complete at each service's installation level. What remains is SPS deployment to more than 12,000 DCMA contracting officers at 164 sites, as well as weapons systems contracting officers and inventory control points through fiscal 2003. SPS contracting officers have made more than $10 billion worth of contracting awards and modifications to existing contracts through 74,639 different transactions, Thurston said.

Lee urged the assembled contracting officers to work through the initial difficulties that they'll encounter with SPS, such as the time needed to learn the system, the effort to input more data and dealing with the program's occasional software bugs.