E-Business: Providing Interactive Electronic Services to the Public
Seminar date: May 5, 1999

Grants, Loans Could Put $300B On Federal EC Systems

If EC is going to pay big ROI, the big programs will be at the core of the Electronic Government.

The distance between the continuing federal Electronic Government movement and the commercial sector "e business" trend might close to a mere gap as agencies begin to apply EC-like technologies to federal grants programs. This was the message delivered by agency IT and business leaders at a recent "e government" conference in Washington.

Grants, loans, licensing and permits programs represent as much as $300 billion of the annual U.S. budget, and present one of the largest automation challenges ever confronted, said representatives of the so-called "Federal Commons" program.

Commons is a governmentwide initiative to put a "single face" on the many e business systems that could be used to fully automate grants and loans within 23 major agencies, said Paul Markovitz, an NIH official.

Many of the largest federal grants programs occur in unison with state and local agencies and with academic/research organizations, implying that e commerce-like solutions that make "trading partners" of business entities in the private sector could be equally applied by agencies across all of government and the academic and scientific communities, officials said. In most cases, the Internet would serve as the principal backbone of the effort, Markovitz said.

John L. Okay, Ph.D., a former GSA and USDA official, noted that efforts like Commons represents a critical step for government away from EC that is limited to "buying and paying systems" (exemplified by GSA Advantage or DLA E-Mall systems) to broader "public interaction/direct democracy" systems that will work closer to the core mission of government itself.

'E' Guv is Popular Guv
Okay moderated the conference, "E-Business: Providing Interactive Electronic Services to the Public," presented by the Council for Excellence in Government, the Digital Government Institute and GCN on May 5 as part of the Technology Excellence in Government series.

Noting that many agencies have made the transition from "service-center based automation" to the more interactive Web, Okay told the audience of more than 100 IT managers and industry experts that "e business can redefine our democracy to a more personal, individualized relationship between citizen and government."

If grants, loans and licenses emerge as full-bore EC efforts, it might be only in part to reduce costs associated with paper-based processes that lead to a significant amount of waste, fraud and abuse, said Thomas Temin, GCN editorial director.

The immeasurable gain for agencies will be that "people just get a better feeling about government when efficient electronic interactions replace the need to stand in line for hours at the department of motor vehicles or run all over town trying to get a construction permit," Temin said.

Temin noted that state-run e systems for driver's license renewal is positively redefining how people feel about once-dreaded DMVs in Alaska and Massachusetts among other places.

Your Expertise, Your Standards
The Federal Commons effort is occurring both on a governmentwide standards-making level and within individual agencies like the Transportation Department, said Ann Fisher a DOT official, and Brad Stanford, a Navy EC specialist. The effort to streamline the grants process has begun with the creation of standard data elements and a data dictionary of about 350 terms, Stanford said.

Using these kinds of standards, DOT has built new links to the academic and scientific research community, a pilot project that also encompassed IT and business requirements from the EPA; the Energy, Labor and Interior departments; and some state and local systems, Fisher said. Fisher noted that the pilot encompasses many current EC elements including competing approaches based on Java applets and more traditional EDI systems.

The pilot will move closer to real-life operational use as DOT furthers its partnership with Commerce's NTIS program for system level support and when the GSA ACES certificate-based Internet/PKI security system is delivered, Fisher said.

Stanford said the Commons philosophy will remain open to competing technologies running where appropriate "because we want each agency to be able to rely on what it's good at as they contribute to the overall program."

IRS on a ROI Roll
New "risk analysis" methods for gauging security and privacy concerns bode well for such grants programs, several speakers said. Stephen Holder, the IRS's e government director, reported that the often controversial tax-collecting process is scoring kudos and significant ROI when conducted in electronic environments including telephone and on-line filing systems.

Holder also wowed the conference with new market research showing that the same demographic block of the population most opposed to filing electronically for privacy reasons are, conversely, most inclined to do it when they learn that "refunds get to them in about half the time if they had filed a paper return," Holder said. The business case for e government has led IRS to plan for 80 percent of all tax-return business to be conducted electronically by 2007.

The IRS's e file accuracy rate for returns is a whopping 99 percent, as compared to less than 80 percent for paper, Holder said. The agency's once-controversial decision to distribute PIN numbers to electronic customers in the TeleFile market is now a real policy lamb, since there has not yet been a single case of fraud associated with the PIN system, Holder said. Here is another case in which a perceived privacy "threat" amounted to virtually no actual risk, he noted.

Students On Line
Federal loan programs are already something of an avant garde area for e business, as exemplified by USDA's rural development banking system and, more recently, the Education Department's work with an on-line student loan project.

Molly Hockman, Education's manager for the ACCESS America for Students project, said the new Web-based resource opened May 1 at www.students.gov as a links-based resource for students.

In July, however, Education plans to start turning the platform into a fully transactional tool for processing the financial side of student aid accounts, also using PINs and ACES as well as transactional relationships with other agency systems including IRS, VA, SSA, Labor, Treasury, DOD, USPS, Americorps and other relevant systems including those in the academic community.

At full bore, Education's ACCESS system could be used to manage 10 million live accounts as well as warehousing millions more inactive or collection records, Hockman said. She said planners have looked at other similar systems including many operated by private sector financial companies for guidance as they continue to employ the "build a little and test a little" method of constructing their Net-based system.

The White House's EC mandate is clearly one of the driving forces behind the surge of new Internet-related system activity in agencies whose budgets are nonetheless still hostage to Y2K emergencies.

Everybody Needs Bandwidth
Col. William Osborne, a Pentagon EC program manager, said the push in DOD is to put 90 percent of all contracting into fully electronic form by 2000, no small task when you consider that just one DOD warehouse in Columbus, Ohio, houses "15 linear miles of contracting paperwork." DOD is working to create a single database approach to contracting, and to support it with full use of electronic forms, invoicing and a Electronic Document Access system that cuts the mileage of paper to nothing over the long term, Osborne said.

The conference was sponsored by a variety of industry leaders including:

• Information Builders
• F5 Networks
• CDW-G
• World Wide Technology Inc.
• GTE

Industry speakers advised federal EC managers to expect higher reliability systems as EC further develops both in the marketplace and government. They agreed that bandwidth remains one of the most difficult challenges for agencies. Although security and privacy represents a hurdle for all EC practitioners, industry believes agencies should also focus on "ownership of information" issues too. In many cases, EC technology is ahead of EC policy, experts said.

Conference attendees also received a full briefing on progress made to date on the Internet2 research and development project, as well as the White House-led Next Generation Internet project, from Dave Jefferson of the non-profit Highway 1 educational group. These projects are R&D level attempts to address issues such as how to increase bandwidth.

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