Business-to-Government E-Commerce Procurement: Business Models, E-Mails, and Special Groups

Article excerpt

In 1993, the National Performance Review, led by Vice President Al Gore, investigated the entire procurement process and issued a report, "Reinventing Federal Procurement" [http://www.npr.gov/library/nprrpt/annrpt/sysrpt93/reinven.html]. The conclusions of the National Performance Review have served as a blueprint for changes implemented across the entire federal procurement culture and process. Fundamental changes included the introduction of business principles, e-commerce business models, and Web-based technology to federal procurement opportunities. The federal government has long tried to widen access to procurement offerings by encouraging women entrepreneurs, minorities, and small businesses to participate in the procurement process. New laws, new executive orders, and new electronic tools have expanded the opportunities for small businesses to take advantage of federal procurement dollars.

The National Performance Review's report highlighted some problems. Excessive regulations have made doing business with the federal government a cumbersome and trying exercise. The Defense Department has at least 889 laws under which it manages its procurement. The FAR (Federal Acquisition Regulations) alone is 1,600 pages long, not counting another 2,900 supplemental pages of agency-specific procurement regulations. Out-of-date bureaucratic rules stifle innovation and make delivery of goods and services designed to help the government meet the needs of its citizens difficult if not impossible. The authors of the report emphasized that the business-as-usual approach to federal procurement must end and new innovative goals and models must be embraced to change the status quo.

The new e-procurement system embraces business principles and models that emphasize strong customer service, less bureaucracy, value for the taxpayers' hard-earned dollars, a cost-effective system driven by technology and Web commerce, and the willingness to implement a new and innovative procurement system that challenges the previous ways the federal government did business with business.

Adapting E-Commerce

Business Models to Federal Procurement

The Federal Electronic Acquisition Team issued a final report in 1994, entitled "Streamlining Procurement through Electronic Commerce," that called for a new "business model" approach to federal procurement. The report concluded that "we must adopt a process view of all the acquisition elements, cross traditional boundaries, and manage the entire operational flow from start to finish. In so doing we seek to enhance our customer relationships, achieve leverage in the marketplace, reduce costs and the need to retain large inventories, and obtain faster and more reliable deliveries of material and services" [http://www.arnet.gov/ecapmo/flnal/chapter1.htm#Case].

Drawing heavily from the experience of manufacturing and industry, the Federal Electronic Acquisition Team thoroughly endorsed the application of e-comrnerce business models to federal procurement. Why use electronic commerce for models? The report concludes that the application of computer-based technologies (e-mail, electronic data interchange, the Web, electronic funds transfer, electronic benefits transfer, electronic catalogs, credit cards, smart cards, etc.) "increase[s] productivity by lowering costs, reducing lead time, and improving communication time." Businesses, both large and small, have seen the advantage to utilizing computer-based technologies in the daily workflow. The federal government "must now create an environment that takes advantage of EC technology" [http://www.arnet.gov/ecapmo/final/chapter2.htm#Why]. After 6 years, the goals, guidelines, and discussions have led to a variety of efforts to implement the recommendations of the National Performance Review and the Federal Electronic Ac quisition Team.

More and more federal e-commerce sites have emerged for defense and civilian executive branch agencies. …