Defense Says Bye Bye to EDI
By Bob Brewin | Wednesday, August 15, 2007 | 11:18 AM
By Bob Brewin | Wednesday, August 15, 2007 | 11:18 AM
The Defense Department plans to stop using commercial electronic data interchange (EDI) systems to process payments and instead will require contactors to use the Department’s Web-based Wide Area Workflow - Receipt and Acceptance system.
Defense wrote in an Aug. 14 Federal Register notice that neither the American National Standards Institute X12 EDI nor the Web Invoicing System cannot process all Defense contract payment requests and cannot be made available to all government offices and organizations.
Wide Area Work Flow is the only system that can process all payment types. According to a fact sheet from the Defense Business Transformation Agency, it uses a virtual folder that contains the three documents required to pay a contractor: the contract, the invoice and the receiving report.
The Wide Are Workflow helps eliminate lots of paper documents, which also can be misplaced, and compresses the contract payment process from weeks to days or minutes, according to the fact sheet.
According to the Federal Register notice, the change in Defense Federal Acquisition Regulations requiring use of Wide Area Workflow will require about 1,000 small businesses to switch to the system – a relatively low number compared with the 20,000 small companies already using it. (Contracting officers can allow the use of other payment systems if they choose.)
Defense said it will take comments on the proposed rule change until Oct. 15. The department said it anticipates that the use of Wide Area Workflow will fully automate its payment process, significantly improve the timeliness of payments and reduce interest charges on late payments.
In 2004, Defense had $206 billion in contract payments subject to the Prompt Payment Act, according to a May 2006 Government Accountability Office report. Out of a pool of some $24 billion in payments the GAO studied, Defense was late in paying an average of 10 percent of the payments to large vendors, while late payments to small vendors ran about 14.5 percent, according to the report.
Since it takes only one hour to learn how to use Wide Area Workflow, according to the the Federal Register notice, it seems the new change in rules will be a boon to small vendors, even though I have yet to encounter any computer program that can be mastered in an hour.
Comments
First, the title conveys a misinterpretation on the part of the author. The proposed WAWF rule does not end the use of EDI X12 Transaction sets in DoD. Rather it simply removes the direct submission of EDI to MOCAS. WAWF has since its inception as a pilot in 1999 processed X12 EDI transaction sets received through the Department’s Electronic Commerce Processing Node (ECPN) which was subsequently renamed DoD Electronic Business Exchange (DEBX) and now known as Global Exchange (GEX). In August 2007, 357,136 documents were processed through WAWF. Of that number 268,223 were submitted by web interactive, 63,142 by EDI through GEX, and 25,771 direct secure FTP to the application. All were transmitted at the conclusion of processing by way of EDI transaction sets through GEX to the destination accounts payable, accounting, property, or logistics systems.
Bill | Friday, November 02, 2007 | 04:07 PMDid the DoD just have a mass lay-off? Between WAWF, and the Contractor Manpower Reporting mandate, our cost to do business with this faction has signifigantly increased. Since private industry seems to be doing more governmental administrative work, taxes should go down for all. Right?
B | Thursday, August 23, 2007 | 10:29 AMWhether it takes two to three hours to learn or just one hour to learn, they're not taking into account that there are still Mom and Pop businesses who do maybe one or two contracts with the government *ever*. Firms that we need more than they need us - and some of these firms don't have fast internet access, or computer skills. If they're doing one $3,500 contract a year with us, figuring a 5% profit, and they have to spend at least an hour figuring out how to update their CCR registration and another hour or two figuring out how to invoice the thing, pretty soon it's costing them money to sell to us. I had to buy a gravestone once (don't ask why), and for a $40 profit, the firm ended up spending 10 hours trying to figure out the whole CCR/Duns system (not to mention the taxpayer time I had to spend trying to guide them through it.) There needs to be a safety valve - making WAWF mandatory goes against everything that Commercial Practices was about (adapting to the marketplace, rather than making them adapt to us - and charging us an arm and leg for it.)
Deci Reynolds | Tuesday, August 21, 2007 | 10:36 AMFrom this contracting officer's perspective, DFAS has become the proverbial 600 pound gorilla; always permitted to do what it thinks best even if it's to the detriment to those they are purportedly serving. My agency has adopted a very beneficial contract payment process via the Government Purchase Card (GPC). Both our contractors and employees are thrilled with the fast payment and even more thrilled with the reduction of DFAS interaction which has become increasingly more painful in recent years. With the inception of yet another alleged IT improvement, our anticipation of increased efficiency on the part of DFAS is understandably reserved.
Ask DFAS how long it takes them to process the payment once they receive it. They ask from the bill payer 20 days of the 30 days of the 30 day "Prompt Payment Act" to pay the bill. That does not seem prompt to me.
jcrandall | Tuesday, August 21, 2007 | 07:26 AMThe fact is entering invoices manually into a web portal or Wide area workflow and EDI pose great cost and time for suppliers. DFAS has suppliers ranging from low volume mom and pop to large global suppliers and since there are no industry standards in the world all you seem to be doing is making all suppliers accommodate you.
The Dept of Veterans is in the process of implementing a service solution that will work with each and every supplier one on one to take any feed from any billing system in the world- down to Quick Books or a print file to feed a wide area workflow. This means that this hired service is like a giant mapper or electronic mailman service provider that takes the work off the supplier by accommodating their environment so they can operate business as usual. This service is VAT and IRS compliant to use their rendered image for audits as well (in around 65 countries).
So the statement that DFAS makes "Wide Area Work Flow is the only system that can process all payment types" is not true. The service provider OB10 can deliver all formats from suppliers directly into the Wide area workflow to take the burden off the suppliers!!
IOMA Senior AP Consultant
FYI- Global companies such as Apple, Microsoft, GM, P&G, Agilent, HP and many more have wide area workflows, started with EDI, went to workflow submission and didn't hit their paperless goals until OB10 electronic mailman services were implemented.
It takes contractors between 2 and 6 hours to learn to use WAWF for their specific contracts and purposes. This is more or less depending upon their level of sophistication with the other parts of their contract(s) (like contract line item structure, type of invoicing required, delivery terms, etc). Thus, the WAWF system assumes an existing understanding of basic DoD contracting processes, and a good understanding of the specific contract(s) involved. The online computer based training materials are excellent, and there is a "practice" website for contractors to experiment with the system. For contractors who are not confident in their capabilities in this regard, several organizations have been offering free training both on-site at contractor facilities and in some rented space (i.e. "CompUSA" stores) for about 3 years.
JTPalmer | Thursday, August 16, 2007 | 01:34 PMWhile I am a supporter of electronic invoicing, at its inception Wide Area Workflow (WAWF) had some issues which I am not sure have been addressed. When WAWF was released, it could not process invoices for grants and cooperative agreements. Also, it was only authorized for use by contractors under DCAA audit cognizance which excluded many universities who are under DHHS audit cognizance. I wonder if these issues have been addressed or will Contracting Officers be required to perform labor-intensive workarounds.
The Iron Horse | Thursday, August 16, 2007 | 07:27 AMABOUT THIS BLOG
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