Look, No Paper

Look, No Paper

Capt. Kurt R. Huff says he expects SeaPort to save the Navy $250 million over five years.

Capt. Kurt R. Huff, deputy commander of contracts for the Naval Sea Systems Command, has been looking for a more efficient procurement process as long as he can remember.

On the brink of retirement, he says his search is over.

Under a four-year, $2.8 million contract with Commerce One Inc. of Pleasanton, Calif., the command has deployed a procurement automation application, dubbed SeaPort. It cuts the time it takes Huff's staff to send requests for proposals, receive bids and award contracts, as well as manage the contractors.

'This has given us the means to make innovations,' Huff said. 'Without the procurement tool it would be unmanageable. My commitment to my boss was, we would save him $250 million over five years.'

SeaPort e-mails the RFPs, evaluates the bids, sends out confirmations and makes payments. There's no paper pushed and little if any face-to-face interaction among the NAVSEA procurement teams and vendors.

In its first five months, SeaPort has awarded $10 million in professional services contracts. Huff estimated it takes about a week to contract for parts for ships and submarines that used to take months to procure.

'We are going to achieve significant savings, and ensure faster and cheaper deliveries,' Huff said. 'Can I get rid of one or two contract specialists and have a couple hundred thousand bucks? That's a relatively small aspect of how we're going to save money.'

Huff expects to award $1 billion in electronically negotiated contracts by next April and to save about 5.3 percent in the next three years compared with the paper system.

Before, the procurement office printed and mailed RFPs to about 80 primes and subcontractors. The evaluation team would read hundreds of paper documents, select the winning bid, and send back the guidelines and work orders.

Now the electronic system processes everything, and only 21 contractors receive RFPs. Before NAVSEA settled on the 21, Huff said, it might have been paying several contractors to do the same type of work. Now the 21 primes find their subcontractors, and NAVSEA doesn't have to send out so many RFPs or deal with so many bidders.

SeaPort routes Navy procurements by e-mail

'In the past, we had 350 contract vehicles,' Huff said. 'Just reducing that number is a significant savings.'

About a dozen financial and legal officials access the system via their Web browsers. So, Huff said, 'They could be sitting on a beach in Florida.'

Procurement officers can cut and paste and modify existing task orders to send out new RFPs. 'We've not killed any trees yet,' Huff said. 'An e-mail goes out concurrently to the 21 vendors that there is a requirement they might bid on.'

After an RFP has traveled through the appropriate channels, it goes to the Exostar.com electronic marketplace, operated by BAE Systems of Arlington, Va., Boeing Co., Lockheed Martin Corp. and Raytheon Co. The public exchange lets vendors bid on projects from various government entities.

'We've automated the entire process,' Huff said. 'We don't have to coordinate meetings,' because procurement officials and vendors can log on anywhere in the world.

Leave the driving to them

Instead of creating guidelines for vendors, NAVSEA simply hands over a check and expects the contractor to accomplish the task by whatever means it sees fit.

'We're shifting our business focus,' Huff said, to fixed-price, performance-based contracting.

'[NAVSEA] controls the look and feel of the system, and they control strategy,' said Max Peterson, president of Commerce One. 'We design, implement and run it for them.'

Commerce One's Enterprise Buyer and Auction Services applications run under Microsoft Windows or Sun Solaris and can use either Microsoft SQL Server or Oracle databases.

NAVSEA runs both apps under Windows 2000 on Compaq ProLiant servers with the SQL Server database management system, at a Commerce One hosting site in Laurel, Md.

Each transaction is secured via a public-key infrastructure and 128-bit encryption. All the information transmitted is backed up on a NAVSEA server.

Computer Sciences Corp. modified NAVSEA's old back-end systems to fit the new software.

'We understood the NAVSEA rules, tools and processes, and we were kind of the integrator,' said Maurice Gauthier, a CSC vice president.

He said the new system runs new processes on old hardware.

'If you start tinkering you're asking for trouble,' Gauthier said. 'One of the requirements was that they didn't want to go through any significant training.'

Huff and NAVSEA received an award for SeaPort at the Navy's eBusiness Knowledge Fair in Washington last month.


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