DLA standardizing interagency buy, sell processes with G-Invoicing 

By Beth Reece

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The Defense Logistics Agency is ahead of other defense agencies in implementing mandatory changes to the way federal organizations buy and sell goods or services to one another, a Defense Department official told managers of DLA’s intragovernmental support agreements in Lorton, Virginia, Nov. 5. 

DLA is moving to the new web-based Government Invoicing platform in two phases, with intragovernmental agreements scheduled to be in place by September 2020 and full implementation in the agency’s online Enterprise Business System by June 2021. 

“You guys are really stepping forward,” said Lora Muchmore, director of business process and system modernization for the Office of the Under Secretary of Defense. “Some of your best practices are internal guidance, training and automation, and we’re planning on sharing your successes with the rest of DoD.”

Muchmore helped kick off DLA’s three-day G-Invoicing Summit, which gave employees from DLA Headquarters and major subordinate commands the tools to lead G-Invoicing implementation at local levels. 

G-Invoicing is a U.S. Department of Treasury-designed system that standardizes the agreements process, outlines terms and conditions, and provides a common data repository for financial management of those agreements. Until now, DLA recorded reimbursable business arrangements on DD Form 448, “Military Interdepartmental Purchase Request.” Those agreements sometimes lacked clear, agreed-upon terms and led to errors during the payment and collection process, DLA G-Invoicing Program Manager Michael Lane told employees when introducing the new platform in February.

Standardizing the government’s buy/sell process may sound easy, but the volume of activity makes it a daunting task for DoD, which conducts about three-quarters of the federal government’s buy/sell activity, said Marisa Schmader, deputy assistant commissioner of Treasury’s Bureau of Fiscal Services. DLA’s portion is worth about $9 billion.

“There’s a lot of change that needs to take place. It’s not just an accounting change; it’s an organizational change that touches many different facets of each organization,” Schmader said, adding that about 75% of DoD’s trading partners are other DoD entities. 

G-Invoicing is expected to improve DoD’s ability to achieve a clean audit opinion by centralizing data, Muchmore added. 

“We have not done a great job with our buy/sell relationships, and unsupported intergovernmental account balances are a long-standing material weakness in the audit,” she said. 

While the department uses various business methods to support troops, especially when they are at war, those methods should be the same across DoD, Muchmore continued. 

“Asset management is asset management. Financial management is financial management,” she said. “G-Invoicing is forcing the Department of Defense to think even beyond ourselves. Why should we conduct buy/sell activities different from the way they’re done at USDA [U.S. Department of Agriculture]?”

G-Invoicing has become an important platform as DoD reviews the department’s 341 financial management systems to determine how it will reduce them to a more manageable number, Muchmore added. In a recent study assessing why the department has difficulty implementing standard processes, an independent consulting company advised DoD to reduce its relevant systems to just 16 in seven years. While that’s unlikely to happen, Muchmore said, the department is working to trim its financial management systems by increasing functionality in existing enterprise resource planning software like EBS. 

“The ERPs have really matured and can bring a lot more functionality than we’ve put in them in the past,” she said.

The implementation of G-Invoicing is Number 5 among priorities highlighted on the DLA Dashboard, added DLA Chief of Staff Kristin French. When she joined the agency in March 2018, DLA had fewer than 50 part-time support agreement managers throughout the agency. Now it has over 80. 

“The team has grown, but it’s going to be a challenge putting this new process in place and establishing hundreds of new agreements,” she said. “This is a workload we didn’t expect, but we’re setting a solid foundation for the future here.”

DLA’s support agreement managers are working to identify the number of agreements in place, in process, due for review or which have expired. Initial estimates indicated there were about 3,000 agreements across the agency, but French said there may be more than 5,000. 

The rest of the summit focused on execution strategies and included breakout sessions and practical exercises to reinforce implementation concepts.