EDI helps agencies move POs

should easily be able to automate 85 percent of our invoicing,” GSA’s Ed McCay

The General Services Administration’s Federal Supply Service receives
up to 3,000 purchase orders a day at its Heartland Finance Center in Kansas City, Mo.

“There is no way we could handle that many purchase orders” if some did not
arrive electronically, said Ed McCay, project manager for Fedpay, the Federal Supply
Service Payment System.

At present, less than a third of the 50,000 invoices processed each month come in
electronically. The process would be faster if more invoices came in electronically, GSA
officials said.

“We should easily be able to automate 85 percent of our invoicing,” McCay

That is Heartland’s goal for the year. As an incentive, companies that invoice
through Fedpay will receive payment within 10 days—not the standard 30 days for paper

Although FSS is preparing a Web interface for vendors to submit express invoices, most
probably will come through electronic data interchange. EDI requires an investment in time
and money, but it still is the most efficient way to do business for the top vendors that
submit 600 or more invoices each month, GSA officials said.

The Energy Department also is touting an EDI purchasing system linked to eight
value-added networks. EC-Web now is operating at DOE headquarters and will be rolled
out to other DOE sites around the country.

DOE also wants to give it away. “We’re offering it free to anyone who
wants to use it,” said Stephen D. Mournighan, director of the Office of Management

Despite some government trading partners’ reluctance to pay a value-added network
provider to translate and transmit data in the EDI X12 standard format, Mournighan is
enthusiastic about EC-Web.  “We’ve got a system that works, and if you want
it, we’ll give it to you,” he said.

McCay and Mournighan spoke at a GSA conference on best practices for electronic
commerce, held last month in Washington.

Many case histories at earlier best-practices conferences concentrated on moving toward
open EC over the Internet or intranets, but EDI is still the most efficient way of
automating large numbers of transactions, they said.

Fedpay, established in 1986, is now in its third version. Last year GSA moved it from a
mainframe to an IBM RS/6000 Model R40 server in Beltsville, Md.

Government buyers use WinFrame software from Citrix Systems Inc. of Fort Lauderdale,
Fla., to access the Fedpay system without needing any additional client software.

GSA employees access Fedpay from the GSA intranet.

Access from outside GSA is via a Sprint Corp. network; the X12 translation is done at
the gateway. Purchase orders reside in an Oracle Corp. database.

When a vendor invoice arrives electronically, it automatically matches with the
purchase order to generate payment by electronic funds transfer.

Because EDI’s primary benefit is to the receiver, many businesses that receive
electronic purchase orders through Fedpay have not invested in the technology to submit
their invoices electronically.

“There was no incentive,” McCay said. But now the vendors have an incentive;
FSS set up net 10-day payment terms last month.

McCay said the top 50 vendors generate 60 percent of Heartland’s invoices. They
will be encouraged to increase their use of EDI, he said.

Another 200 vendors generate 24 percent of the invoices. Those companies will be
encouraged to use the new Internet interface. Through a Web page, they can access
Fedpay’s purchase order database and submit express invoices.

The process is more labor-intensive than EDI but requires no investment and will let
small companies qualify for the 10-day net payment terms.

DOE’s EC-Web uses the department’s GATEC software on a hub at Lawrence
Livermore National Laboratory to link to several VANs through a gateway. The VANs have
more than 4,000 vendor customers. The gateway, accessed over the Web, does EDI translation
of electronic solicitations, quotes, awards and status queries.

Mournighan acknowledged that not all vendors want to pay a VAN provider for access to
DOE’s system. But he said the VAN providers unify interfaces and could attract
more vendors to EC-Web. 


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