Electronic Commerce (EC) is the paperless exchange of business information using Electronic Data Interchange (EDI), Electronic Funds Transfer (EFT) and e-mail. EDI is the computer-to- computer exchange of common business documents over telephone lines using a standardized electronic format. EDI allows for the replacement of very costly and time intensive process of typing and retyping paper forms and mailing them to your business partners. Every exchange between business partners can be accomplished through EDI except the actual delivery of the goods or services.

Electronic Commerce is dramatically changing federal government procurement and will impact all suppliers and vendors. The Federal Acquisition Streamlining Act of 1994 has created incentive for federal agencies to move aggressively towards EC/EDI, and goals are in place for all defense and civilian agencies to handle their procurements through EC/EDI. By the Year 2000, the Department of Defense (DoD) and other federal agencies are expecting to conduct 80 percent of their purchasing through Electronic Commerce.

As of April 1, 1997, all Federal Supply Service (FSS) contractors are required to become fully EDI capable. Failure to comply will constitute a breach of contract and may be grounds for default. The EDI requirements will include on-line activities in ordering and in receiving and addressing RFQs.

Currently, two major federal EC/EDI programs are used for on-line activities: GSA Advantage! and FACNET.