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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
Washington Post Staff Writer
Wednesday, April 5, 2000; Page G05
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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