E-Commerce: Industry-Government Dialogue Is Crucial


Guest Opinion Robert Sturm & Christopher Yukins

E-Commerce: Industry-Government
Dialogue Is Crucial

The federal government recently issued two important reports that broadly outline how it should proceed in electronic commerce.

Issued by the Office of Federal Procurement Policy and the Electronic Processes Initiatives Committee (EPIC) of the President's Management Council, the reports stopped short of prescribing any specific solutions. But they did mark the first step in the procurement policy office's new leadership role, created by Congress through legislation last year.

Taking that next step - implementing governmentwide solutions in electronic commerce - will require more work and broader cooperation between government and industry.

Over the past several years, the Office of Federal Procurement Policy, part of the Office of Management and Budget, has emerged as a guiding force in the Clinton administration's efforts to re-engineer the federal procurement process. And electronic commerce plays a central role in that process. For its part, EPIC serves a critical coordinating position within the government in formulating policy on electronic commerce.

The government's first serious foray into electronic commerce came with the Federal Acquisition Streamlining Act of 1994. That act revolutionized the federal procurement process, in part by establishing the Federal Acquisition Computer Network (FACNET). Unfortunately, FACNET proved a failure. Its architecture was a closed, proprietary system that required vendors to use expensive (and sometimes unreliable) closed networks to communicate with the government.

The government's recent report, "An Assessment of Current Electronic Commerce Activity in Procurement," found there have been failures in the government electronic commerce effort. It acknowledged, for example, that FACNET's high-cost, national architecture was ill-suited to the low-dollar, local transactions it was supposed to accommodate. The report also noted, however, that Electronic Data Interchange, the electronic business forms transferred across FACNET, will be a useful tool to electronic commerce even outside the FACNET architecture.

Recognizing FACNET was a failure and had systemic problems, Congress passed legislation last year that made it far easier for agencies to avoid using FACNET. Many believe FACNET will wither rapidly as a result of that legislative reform. The 1997 legislation also strengthened procurement policy office's role in federal electronic commerce.

The second report, "Electronic Commerce for Buyers and Sellers: A Strategic Plan for Electronic Federal Purchasing and Payment," is potentially more important than the first. In theory, this report was to map out a strategic plan for federal electronic commerce. In practice, though, the report focused more on establishing processes for reform, outlining these seven guiding principles:

As the recent reports make clear, the government is profoundly reluctant to stride ahead of the marketplace in devising electronic commerce solutions. It would far prefer to use soundly tested commercial solutions.

Through continued dialogue with key industry groups, the government can identify the best practices that have evolved in the commercial sector. Government then can share in the tremendous benefits electronic commerce already is bringing to the commercial marketplace.

In the coming year, it will be important for industry to share with government its insights on the electronic commerce solutions that have - and have not - succeeded in the commercial marketplace.

Robert Sturm is vice president of business development at Digital Commerce Corp., Reston, Va. Christopher Yukins is a senior attorney specializing in government contracts and litigation at Holland & Knight LLP, Washington. The reports are available at policyworks.gov/org/main/me/epic/opendocs.

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