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| Subject: GSA's Federal Electronic Commerce Program Office | |
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Author: What is in store for the future? |
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Date Posted: 04:31:26 12/29/02 Sun In reply to: Mission Impossible 's message, "Midway through Mission Impossible 2 Ethan Hunt" on 04:28:26 12/29/02 Sun What is in store for the future? A number of enhancements to the purchase card technology are being pioneered as both the Government and private sector move forward with electronic commerce. Some of these are highlighted below. INTRAMALLS: The National Institutes of Health (NIH) has opened an "IntraMall," an on-line shopping mall that simplifies identification and ordering of goods and services from multiple vendors and maximizes the use of purchase cards. When the IntraMall first opened for use to the entire NIH campus in May 1998, there were 69 vendors and 21 stores open for immediate use. Since then the mall has grown to 112 vendors and 59 stores. Vendors of equipment and services that are purchased extensively by NIH use the organization's Intranet to display products and catalogues for on-line purchasing by employees. The greatest benefit of the IntraMall is the processing of orders under $2,500, those subject to the least amount of regulatory control. The on-line catalogues allow employees to electronically "shop" for items, searching by vendor name or product category and viewing multiple vendor catalogues at a glance. Once items are selected, they are placed in an electronic "shopping basket," which provides all of the pertinent ordering information to enable a purchase. The "shopping basket" is then transmitted through the agency intranet to the inbox of the authorized purchase card holder for the lab/branch/division. Once the card-holder agrees with the proposed order, electronic placement of the order can take place with no transaction costs to NIH or the vendors. Electronic confirmation of the delivery date, back orders, or any problems is attained instantly via e-mail. How has this impacted the volume of doing business through purchase cards ? NIH is currently conducting approximately 13,000 purchase card transactions, valued at $9 million dollars per month. Approximately 93% of the NIH non-contract related transactions are micropurchases, under $2,500. Purchase card spending is increasing at almost $600,000 per month. Recently, the National Cancer Institute, the largest of the 24 NIH Institutes, mandated that all purchases under $2,500 be done using purchase cards and citing the IntraMall as the preferred purchasing venue. What are the benefits? Expanded use of the purchase card through the Intramall has further simplified and streamlined the purchase card program. Ordering and payment on-line has resulted in further cost reduction. The Intramall automates ordering and budget tracking and enhances record keeping as well as providing effective management controls over procurement activities related to the purchase card use. The process reduces the number of invoices requiring payment as well as the fees involved in purchasing and invoicing costs. In a report before the Electronic Commerce "Best Practices" conference of the Chief Financial Officer Council at the General Services Administration in September 1998, NIH reported cost reductions ranging from $20.50 to $5 per order. Additionally, prompt payment of the purchase card invoices (3-day turnaround) increased discounts and reduced interest penalties. Another advantage is the even greater simplification of the purchasing process by on-line shopping. Staff can "shop around" and view technical specifications and pricing from a number of vendors on their desktop computers without having to leave the premises. This has been a tremendously popular feature at NIH, where researchers can quickly have access to laboratory equipment or tools in minutes without a significant disruption to their work. Having the products displayed through on-screen catalogues, with the ability to make authorized purchase card purchases through the Intranet, has provided an easy way to keep essential items in stock while also providing a time-saving way to view innovative and state-of-the-art products. The Intramall also has allowed for accurate, improved and guaranteed pricing from vendors through on-line competition and immediate availability to purchasers using the purchase card. Management controls were further enhanced through a user profile system that limited access and purchase card expenditures based on the various approval levels. Orders for restricted items, or those requiring further clearance (e.g. animals, radioactives) could be immediately flagged and electronically sent to the appropriate clearance level for review. Additionally, mandatory sources and GSA vendors were easily identified by blinking indicators on the screen. One other feature being developed is a direct link from the IntraMall to the bank issuing the purchase cards. The goal is to feed detailed transaction information from the ordering system (IntraMall) to the bank, for use with an automated reconciliation system. The system will match individual order and billing information data to provide an on-line, automated monthly account reconciliation capability. One final benefit reported by the NIH in the use of purchase card technology in the Intramall environment was an agreement for the card vendor to provide a 25-cent donation per order to the National Foundation of Biomedical Research for the NIH. From June through September, 1998 this amounted to $10,000. SMART CARDS: One of the most recent enhancements in purchase card technology is that of the smart card. A smart card is a wallet-sized plastic card containing a microprocessor that can interface with network terminal devices. The card is programmable, can carry data, can be used to identify the cardholder, and can be used for financial transactions and programs. The smart card was developed in a collaborative effort between CII-Honeywell-Bull and Motorola in March 1979. The first application was as a single function prepaid telephone card. Since then, a wide range of applications is evolving, including banking, retail payment, electronic purse, health, entertainment, travel, transit, college campus purchases, and citycards. Today, there are approximately 200,000 smart cards in use within the U.S. Federal Government. The Department of Defense Multi-Technology Automated Reader Card (MARC) is the most prevalent, although many other agencies are beginning to see the advantages of such cards. In September 1998, GSA opened a Smart Card Technology Center in partnership with the Navy Department to serve as an information resource and demonstration center to showcase smart card technology. This center enables Federal employees to see a variety of smart card applications, including soft drink vending machines, medical and dental equipment used by the Navy, security access, digital signatures, and biometrics (the use of body characteristics, such as fingerprints, for identification). GSA will also sponsor a Smart Card pilot program with its SmartPay vendor, Citibank. In May 1999, GSA and Citibank will issue smart cards that combine the following electronic commerce functions: payment, travel, government ID, local and remote authentication, phone security, electronic ticketing, and physical and logical access control. In addition to integrated circuit chip technology, the card will also include biometrics identification profiles. An area in which smart cards are being used successfully is in benefit transfers under such programs as Aid to Families with Dependent Children, Supplemental Security Income (SSI), Social Security, General Assistance, Unemployment, Energy Assistance, Federal Pensions, and Food Stamps. Provision of these benefits that smart cards are providing are better access, efficiency and accountability. States have assumed a lead role in this initiative, with smart card projects virtually across the country in the following areas: photo ID systems, electronic benefit transfers, toll collections, automatic vehicle identifications, security control systems, public transportation, food stamps, airport baggage security and access, fuel accountability, motor vehicle registration, and medical care benefits. The evolution of smart card applications requires attention to a number of management issues. These include a means to ensure interoperability of systems, cards, readers, and applications; security assurance for new applications and operations; compliance with Federal policies and rules; and a viable framework for agency implementation. These issues are now addressed under the auspices of a Federal Applications Management Board. (GSA Electronic Commerce Coordinators Card Service Application Management presentation, "The Future is in the Cards" February 5, 1998) How the Purchase Card Bridges to Smart Card Technology GSA's Federal Electronic Commerce Program Office is advancing the Administration's goal to use smart card-based technology to improve a wide range of business processes across government. The government's goal is to adopt a multi-application smart card that will support a wide range of government and agency-specific purposes. The new SmartPay contracts will address a wider range of services in addition to traditional card-based services. These may include ATM, travelers checks, and convenience checks. Additionally, contractors may offer new services such as smart cards, stored value cards, and other emerging technologies. The services available to agencies will vary according to the specific agency contract task orders. Through smart card technology, the Federal Government will empower employees to get their jobs done faster and more efficiently by performing multiple government functions electronically and securely. The Administration's goal is to use smart card-based systems to improve a wide range of government business processes and advance electronic commerce. In essence, this marks another step in the move from single use cards to multiple use smart cards as facilitated by the new SmartPay contract. [ Next Thread | Previous Thread | Next Message | Previous Message ] |