Boosting buying power
Not long ago, if Washington, D.C., employees wanted to buy so much as a box of pens, they had to wade through a paper-based process that often took weeks to complete. Since November, however, all 63 of the city’s agencies have been using a Web-based procurement system that automates purchasing and speeds most requests from requisition to supplier payment in a few days.
Implementing the system is the first phase of a wide-ranging Administrative Services Modernization Program (ASMP) that is expected to save the city $150 million by 2006. Subsequent phases will aim at human resources, payroll, budgeting and planning, and property management operations.
District leaders began planning the first leg of the ASMP in 2001. Dozens of agencies analyzed the procurement process and recommended improvements. “Typically, the system really bogged down for the small purchases,” says Sanford Lazar, director of key systems for the city’s Office of the Chief Technology Officer (OCTO). “We do about 11,000 to 15,000 transactions a year, and about 91 percent are under $100,000, and 86 percent are under $25,000. So we had huge resources tied up into processing low dollar-value purchases.”
The city wanted a computerized system that would process, track and analyze all purchases, and work with its existing general ledger and accounts payable system. “We made a decision early on to keep our current general ledger and accounts payable system,” Lazar says. “Even though it was an older system, we felt that it was giving the city excellent records, and we could get the reports we needed, so it didn’t justify the cost of replacing it.”
A selection committee consisting of the Office of Contracting and Procurement (OCP), the Office of the Chief Financial Officer (OCFO), the OCTO and a variety of district agencies evaluated software packages and eventually chose eProcurement software by Sunnyvale, Calif.-based Ariba and eAI software by Monrovia, Calif.-based SeeBeyond to connect with the general ledger system. Then, the committee contracted with Blue Bell, Pa.-based Unisys to integrate the purchasing software with the general ledger and accounts payable systems.
The implementation began in January 2003, and by July 21, OCP and OCTO were live on the Procurement Automated Support System (PASS). By Thanksgiving, 2,000 employees had been trained and all agencies were able to use the system.
Using PASS, authorized employees can search online catalogs and vendor lists, build requisitions online and submit them through the automated system. The new process includes checking the general ledger for available funds, notifying managers through e-mail to approve purchases, notifying OCP to issue RFPs or seek bids, encumbering funds from the general ledger and e-mailing purchase orders to vendors.
Throughout the process, employees can use PASS to see exactly what actions have been taken to complete a purchase. “There are audit trails for everything that’s done,” Lazar says. “Before, if you wanted to find out anything, it could take days or weeks to ferret through reports and consolidate information.”
Since its installation, the $6.5 million PASS has handled $500 million worth of transactions for goods and services and has simplified purchasing for all city departments. “You can make the case that, [previously,] people did miraculous jobs for us to buy anything, because it was so difficult,” Lazar says. “They didn’t have the tools to support their jobs, and now they do.”