Military outlines e-business battle plan

WASHINGTON, D.C. - Following a year-long review, the Department of Defense last week outlined its plan to improve e-commerce with suppliers by coordinating more closely with industry, as well as radically altering internal technology and accounting practices.

Speaking at last week's e-Gov conference in Washington, Defense Department officials said they intend to establish the internal Electronic Business Board of Directors that would be responsible for coordinating e-commerce activities across the U.S. Army, Navy, Air Force and other agencies. In addition, the Defense Department wants its traditional department chief information officers to play a stronger role in setting e-business policies, perhaps by appointing e-commerce managers to be "ruthless change agents" to shake up operations.

"For e-business, the most successful departments in the military had someone who was a ruthless hands-on change agent who didn't care about making friends," said Evelyn DePalma, chief of the Defense Information Systems Agency's technology team spearheading the Pentagon e-commerce reform effort. "It's mostly men," she added. "But that doesn't mean women can't fill that role."

The Defense Department team not only visited defense agencies, but met extensively with industry suppliers, including technology suppliers Cisco, Oracle, Unisys, Microsoft and EDS, as well as equipment suppliers such as Lockheed Martin, TRW and Boeing, to collect ideas for improving e-commerce.

This joint defense and industry effort culminated in a set of recommendations disclosed last week. They include the goal of establishing the Electronic Business Board of Directors, something likely to be accomplished by December. This board will try to coordinate e-commerce activities across the military as well as consult with an industry counterpart to be called the EB Industry Panel.

The military also wants to promote new methods of doing business by rewarding its workers in successful e-commerce projects that result in savings or efficiency. Traditionally, accounting rules don't allow savings to be allotted as bonuses; in fact, traditional practices tend to discourage savings at all, said several Defense Department personnel involved in the e-commerce review.

However, the Defense Department will have to buck bureaucratic currents to turn its battleship around in the waters of e-commerce.

Accommodating some of the goals outlined last week will probably require changes to the military's procurement rules, known as the "5000 Series."This may take at least six months to accomplish.

Otto Guenther, former Army CIO and now head of Computer Associates' federal division, commented that the military lacks the kind of e-commerce manager position that is becoming the norm in private sector organizations.

"This is an acknowledgement from them that the world has changed, particularly as involves ordering via the Web, [and] that they need to know how to leverage off-the-shelf software better," Guenther said.

Although the Defense Department last week had a humble attitude about e-commerce, in truth the military is hardly naive about it, having used older technologies such as Electronic Data Interchange for decades.

The military also has been an early pioneer in electronic malls that can be used to order supplies. The Army and Navy are also testing some of the newest forms of procurement, such as reverse auctions. At Fort Monmouth, N.J., for example, the Army's Communications and Electronics Command is piloting the use of an online auction site that lets Army suppliers dynamically bid against each other. The traditional bidding method would have been paper-based or by phone.

The auction site, based on technology from Moai and Frictionless Commerce, has so far been used to purchase secure encryption-capable fax machines and IBM ThinkPads from government-registered suppliers bidding on small contracts, said project director Edward Elgart.

Comtech Federal won the ThinkPad bidding battle against Micro Warehouse and Daley Computers. The winning bid was $3,280 for a computer that listed for $7,000 on the government contract known as the GSA Schedule.

"We're trying to establish a proof of principle here with this pilot, but it looks like online bidding may result in lower prices," said Elgart.o