Even before the dot-coms raged onto the stock market, "e-business" was considered a key to success.
Online shopping hit the street in the mid-1990s, but it took the federal government a little more time to embrace paperless procurement. Bolstered by the "click-and-order" frenzy, federal managers dusted off the decades-old Paperwork Reduction Act and drafted guidance to implement the new Government Paperwork Elimination Act of 1998. Experts touted e-commerce as the panacea that would make federal procurement easier, faster and cheaper. Though there's been some progress, e-commerce hasn't lived up to the buzz — at least not yet.
In the past two years, the federal government has taken more of its business online, but the General Services Administration offers us a glimpse of the untapped potential. First, about half of the agency's $1 billion sales of warehoused equipment are electronic. Second, GSA Advantage racked up $125 million in fiscal 2000 — a bit more than 1 percent of the $8 billion in GSA schedule sales — with anticipated sales of $180 million for this fiscal year.
Federal employees aren't the only ones dragging their feet. According to recently released Census figures, consumers spent an estimated $25.8 billion buying online in 2000 — just 0.8 percent of the total $3.2 trillion in retail sales. Even so, the federal government needs to take the lead on e-commerce. Too often, federal buyers admit that although they "comparison shop" online, they use faxes or phone calls to close their deals. Such behavior won't help the government meet the GPEA deadline, now two years away, or meet President Bush's goals — hinted at in his budget — to encourage e-government and procurement reform.
Clearly the federal government can't kick its old buying habits cold turkey. But it should take incremental steps to reform them.
First, agencies need to modernize or replace systems that can't protect or execute online purchases. Second, managers must ensure that paper purchases are the solution of last resort. Third, inspectors and auditors must find a way to monitor paperless buys without requiring paper trails as evidence — something Defense Department employees routinely cite as a major obstacle to e-commerce.
In short, it's time for the federal government to stop making excuses and start making e-commerce a reality.