In 1993, President Clinton issued a memorandum entitled “Streamlining Procurement Through Electronic Commerce,” which called for establishment of a “complete government-wide implementation of electronic commerce for appropriate federal purchases to the maximum extent possible” by January 1997.
The Federal Acquisition Streamlining Act (FASA) is a law which was enacted in 1994.This Act called for the development of a Federal Acquisition Computer Network (FACNET) for automating the procurement process.
FACNET was to be the preferred means for conducting government purchases above the $2,500 micro-purchase limit and below the $100,000 simplified acquisition threshold. The law set a goal: the government was to utilize FACNET to purchase more than 75 percent of its goods and services within these dollar limits by 2000.
FACNET’s fate was sealed when the 1998 Defense Authorization Act removed this statutory goal. The law also now says that agencies are free to use other electronic contracting means, such as agency Web sites.
How it Works
Federal procurement offices still using FACNET send solicitations and other electronic information to a supporting gateway. The gateway then processes the information and transmits it to Network Entry Points (NEPs) located in Columbus, Ohio and Ogden, Utah. The NEPs then transmit the solicitation to Value Added Networks (VANs), which are third-party service providers. The VANs provide their customers — i.e., vendors — access to the solicitations. Vendors then respond electronically, with the quotes returning through the VANs, through the NEPs, through the gateway, and back to the procurement office.
FACNET is an Electronic Data Interchange (EDI) system. Standards for EDI were developed by the American National Standards Institute (ANSI), the coordinator and clearinghouse for national standards in the United States, and the Data Interchange Standards Association (DISA). Each EDI business document, such as a request for quotation or a purchase order, is transmitted electronically in the form of a numbered transaction set prepared in accordance with the ANSI X12 standard format.
Beyond the statutory factors mentioned above, FACNET’s relative failure was due to factors that include:
- VANs tended to cost more money than vendors wanted to pay.
- There were some technical problems involving lost quotes.
- Government buyers often felt overwhelmed by the number of quotes they received.
A sign of where FACNET is headed: The federal government once funded an entire well-staffed system of regional offices in support of FACNET. These were called Electronic Commerce Resource Centers (ECRCs). There were 17 of them in various locations throughout the country. They’re gone now.
How to Get Started
In asking whether or not your company should begin receiving FACNET quotes, first check current activity in your particular product area. If the activity is high, then perhaps it’s worth subscribing to a VAN. Product areas that continue to be well represented include medical supplies and electronic parts.
Some VANs, such as Loren Data, http://www.ld.com, make signing up rather painless. You can try for one month for free, just to see if FACNET is working for you. And another nice thing about Loren Data: you don’t need to install software. You just need an Internet connection. All the activity takes place through your browser.
In selecting a VAN, it is important, as Loren Data points out, to make sure that you have access to all the RFQs available via EDI. Be certain the VAN you choose is DOD-certified and also connected to the Defense Automatic Addressing System Center (DAASC). According to Loren Data, RFQs coming through DAASC now exceed the number coming through FACNET.
(Includes FACNET solicitation information.)
- List of certified VANs
- Loren Data
- “Federal Acquisition Act Update: The New Regulations,”
by Nancy Dix (Thorough overview, but a bit out of date now.)