After nearly a decade of planning and development, the agency that handles most of the military’s purchasing is beginning to deploy a new, enterprisewide contract writing and administration system.
The development of a single end-to-end procurement platform was a significant undertaking for the Defense Logistics Agency, if only because of the scope of the agency’s operations. DLA processes nearly 11,000 contract actions per day, has more warehouse space than almost any organization in the world (the only exceptions are UPS and FedEx), and the agency would rank 51st on the Fortune 500 list if it were a private company, agency officials say.
DLA officials previewed the rollout of EProcurement in a webinar Wednesday hosted by GovExec. The agency plans to have the system in the hands of all 4,000 of its users for testing and evaluation by July. They estimate that by implementing it, they will save more than $200 million and will break even on the system within 10 years.
The agency needed to undertake the major IT upgrade because its legacy systems, which included paper and pen in some cases, were not able to scale up to meet new agency missions such as responsibility for depot-level repairable goods and the use of more complex contracting vehicles.
“Those systems are becoming obsolete and difficult to maintain,” said. Col. Mike Claffey, a special assistant for procurement programs at DLA. “We will now be able to provide those thousands of procurement users the ability to use various contract types other than firm fixed-price. From the standpoint of the ability and the flexibility, the new system has the ability to support various pricing structures and contract types, and it becomes part of the portfolio or toolkit that a buyer or contracting officer will have at their disposal.”
EProcurement, which is based on commercial software developed by SAP, will integrate with the agency’s larger enterprise resource management system. Claffey said DLA was the first component of DoD to put the entire organization onto one single contract administration system, which will handle the tasks of soliciting bids, getting the quotes back from vendors, evaluating the offers, making the actual award, and everything in between.
Bob Foster, DLA’s acting deputy director for information operations, said the system will let them operate more efficiently by having a complete picture of their procurement operations around the world.
“We try to project what soldiers, sailors, airmen are going to need in advance of them actually asking for it,” he said. “When we talk demand planning, when they step up and say they need something, we want to be able to say we anticipated you’d need that and we’ve moved it forward and positioned it in country. The last thing we want to say is that they’re going to have to sit around and wait while we procure something. This automated system has allowed us to increase our demand planning accuracy to better project what they need.”
Foster said the system also would let DLA look at its procurements retrospectively.
“How effective were we at procuring something?” he said. “Are we in fact being good stewards of the government’s dollar? Are we acquiring best value? We’ll be able to continually go out there in the marketplace and assess what we’re paying versus the civilian marketplace.”
DLA is deploying and testing EProcurement in several increments. Its third release will be in the hands of users by this summer, and the agency expects it to be fully deployed by 2013.
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