GSA Forges Ahead With Commercial E-Commerce Plan

This content is provided by Bloomberg Government.

The General Services Administration is pushing forward a plan that could enable government contracting officials to start buying everyday products more easily using online marketplaces run by companies like Amazon.com Inc. or Walmart Inc. Critics say this will enable agencies to bypass federal acquisition regulations and will adversely affect competition.

GSA released a proposal Dec. 4 that outlines its strategy to bring commercial e-commerce platforms to government. It calls for establishing a pilot program involving multiple e-commerce providers, aimed at gathering data and identifying best practices. Purchases would be capped at the government’s $10,000 threshold for micropurchases. Some acquisition regulations do not apply to purchases valued below that threshold.

The agency hopes to field a prototype commercial e-commerce portal by the end of the 2019 calendar year, said GSA administrator Emily Murphy at a Dec. 12 industry day.

GSA set a Dec. 21 deadline for submitting responses to its request for information. Officials will spend the coming weeks digesting industry comments and summarizing months of market research. In the last year, the government released multiple RFIs and met with 75 companies for one-on-one demonstrations, according to GSA deputy commissioner Laura Stanton. GSA will publish its findings in a March report to Congress.

Throughout the process, officials have stressed the importance of working with multiple e-commerce providers to ensure a competitive process, perhaps seeking to head off criticism that the initiative’s primary beneficiary will be Amazon. By some estimates, about half of Americans’ online retail purchases will flow through the Seattle-based e-commerce giant in 2018.

“We are not looking for a proof of concept with one provider. There needs to be multiple e-commerce marketplaces for this to be successful, for this to accomplish its purpose,” said Jeff Koses, a senior procurement executive with GSA’s Office of Government-Wide Policy. According to Koses, the government will cancel the solicitation and “take several steps back” if it receives only a single acceptable bid.

Air Force Pilot Program

In September, Bloomberg Government reported on an Air Force program that authorized procurement officers at six bases around the country to make small purchases using Amazon’s business-to-business marketplace, in addition to other government-run portals.

According to an official close to the program, the Air Force spent roughly $500,000 with Amazon since the program began in January 2018. Participants reported that Amazon offered competitive pricing, an easier buying process, and higher-quality transactional data compared with government supply schedules.

GSA confirmed to Bloomberg Government that it had met with Air Force representatives to discuss the pilot program’s progress and gather lessons learned as part of its market research process. However, GSA stressed that, unlike the Air Force, its plan would mandate multiple commercial providers.

Still, not everyone is quite on board with the plan. Roger Waldron, president of the Coalition for Government Procurement, in a Dec. 7 column raised several “critical issues” relating to how the proposal will handle compliance with unique government requirements, the ownership of data collected by marketplace providers, cybersecurity and supply chain risks, and possible organizational conflicts of interest.

“These issues are important and represent fertile ground for collaboration between GSA, [the Office of Management and Budget], customer agencies, and industry. Such engagement increases the potential for program success,” Waldron said.

Chris Cornillie is a federal market analyst with Bloomberg Government.

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