Pentagon logisticians have entered the next phase in implementing
their end-to-end paperless procurement process, as they work toward
a March 2004 deadline.
The system will create a single-stop network, where users can perform
contracting, program management, payment, financial management,
accounting and logistics functions. The system is co-managed by
the Defense Contract Management Agency (DCMA) and the Defense Finance
and Accounting Service (DFAS).
Deputy Secretary of Defense Rudy de Leon, in September, established
the End-to-End Procurement Process Cross Functional Executive Steering
Group (ESG) and Implementation Integrated Process Team (IPT), made
up of members of the military services and defense agencies, to
lead the way. End-to-end means the system handles every transaction
from contract requirement through contract closeout.
The system model supports Defense Reform Initiative directives
introduced by John Hamre, who formerly held de Leon’s post.
“[Hamre] had a problem that he was trying to solve. And that
problem is the amount of money that we spend and lose track of,
through [the Defense Department],” said Air Force Lt. Col.
Paul Yandik, director of paperless contracting at the Defense Contracting
Management Agency. “We buy an awful lot of things in [the
department]. We make an awful lot of payments. And our older systems
were making a lot of mistakes. The way we’re doing business
[includes] a lot of paper transactions taking place, a lot of people
trying to make those payments happen. We make, on an annual business,
$10 to $13 billion in mistakes. That’s a pretty big number.
And Congress kind of gets worried about that.”
To address this problem, the Pentagon sought to automate paper
transactions. But the problem could not just be resolved with automation,
because there were too many disparate, redundant systems.
“[Hamre] had a vision that said, ‘hey, you know what?
The problem that we have here is that you have people trying to
use paper transactions’” said Yandik, at the Association
For Enterprise Integration’s 21st Century Commerce International
Expo2000, in Albuquerque, N.M.
Too Many Systems
“We’re getting more automated, but we’re having
people send or re-key data in this system of systems. We have many,
many data systems out there. We have many, many accounting systems.
We have many, many contracting systems. And these transactions of
buying an item, receiving an item and paying for an item create
a lot of these data entry problems. We have a line of accounting
within [the department] that is 130 characters long. And we expect
people to be able to code that correctly in 10 different transactions.
We’re probably missing the boat there, so we want to try and
automate that process.”
One solution is for the system to have a single point of data entry,
said Yandik, “where I load that information once, pass it
along from system to system and not have to remake those mistakes.
... Paperless contracting is a way to make that happen.”
When Hamre first issued his paperless contracting directive, all
of the military services and defense agencies were eager to step
up to the task, said Yandik. However, each entity worked to develop
its own solution. “We all were building different solutions
to the same problem,” he said. “We weren’t really
integrating across the Department of Defense to try and solve these
things. We were just creating the same kind of solutions that sometimes
step on each other across the department.”
This, said Yandik, led to additional directives that eventually
caused defense officials to realize that a department-wide system
was needed.
“When we started looking at the problem, what we found was
that the functional communities have been doing a very good job
of automating processes,” Yandik told the conference.
“The problem that we had was that the interface, or the handoff,
between these systems was not automated,” he said. “We
would have somebody write up a requirement or generate an electronic
requirement in a system, print that out as a piece of paper, walk
it down to this accountant, and have [him] reload that information
into the finance system. The same thing would happen on the contracting
side.”
In developing this end-to-end paperless procurement system, the
DCMA-DFAS team did not start from scratch, said Yandik. It considered
many of the systems that are already in use, such as the Standard
Procurement System, which is the basic department-wide contract-writing
program. The team had to overcome the fact that these systems were
managed by different agencies. It had to establish an interface
that would allow the systems to interact with each other.
“We came up with a concept called ‘portfolio management,’
which is taking all of the systems that are in the model and trying
to manage the interfaces between them,” said Yandik.
The team was advised by experts from the services, agencies and
contracting community in order to outline the initial model for
the procurement system, Yandik asserted. Around 150 individuals
contributed to the model, he said.
The ESG, in order to guide a successful program, must “look
at individual processes across the Defense Department, rather than
just [individual] service-oriented [functions],” said Yandik.
This means that all functions must be taken into account.
“We have put the emphasis on jointness,” said Defense
Secretary William S. Cohen, in a recent statement. That means that
the Pentagon is trying to establish a department-wide system.
So far, the DCMA-DFAS team has completed an end-to-end process
model and system maps and a strategic implementation plan.
Interfaces
Now it must build a detailed implementation plan, develop and test
electronic interfaces and implement those interfaces throughout
all the services and defense agencies, said Yandik.
The strategic implementation plan maps out how the system is to
be put into use. It contains system maps that depict the flow of
information.
The system maps identify 23 functional communities involved in
the process, said Yandik. “That could [include] a buyer. It
could be someone who is receiving an item, a payment clerk, industry,
an auditor [or] and approving official,” he said. These communities
are split over 28 systems or databases.
But the current model includes 220 interfaces. If a user performs
one transaction or one payment, he may only need five or 10 of those
interfaces, said Yandik. “But if I’m going to do a major
weapon system buy, and I’m going to have a long-time development
contract with many, many deliverables and many, many payments being
made, that’s probably going to involve a lot more of those
interfaces.”
Some of the interfaces are already compliant with the system, said
Yandik. But “we’re not going to get to where we want
to be until March 2004. ... It’s going to take us a little
while to get there, because we are really dependent on the development
of systems [that will be featured in the final model] to add the
functionality that we need, and to also deploy these things across
the department.”
De Leon, in a memo to the service and agency chiefs, said the ESG
will “consist of senior level representation from all functional
communities included in the procurement process.”
They are to update him on the implementation’s progress every
90 days. ESG is chaired by the Defense Department deputy chief information
officer. IPT also will include users of the system. It will report
to ESG as directed and is co-chaired by DCMA and DFAS.
“What we’ve built is a vision of how we want to share
data in the future,” said Yandik. “It’s evolutionary
in nature. ... The biggest challenge we have is that this is a [department-wide]
activity to make this work. It’s not just one service or agency
leading this thing. It’s going to take the coordination of
the entire department to make it happen.
“We think we’ve done the easy part. We’ve built
the model. We’ve built the plans to get there. The hard part
is going to be implementing it.”
Yandik said the establishment of the ESG and IPT is “really
getting this thing started—to now implement the model that
we have.”