Pentagon to Field Paperless Procurement System in '04.

• Author: Kutner, Joshua A.

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...