Defense Secretary William Cohen officially christened the Defense Department's electronic commerce movement on Friday.
At a ribbon-cutting ceremony at Defense Logistics Agency headquarters in Fort Belvoir, Va., Cohen and Deputy Defense Secretary John Hamre opened the Joint Electronic Commerce Program Office, a joint DLA/Defense Information Systems Agency office charged with making business throughout DoD paperless.
"We're still a paper-bound organization," Hamre said. "But what we're seeing is the cutting edge" of electronic commerce. "This stands out as a bright exception in this town as something good that's happening in government."
As part of the Defense Reform Initiative, the Pentagon announced last fall that by Jan. 1, 2000, the entire contracting process for major weapons systems would be paper-free. Other goals include using purchase cards for 90 percent of purchases under $2,500, creating paperless logistics systems and expanding the use of electronic catalogs and shopping malls, such as DLA's Electronic Mall.
The new Electronic Commerce Program Office, which actually set up shop in January, coordinates activities across the services and Defense agencies. The office will work on digitizing the processes of contracting, acquisition, transportation, finance, accounting and logistics.
Claudia Scott Knott, co-director of the new office, said she and her staff will be working with people from across the department to make sure all the systems and projects present a common face to DoD and outside users.
"That's the big challenge," Knott said. "We want to present a single view to our customers, but let different components maintain uniqueness. It's decentralized execution, with centralized policymaking."
Hamre conceded that DoD workers who see themselves as the guardians of traditional acquisition processes may not like the department's electronic commerce push.
"There probably is a fair amount of resistance," Hamre said. "This is the ultimate democratization of the acquisition process."
Hamre said DoD will establish internal controls to prevent fraud, but acknowledged some abuses will occur.
Hamre shared an anecdote about what appeared to be an abuse of a purchase card at the Navy's China Lake facility in California. One of Hamre's aides informed him that someone at China Lake had bought a racehorse at a bar with a government IMPAC purchase card. Hamre decided to investigate.
It turned out that guards patrol the perimeter of China Lake on horseback. When a horse died, an employee went to a horse dealer to buy a new horse. The dealer did not have a credit-card machine, so the employee and the dealer conducted the transaction at a bar across the street from the dealer's store. No abuse of the card had taken place.
Knott said implementation of electronic commerce techniques is uneven across the department. Contracting operations are rapidly becoming paperless, she said, and financial management programs are catching up. Other programs, like transportation support, are further behind, Knott noted.
"The key to this is teamwork," Knott said. "We can now take the energy generated by Secretary Cohen and Deputy Secretary Hamre and focus and build upon it."
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