DoD e-commerce efforts fall short of goals

By Matthew Weinstock

July 20, 2000

The Defense Department has made little progress during the past two years in implementing electronic commerce efforts, according to a new General Accounting Office report.

Unless steps are taken to fix the shortcomings, the department's efforts to fully integrate an e-commerce program could fall far short of expectations.

Under the Defense Reform Initiative, launched in May 1998, DoD aimed to make much greater use of such e-commerce tools as expanding the use of purchase cards, establishing an electronic mall for customers and moving towards a paperless contracting environment.

While the department has taken steps to implement some of these programs, it's lacking an overall vision for how it intends to move into the e-commerce world, according to the report, "Defense Management: Electronic Commerce Implementation Strategy Can Be Improved" (NSIAD-00-108). Rep. Herbert Bateman, R-Va., chairman of the Subcommittee on Military Readiness, requested the report.

GAO claimed-and defense officials agreed-that the department has failed to:

Even in areas where initiatives are being implemented-such as the increased use of purchase cards for small procurements-it's unclear "if and how they will fit" into the department's strategic vision, GAO reported.

In 1999, DoD employees made 8.9 million purchases, to the tune of $4.6 billion, using purchase cards. But while the purchase card program has exceeded the department's goals, implementation problems remain.

For example, DOD does not know what items and how many of each are being bought with the cards. That makes it difficult to come up with reliable estimates of how much money DoD is saving with the purchase-card program, GAO reported.

On a larger scale, DoD officials are having trouble reaching consensus on how to best move forward with their overall e-commerce program.

"With each of the military services and the Defense agencies developing its own plan and supporting initiatives, the department may further risk applying its resources to initiatives that may be redundant or unnecessary," the report concluded.

DOD officials agreed with all of the report's findings. Stan Soloway, deputy undersecretary of Defense for acquisition reform, said DoD is taking steps to implement a department-wide e-commerce action plan.

By Matthew Weinstock

July 20, 2000