Electronic Transportation Acquisition

DEPARTMENT OF DEFENSE

Department of the Army

Electronic Transportation Acquisition

AGENCY: Military Traffic Management Command, DoD.

ACTION: Notice (Request for Comments).

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SUMMARY: The Military Traffic Management Command (MTMC), Product

Management Office (PMO), CONUS Freight Management (CFM) System is

proposing to migrate its business operating system from an aged DOS-

based, batch architecture to a real-time, internet-based software

design. Concurrently, the PMO CFM proposes to incorporate streamlined,

simplified transportation and payment procedures. These procedures

mirror current Department Of Defense (DOD) transportation policy

initiatives, i.e., the re-engineering of Defense transportation and

payment documentation processes identified within Dr. John Hamre's

(Deputy Secretary of Defense) Management Reform Memorandum (MRM) #15.

To replace CFM's current operating system (Field Module), we

propose a unique suite of internet-based functionality, referred to as

Electronic Transportation Acquisition (ETA). ETA is a DOD electronic

commerce resource capable of generating shipment requirements,

acquiring carrier rates, and transmitting transportation and payment

information for DOD freight shipments. The focus of this Federal

Register notice applies to the two functional areas currently

undergoing testing. The first functional area is CFM's newly developed

, web-based transportation acquisition methodology called Spot Bid.

Spot Bid provides users with the initial automated support for freight

movements allowing participating carriers to bid on freight movements

other than Negotiated and Guaranteed Traffic (GT) shipments. The second

functional area talks to the CFM interface with Usbank's payment system

called Power Track. Power Track is a 3rd party payment system that

facilitates the transfer of transportation payment information

contained in an electronic bill-of-lading between the shipper, carrier,

USbank, and the appropriate Defense Finance and Accounting Service

(DFAS) payment center. A description of ETA's suite of functionality

and specific details, business procedures, and preliminary results of

the tests regarding spot bid and Power Track are identified in the

Supplementary Information.

Before the effective date of any proposed procurement policy or

procedure, 41 U.S.C. 418b requires an agency to give members of the

public up to 60 days to comment on the proposed policy or procedure.

Although Electronic Transportation Acquisition is in essence a

technical change to an already existing spot bid procurement process

and thus Federal Register publication may not be required, we believe

it is important to provide the transportation industry and members of

the public an opportunity to assist us in developing, improving, and

streamlining transportation procurements and processes.

DATES: Comments must be submitted on or before March 23, 1999.

ADDRESSES: Headquarters, Military Traffic Management Command, ATTN:

MTOP-TS, 5611 Columbia Pike, Falls Church, VA 22041-5050.

FOR FURTHER INFORMATION CONTACT: Mr. Steve Lord, e-mail, [email protected]

emh5.army.mil, Telephone (703) 681-1185, Fax (703) 681-9871.

SUPPLEMENTARY INFORMATION:

Background of ETA

Approximately two years ago, it became apparent that the next

logical step in CFM's incremental development strategy was to migrate

the CFM architecture from a rapidly aging DOS-based, batch process, fat

client-server system to an Internet-based, real-time, on-line

transaction process. The rapid advent of Internet technologies,

applications, new dynamic software languages (such as Java), coupled

with the rapid advancement of interactive databases, and tremendous

growth of on-line electronic commerce made it clear that the benefits

of an Internet-based CFM far outweighed the potential disadvantages.

Moreover, the ETA modernization strategy directly supports DOD

objectives. Although this notice will focus on Spot Bid and the use of

USbank's Power Track payment system, we believe it is beneficial to

provide freight carriers a brief description of what current functions

CFM proposes to move to the web.

In summary, ETA's suite of functionality includes three core

freight-shipping applications: (1) Tenders (Guaranteed, Negotiated and

Voluntary); (2) Spot Bid; (3) and Worldwide Small Package. In addition,

it includes a variety of transportation support tools and references

such as GT Bid Submission, Transportation Facilities Guide,

Transportation Discrepancy Reports, and Carrier Added Value Suite

(CAVS). CAVS consists of three sub-components: (1) tender view; (2)

completed shipments; (3) and bill-of-lading view.

Spot Bid Procedures

Definition

The PMO CFM is currently developing a spot bid implementation

schedule which identifies a proposed phased roll-out to begin in Spring

99. Spot Bid is a single consignment of one or more pieces from one

consignor at one time, at one origin address receipted for in one lot

and moving to one consignee at one destination address. Included within

this definition are; split pickup at origin and destination points and

stop in transit to partially load and/or unload.

The Spot Bid function supports the DOD shipper's ability to provide

movement requirements for a single shipment on the Internet. Shippers

can elect to offer the shipment to one or all modes i.e., Spot Bid

supports all modes. Following the posting of the requirement on the

web, MTMC-approved freight carriers can access the shipper's movement

request, review it, and elect to bid on it.

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As part of the shipment movement request, a ``closing date and

time'' is provided which prevents carriers from bidding on shipments

after a certain time identified by the shipper. Carriers can submit

their bid, cancel the original bid, and resubmit a new bid during the

indicated open period. Bids are only accessible by the shipper

following the closing date/time. Once the bids have been reviewed, the

shipper can elect to award the shipment. The shipper/MTMC then posts

the award information on the web and all participating bidding carriers

can review their competitors' bids and identify which carrier, if any,

was awarded the traffic. The Spot Bid system then provides the shipper/

MTMC with the needed tools to generate the bill-of-lading data and

hardcopy that accompanies the conveyance. Presently, all bid times are

based on Eastern Time. Therefore, it is critical that bidding carriers

outside EST account for the time difference(s). It is MTMC's objective

to provide our freight shippers/customers with an easy, effective and

robust tool that will help them acquire rates and services while

providing our industry partners with a simplified rate structure. In

meeting those objectives, we will potentially increase new business

opportunities and allow carriers to identify and capitalize on back-

haul opportunities.

The Spot Bid function can be used for all freight shipments other

than Negotiated and GT business. Following the Spot Bid process, the

shipper has the discretion to use either Spot Bid or an existing

voluntary tender rate--if available. The ``bid'' serves as the

carrier's offered rate; therefore the submission of a 364-R tender is

no longer required. Instead, the carrier is required to submit a single

factor rate that is inclusive of linehaul, accessorial services, and/or

special-permit charges (if applicable). Additionally, Spot Bid does not

require the shipper/MTMC to request specific equipment from the

carrier. If there is a need to do so, the shipper/MTMC will annotate

the equipment requirement in the bid proposal's ``Remarks'' block.

However, the business process is changing somewhat in that we are

requiring the transportation providers, in lieu of the shippers, to

assess what type of equipment is appropriate and/or available for the

shipment.

Technical Requirements

Quite simply, both shippers and carriers only require hardware

capable of running the latest generation of web browsers (available

freely on the Internet) and access to the Internet. Specifically, a

laptop or Personal Computer (PC), a minimum of 486, with modem or

network access to the Internet is required. Java-capable Internet

browsers, e.g. Netscape Navigator or Communicator 4.0 or Microsoft

Internet Explorer 4.0, are required. Versions lower than 4.0 should not

be used and browser upgrades are available for free on the Internet. A

current and operational e-mail address will be required as a means of

communication between MTMC/CFM, the shippers and carriers. E-mail will

be utilized to transfer user password information. In that light, the

suite of functions within ETA will be accessible through a single login

identification and password process. In summary, rights and privileges

to access ETA's functions, e.g., Spot Bid, will be granted through the

issuance of digital certificates to both Government and industry

representatives. Further information and procedures will be provided to

all CFM ETA users in the next few months.

Spot Bid Tests

MTMC continues to, test CFM Spot Bid at eight CONUS sites.

Specifically, Anniston Army Depot, AL; DCMC Boston, MA; Ft Bragg, NC;

Sunnypoint, NC; USPFOs Oklahoma, Kansas, and Texas; and Nellis AFB, NV

are currently using Spot Bid. CFM is coordinating test procedures with

Navy's Fleet Industrial Supply Center (FISC), Norfolk, VA and Naval

Weapons Station (NWS), Yorktown, VA. Eighteen carriers are

participating in the test (13 motor, 3 rail, and 2 air carriers) and to

date, approximately 100 shipments have moved under Spot Bid while over

300 bid offers have occurred. The balance of offers that did not move

under Spot Bid were attributable to either technical or administrative

start-up problems, too little time for carriers to prepare a bid, i.e.,

bid window was too short, or bids were higher than existing tender

rates.

Feedback from the test sites has been very positive from both

carriers and shippers. Spot bid has been described as a flexible, user-

friendly, and effective tool for acquiring rates and services via the

Internet. Admittedly, due to the small population of test sites and

carriers, it is premature to project cost savings in the form of

transportation costs. Many test sites indicated that they believe the

overall effectiveness of Spot Bid will increase vastly when we offer

the system to all MTMC-approved carriers and expand the Government user

base. Consequently, the issues alluded to above, regarding higher costs

and lack of bidding carriers, will be offset by greater participation

and competition. In addition, test carriers' comments have been very

encouraging as well. The reduced administration in providing a bid, the

ability to price based on an order versus a forecast, and ease of use,

are just a few of the positive descriptions. Test carriers' concerns

have focused on the short bid window that is afforded them by the

shipper and the lack of notification of a bid. Coordination and

training with the shipping community coupled with MTMC management

oversight and CFM technology will remedy these problems. The CFM PMO is

working closely with the MTMC Deputy Chief of Staff for Operations to

coordinate Spot Bid management oversight and customer support issues.

MTMC personnel will support both Government and industry users of Spot

Bid. In addition, CFM is actively incorporating many of the specific

recommendations that both Government and carrier representatives have

provided throughout the test period.

In summary, both Government and industry participants have so far

fully embraced the migration of this business process to the internet,

and most importantly, have validated to us that the internet is the

next logical area to conduct freight transportation acquisition

business. Clearly, we encourage comments from the entire carrier

industry to help us identify all issues associated with our Web-based

spot bid process.

USBank PowerTrack Payment System

Background

This system is currently undergoing an evaluation process for

implementation. MTMC is continuing to evaluate the test results. Based

upon the results of this evaluation, MTMC will determine the

implementation parameters in concert with prototype efforts. In

Management Reform Memorandum #15, Dr. John Hamre identified a series of

initiatives to address perceived shortcomings of the transportation and

payment processes. One of the initiatives included developing an

improved payment mechanism for surface transportation. The goal is to

reduce data requirements that are currently necessary for payment, and

increase data accuracy. At the same time, Dr. Hamre envisioned paying

commercial carriers for services provided as soon as possible.

Description

Power Track is an automated on-line payment processing and

transaction tracking system that supports logistical transactions.

Power Track consists of five primary functions: (1) electronic

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data transmission; (2)-payment approval process; (3) electronic payment

and billing; (4) communication for dispute resolution; (5) and

customized data analysis.

Technical Requirements

Power Track software requires a 486 or higher laptop or PC (Pentium

and higher is preferred). Internet connectivity is needed. Currently,

Power Track supports a single browser only, i.e., Microsoft Internet

Explorer 4.0 or higher. USbank is planning to modify their browser

requirement to include multiple browser options in the near future.

Lastly, the file size that Power Track loads on each user's computer is

no more than 4MB. Questions pertaining to Power Track's technical

requirements should be addressed to: Everett Doolittle, Vice President,

Business Development, USbank, 1010 South Seventh Street, Minneapolis,

MN 55415, telephone 612-973-6156, or www.usbank.com/powertrack.

Test Procedures and Business Process

In summary, the Power Track software is resident with the

shipper(s), carrier(s), and USbank. How does Power Track integrate with

the Defense transportation payment process? The CFM shipper generates a

bill-of-lading (BOL) and transmits the data to the CFM Host. The CFM

Host transmits a rated BOL to Power Track. Following the delivery of

the shipment, the carrier is required to provide Power Track with

Notification of Delivery--either electronically or telephonically. The

notification elevates the shipment to a specific status level in Power

Track. Shipment status are viewed regularly by both Government and

carrier personnel. Once the shipment is delivered, the shipper and

carrier can review the transportation payment amount that Power Track

is preparing to pay the carrier. Again, this amount is based on the

original rated BOL from CFM. If either party disagrees with the amount,

they can notify the other party and reconcile the dispute on-line prior

to payment. Early resolutions to payment disputes reduces greatly the

number of carrier rebuttals, promotes dialogue between the applicable

stakeholders, i.e., shippers and carriers, and results in an accurate

payment the first time. Once the shipper certifies the shipment for

payment, USbank pays the carriers without the need of an invoice. The

carrier's costs associated with processing and managing invoices is

dramatically reduced due to this automated payment process. If a change

in payment is required following the original payment, the Power Track

system generates an Electronic-bill (E-bill) and initiates payment

based upon that amount agreed upon between the carrier and shipper.

Monthly, USbank summarizes the shipments and payments, stemming from a

specific site, and provides the information to the shipper(s)-

authorized designee, for review and approval. Upon approval, the

shipper forwards the information to the appropriate DFAS payment

center, which in turn pays USbank. Therefore, DFAS issues a single

payment that reflects numerous shipments. Consequently, carriers are

paid in 1-3 days and the carrier and Government resources needed to

generate and pay, a number of invoices is greatly reduced.

The PMO CFM has been testing Power Track at SPAWAR, San Diego, CA;

DCMC Seattle, and DCMC Cleveland since September 1998. We began testing

at Ft Campbell, KY in December 1998. Approximately eleven motor and air

carriers are participating in the test. Each participating carrier pays

Power Track a percentage of each freight bill. To date, approximately

175 shipments have been generated and on the average, test carriers

have successfully received payments between 24-72 hours following

delivery. The feedback from both carriers and government users has been

very positive. Shippers have indicated that Power Track is extremely

user-friendly, and embrace their newly empowered authority to certify

payments. Shippers' have requested a larger population of carriers to

participate with Power Track. USbank is working the issue. Test

carriers' feedback has been very positive as well. They have

acknowledged receiving payments between 24-72 hours and, similarly,

have found the Power Track system to be very user friendly.

Conclusion

We encourage you to access the CFM website and view the latest

information. It is a very functional homepage, i.e.; it is kept up-to-

date with the latest CFM News and ETA applications used by Government

and industry. The site is accessible through either MTMC homepage

www.mtmc.army.mil--click on ETA) or directly to CFM homepage at

www.mtmc.army.mil/transys/cfm. Under ``What's New'', we have provided a

Federal Register Comments Form. Feel free to utilize this form in

providing your response to us.

The PMO CFM will host a Carriers Symposium on February 8-10, 1999,

in Atlanta, GA. The symposium is intended to provide commercial

carriers with the latest status of our web development efforts, provide

you with the knowledge and tools needed to use ETA's functions (as

applicable), and solicit your feedback to ensure we are moving forward

smartly. This educational effort will continue at the 1999 MTMC

Symposium to be held at the Adam's Mark hotel in Denver, CO, March 29

through April 1, 1999. Reservations are now being accepted through

MTMC's Conference Contractor ``Connections'' at 404-842-0000.

Connections hours are Monday through Friday, 9:00 AM to 5:30 PM EST. Do

not call The Adam's Mark Hotel for reservations, as they will refer you

directly to Connections.

In addition, we will be posting a ``Playground'' on our website for

both Government and carrier representative's to access and use. The

intent of the playground is to familiarize and train users of ETA on

the different CFM applications/functions that either are, or will be,

available. Most importantly, it provides users with a platform to

provide feedback to the CFM PMO so we can ensure we are programming a

system that is aligned with your interests and needs.

Regulatory Flexibility Act

Implementation of this proposed procurement procedure concerning

the movement of DOD freight involves public contracts and is exempt

from the Regulatory Flexibility Act, 5 U.S.C. 601-612. This proposed

procurement procedure is not rule making within the meaning of the

Administrative Procedure Act or the Regulatory Flexibility Act.''

Paperwork Reduction Act

The Paperwork Reduction Act, 44 U.S.C. 3051 et seq. does not apply

because no information collection requirement or records keeping

responsibilities are imposed on offerors, contractors, carriers, or

other members of the public.

John Piparato,

Deputy, DCSOPS.

[FR Doc. 99-1453 Filed 1-21-99; 8:45 am]

BILLING CODE 3710-08-P