Army finds a new way to pay bills

Army officials want to manage installation of the service's new financial system in an evolutionary manner with a $500 million contract for commercial software. They hope to create a system for sharing data across the service and potentially saving millions of dollars.

It will be the first time that Army officials try using commercial products for tracking the flow of money in and out of the service's appropriations ledger, which handles receipts, payments and some travel expenses.

The new financial management system, known as the General Fund Enterprise Business system, will replace the Army's accounting systems, which use government-written software.

Earlier this month, Army officials issued a draft request for proposals for the new system. They expect to release the final version later this month, with proposals due Dec. 23.

"The primary capability required is to maximize the Army's ability to reduce legacy, stovepiped systems and data and allow an environment that provides all levels of leadership reliable, relevant and timely

financial information on an enterprisewide basis," wrote Donna Harris, a contracting officer in the Army's Information Technology E-Commerce and Commercial Contracting Center, in the draft RFP issued Nov. 8.

Army officials want the winning company to demonstrate that enterprise resource planning software works and that the service's finance employees can adapt their processes to commercial products, said John Argodale, deputy assistant secretary of the Army for financial operations.

The phased approach to the business system will also help the project achieve early success and get the Army's finance personnel to accept and use it. Commercial software can work, Argodale said.

Army officials said they need better money management servicewide. The new system will help them achieve it by fiscal 2007, said Bob Guerra, a partner at Guerra, Kiviat, Flyzik and Associates, a Washington, D.C., IT consulting firm.

Officials also plan to follow performance-based contracting principles for the multiyear acquisition. "Army officials say, 'We need you in industry to come tell us what to use and how to deploy it,' " Guerra said.

Companies vying for the job include Accenture, BearingPoint, Computer Sciences Corp. and IBM, said an industry official who works at a company that will bid for the job. The winning vendor must give 20 percent of the work and revenue to small businesses.

Army finance officials operate three financial systems — the Standard Army Finance System, the Defense Joint Accounting System and the Standard Operation and Maintenance Army Research and Development System. They run on mainframe computers.

Army IT officials want to hire a company to choose commercial software for the new business system, manage its installation and maintain it. The work includes training the service's finance personnel and conducting operations and maintenance.

Army finance officials want the system to improve the performance and standardize the processes of the service's financial management operations. For example, they want it to reduce Defense Finance and Accounting Service costs by 50 percent in direct billable hours, system maintenance hours and vendor payments.

They also want a snapshot of what money is on hand. With the new approach, they will be able to determine how much money is in the accounting system in real time at least 95 percent of the time.