What is EDI?

Electronic Data Interchange is the electronic transfer of business documents such as purchase orders, shipping notices and invoices using a standard format. It is an established technology that has been in use for over 20 years in many industries. A user must purchase software and communication services to get 'on line' with EDI, just as an internet user has to purchase these things to go 'on line'. At the end of 1994 there were over 80,000 active sites. Experts expect over 1 billion sites by the year 2000. EDI allows you to see how much business the government is doing in your field, and look up new requests for quotes in a program called 'Browser'. For companies just starting out with EDI, a subscription to a Value Added Network (VAN) can be purchased, allowing the company to receive current quotes and requirements for those quotes. A company cannot submit a bid through EDI without subscribing to this network. Buying the subscription is equivalent to buying an on-line service through the internet. Using a VAN is somewhat like going to an internet cafe and using their subscription.

Things EDI can do for your business:

1. Provides product information, availability and cost to EDI partners. EDI orders typically begin with frequently ordered products which often account for a majority of sales. Many times the supplier and end-user agree before hand on the specifications prices and estimated order-volumes.

2. Can reduce staff-time expenditures, lost sales, back orders and partial shipments.

3. Eliminates the printing of orders and invoices by customers and the data entry of these orders by suppliers. Once items have been shipped, the supplier sends the purchaser an EDI invoice. The purchaser then tells its bank to wire funds to the supplierís bank through electronic funds transfer (EFT).

4. Decreases the amount of inventory a company has to stock, saving capital costs, storage costs and time and expense of moving products.

5. Improves receiving. When a supplier sends an EDI placed order, it also sends an EDI advance ship notice including the items shipped, the carrier's name and expected delivery date.

To learn more about the Electronic Commerce Resource Center, or obtain a complete copy of those line items of the FASA implemented so far, contact Donna Kirkpatrick, Bremerton ECRC, (360) 405-5447. A quarterly newsletter called 'OnRamp' is published by the Bremerton ECRC. You can also read about ECRC's on their internet home page at URL: www.becrc.org

As of May, 1996, only some parts of the act have been implemented. Highlights from these parts include:

• Establishes a statutory preference for commercial items.
• Requires that, to the maximum extent practicable, contract requirements and market research should facilitate the use of commercial items.
• Reduces impediments to the purchase of commercial items by exempting such purchases from the paperwork, record keeping, and certification of more than 30 statues that are unique to government purchases and have no counterpart in the commercial sector.
• Revises the Truth in Negotiations Act (TINA) to address the paperwork burdens that serve as a deterrent to the sale of commercial products to the government.
• The current "small purchase threshold" is $25,000. Purchases under $25,000 use simplified procedures instead of "full and open competition" procedures required by statute. The reform bill increases the threshold to $100,000. This makes it easier for contractors to do business with the government as well as making it simpler and more efficient for agencies to solicit and process procurements.
• Exempts purchases at or below the $100,000 threshold from paperwork and record keeping requirements included in more than 15 statutes.
• Requires that all federal purchases between $2,500 and $100,000 be reserved for small businesses, unless the contracting officer is unable to obtain offers from two or more small firms that are competitive on price, quality and delivery of the goods and services being purchased.

Government purchases up to $2,500 are now classified as "micro-purchases" allowing for significantly simplified procedures. Purchases of $2,500 or less:

• Are no longer reserved for small firms
• Can be made without obtaining competitive quotations, if the contracting officer determines that the price is reasonable and
• Are not subject to the requirements of the Buy American Act.

Implementing a Government-Wide Electronic Commerce System will significantly simplify and streamline the purchasing process, promote greater customer service and increase cost effectiveness. The electronic exchange of acquisition information between the private sector and the federal government will also increase competition by providing improved access to procurement opportunities for thousands of vendors currently doing business with the government. While particularly true for small businesses, it will also help many other vendors who find access to bidding opportunities difficult under the current system.

Federal Acquisition Computer Network (FACNET) is required to be implemented. Intended to provide a single face to industry and inter-operability within the federal sector. The law establishes parameters for a FACNET system built along functional lines. These functions are to be implemented by agencies within 5 years of enactment of the FASA Act.