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Defense Streamlines Procurement with Its
Emall The Defense Logistics Agency is rooting for its Emall to streamline buying and save taxpayer money. And we’re not talking pennies here. DLA buys supplies for military installations all over the world. The agency also manages $900 billion in contracts for Defense and other federal agencies. Washington Post staff writer Sarah Schafer says you won’t find "gum-chewing teenagers with wads of their parents’ disposable income" in the new Emall. What you will find, she says, is "Pentagon officials with large checks from the U.S. Treasury hunting for lubricating oil, drill bits and other supplies needed to keep the world’s most powerful military humming." In a story in the Business Section on April 5, Schafer calls DLA’s Emall the "ultimate marriage of Washington’s old business, government, with its new one, high technology." She writes, "As business-to-business, or B2B, commerce companies replace business-to-consumer ventures as the hottest Internet plays, government managers are following their private-sector counterparts online." Many companies that sell primarily to government now have a "shop" on Emall. So far Emall focuses on small purchases - under $2,500 - that are not already automated. But that’s still $4 billion worth of purchases, according to Schafer. "The business-to-government sector has seen a flurry of deals and strategic partnerships recently, with companies that might otherwise compete, joining forces and attempting to divide up the government procurement market," Schafer writes. There are challenges for the government, however. She quotes Don O'Brien, electronic commerce research-and-development manager for the Joint Electronic Commerce Program Office at DLA. Part of the problem, he said, is coordinating the many different parties involved in purchasing, especially when the system "is quite a departure from the normal way of doing business." Schafer writes: "As in B2B electronic commerce, the idea behind business-to-government is to cut out as many steps as possible between the purchaser--the government--and the supplier. When that happens, the government reasons, transaction costs plummet. "For example, O'Brien recently visited a Navy aircraft overhaul facility. There, the mechanics rely on "material control people" to secure parts. Before Emall, the mechanic asked the material control worker for a part. That worker filled out a paper form and sent it through internal mail, or sometimes e-mail, to a procurement employee in another office. The procurement officer would call a few suppliers or send them a letter, asking for bids. Then, the officer would order the part from the chosen supplier by telephone, fax or sometimes through EDI, and the supplier would ship it to the material control person. "Now, the material control worker goes to the Emall site, scrolls through parts available from a number of pre-approved suppliers, and places the order online directly with the supplier, which ships the part. "Our approach is for the customers to be able to directly interface with the supplier," O'Brien said Having government customers buy directly from suppliers means government needs fewer procurement officials. And last year, the Emall project cut the cost of some micropurchases in half or more, O'Brien said.
Title: For Agencies, a High-Tech Way to Shop By Sarah
Schafer For a copy of the article, search http://www.washpost.com
Article reviewed by Patricia B. Wood, Editor, Access America Online Magazine. You may reach her at Pat.wood@npr.gov. April 5, 2000
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