Pentagon's EMall strategy questioned

The Defense Department, in a hurry to adopt commercial best-business practices,

in 1998 established an online mall for purchasing supplies despite significant

shortcomings in the system that made the military reluctant to use it.

An internal Pentagon Inspector General report, finalized in December 1999

as DOD and the rest of the government struggled with last-minute Year 2000

preparations, questioned the "appropriateness" of DOD's decision to start

EMall on Jan. 29, 1998.

According to the report, "DOD Electronic Mall Implementation Planning,"

the decision to move forward with the EMall was made despite known barriers

to the system's use, including the inability of legacy systems to interface

with the EMall, duplication of General Services Administration supply programs,

inadequate comparison shopping capabilities, the inability to ship EMall

products directly to customers, lack of authorization control on orders

and slow response time for searching and ordering.

The problems were significant enough that the Army did not approve its organizations

to use the EMall as a supply source, according to the report. Likewise,

the Air Force expressed reluctance to allow its organizations to use the

EMall and found it faster to buy items locally, the report stated. The Navy

and Marine Corps also complained of similar problems, according to the report.

The report also stated that there was no way for DOD organizations to know

if they were paying bank credit card fees twice because vendors had not

informed buyers if bank charges were included in the price of their products.

DOD established the EMall within the Defense Logistics Agency's Joint Electronic

Commerce Program Office as a single Defensewide point of entry for all DOD

electronic purchasing catalogs. However, studies conducted months before

the system was placed into operation warned EMall managers that "DLA should

be very certain that all facets of the system are fully operational." Another

study warned, "It takes 30 years to get a customer and 30 seconds to lose

one. The EMall must be as near perfect as possible before 100 percent market

introduction."

In a Feb. 7 memorandum to the IG, DLA director Army Lt. Gen. Henry T. Glisson

argued that extensive work had been completed on the EMall since the IG

audit was conducted. "The decision to go online before all issues are resolved

is a program management judgment," the letter stated, adding that any delay

would have deprived DOD of EMall's benefits. "It is unrealistic to think

that all problems could have been resolved in advance of implementation,

especially in light of the rapidly changing environment in which the EMall

was fielded."

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