The Defense Department is turning to the World Wide Web to expedite
a growing backlog of contract paperwork.
By establishing a paperless contracting system, powered by the
Internet, the Pentagon intends to save time and money, while speeding
up payments to contractors for their goods and services, according
to defense officials.
Common sense has played a major role in the development of such
tools, Pentagon officials have said time and time again. As advanced
technologies became available, and as information sharing capabilities
and the Internet expanded, it was only logical that U.S. government
agencies—the Defense Department being no exception—got
the most out of these innovations.
Today, the Pentagon uses several Web systems to interact with contractors.
These include the Web Invoicing System (WInS) and Wide Area Workflow
Receipts and Acceptance (WAWF-RA) . The Joint Electronic Commerce
Program Office (JECPO) and the Defense Finance and Accounting Service
(DFAS) work in conjunction to bring these technologies to bear.
National Defense recently was invited to visit the Defense Department’s
Paperless Contracting office, in Arlington, Va., to view live demonstrations
of the systems.
Diana L. Buttrey, DFAS program manager, led the WInS exhibition,
and said that DFAS has had the capability to do Web invoicing for
some time.
“Nobody’s been doing business with us for quite a few
years, but we’ve had the capability to do electronic invoicing
and some contracting for years,” said Buttrey. “We were
having a hard time getting our contracting community to come onboard
with electronic invoicing.”
First, the Defense Department adopted EDI, or electronic data interchange.
EDI is simply the exchange of information between two or more computers.
But initially, it was not the sensation Pentagon officials hoped
it would be.
“We actually started out with EDI,” said Buttrey. “We
were offering this capability to our vendors, but they weren’t
coming. ‘Build it, and they will come,’ doesn’t
always work.”
For the corporate giants, EDI was easy. But not so for small businesses.
“Our vendor base across DFAS is very diverse. We have small,
mom-and-pop shops. We have small other kinds of companies. We have
medium-size companies. We have medium-large companies. And we have
really large companies,” said Buttrey. “The large companies
did EDI without even blinking. ... And a lot of them do their own
EDI translation.”
There are more than 300,000 contractors that lobby for Pentagon
business, and their sizes and revenues vary significantly. EDI,
in the beginning, was not a healthy investment for many of the small
companies, because they could not afford a VAN, or value added network,
said Buttrey.
Web Invoicing System
“The VAN is sort of the conduit in the middle of EDI,”
she said. “... The situation was, for years, the large guys
came onboard, but we were really missing the majority of our vendors
by only offering EDI. Quite frankly, they couldn’t do it.
It cost too much to get the VAN involved—this guy in the middle
who did all this translation. And they would have to change their
systems. A lot of small guys don’t have systems. It was just
too costly and too lengthy a process for them.
“We ended up going to the Web,” said Buttrey. “And
we said, ‘OK, let’s offer the vendor some Web programs,
but still use our EDI capabilities at the back end,’ because
we didn’t really want to spend time redoing things that we
had already done. So our Web initiatives are taking advantage of
the back end that we already have available—the EDI feeds—which
was really cutting edge technology. When WInS was implemented, it
was one of the very first programs to actually use Web and EDI together.
It was right there, out there, on the edge. And even other federal
agencies are looking to DFAS [to see how we] did that.”
Previously, all invoices were submitted through the mail as hard
copies. This would cause payment delays because of mail time. But
it was not just postal delivery turnaround, said Buttrey. There
were increased delays, because these copies would sit in DFAS mailrooms
until they were sorted through. And that could be for long periods,
considering the magnitude of paper-flow that came in, she added.
In fact, DFAS handles 12 to 14 million invoices a year.
Hard-copy invoices face the potential danger of getting lost in
the mail. Also, there is more opportunity for error with hard copies,
because the information has to be keyed into the system.
WInS allows contractors to enter information into vouchers and
invoices on the Web, so that payments may be made in a more timely
manner at no cost to the vendors. The no-cost element is particularly
appealing to the small and medium size companies that could not
afford direct EDI, said Buttrey.
WInS offers invoice applications that are already loaded into the
system. The contractor just needs to insert the appropriate data
into the designated fields.
Data fields may require items such as contract numbers, delivery
order numbers, and money totals to name a few. And mandatory fields
are shaded so that users know that their invoices cannot be submitted
until a figure is entered.
Today, payments are issued on an average of four days after the
initial invoice is submitted.
Other benefits of Web-based invoicing include cost savings, improved
data accuracy and no mail time, said Buttrey.
The contractors do not have to learn specific EDI terminology or
formats. They just enter the data and submit, so there is no chance
for re-key entry errors. And the vendor does not need any specific
software other than a Web browser, such as Netscape or Microsoft
Explorer.
Invoices include the Mechanization of Contract Administration Services
(MOCAS), the Standard Automated Material Management System (SAMMS)
and the Standard Accounting and Reporting System (STARS).
MOCAS offers commercial invoices, public vouchers and progress
payments.
MOCAS and SAMMS also offer contractors with multiple contracts
the opportunity to submit batch files. Vendors send batch invoices
electronically, rather than mailing large batches of paperwork.
From May 1998 through July 31, 2000, WInS has received 3,574 requests
for MOCAS, 2,287 requests for SAMMS and 212 requests for STARS.
During that same period, the system processed more than 353,000
invoices and vouchers, which totaled more than $19.2 billion. Thirty-seven
vendors have exercised the batch file option.
Contractors can go to https://ecweb.dfas.mil and register for a
username and password to do business online with DFAS.
Wide Area Workflow
WAWF-RA takes WInS a step further by incorporating digital signatures
so that intended parties can receive reports and certified invoices.
The system is designed to reduce processing time to three days
by electronically entering a contract, receiving report, and the
invoice—three documents that used to be entered manually.
When an invoice is submitted by a vendor, an e-mail is sent immediately
to all appropriate parties to let them know it has been entered
into the system. This lets them know that the next action must be
taken.
For example, if Company A sends an invoice for 32 widgets purchased
by the Army Tank-Automotive and Armaments Command (TACOM), an e-mail
is sent to TACOM and DFAS to let them know that the invoice is in
the system. TACOM then verifies that it purchased the widgets, and
approves the invoice.
After the invoice is authorized, the next step is for DFAS to issue
payment. E-mails are continuously sent as transactions are made.
If the vendor wishes to offer a discount to a buyer, this also can
be included in the invoice.
WAWF-RA, currently is active at the Air Force Academy (seven users),
Fort Campbell (four users) and Hickam Air Force Base (14 users).
Soon, it will be deployed to more than 1,000 vendors and 200 quality
acceptance evaluators, said officials.
To date, WInS has received favorable reviews. It was awarded the
CIO Council’s 1999 prize for best information technology practice
in the federal government.
It also was named best Defense Department Web site in 1999, and
best electronic commerce team in 2000, at JECPO’s Defense
Department Electronic Commerce Day.
The next step for the Defense Department is to take these technologies
and incorporate them into a single exchange for all the military
services to use. The Defense Department hopes to have this system
ready by 2010.
Although it is not mandatory for contractors to use these systems,
it is highly encouraged.
As the Defense Department continues down the road of paperless
contracting, DFAS officials say the Pentagon most likely will not
award contracts to those vendors who do not have electronic invoicing
capabilities.