Getting arms around $6B in credit card data among the biggest benefits of e-commerce initiative

The deadline extension for bids comes after industry submitted more than 70 questions to GSA about its solicitation for the congressionally-mandated commercial-like online buying portal.

Laura Stanton, GSA’s deputy assistant commissioner for category management in the Office of IT Category in the Federal Acquisition Service, said the solicitation is all about moving from theory to proof-of-concept for the e-commerce platform.

“The agencies have been very excited. We are getting agencies coming to us, raising their hand, saying ‘we want to participate in the proof-of-concept, what can you do to bring us in?’ and enthusiasm on that front,” Stanton said in an interview with Federal News Network. “From the standpoint of agency size, it will be a mixture of agency sizes including large agencies and components of large agencies as well as smaller agencies. A huge mix on that side as well as the amount they are each spending. About 6-to-8 agencies is what we are looking at to launch this. That gives us a good number and a good diversity without it being too overwhelming to work with each one closely.”

The e-commerce platform will launch in early 2020 and run for three years, if all options are exercised.

Stanton said GSA has been working on the e-commerce platform concept, known as the Section 846 requirement from the 2018 Defense authorization bill, for the better part of two years. GSA has held multiple industry days, developed draft solicitations and tried to answer a host of questions and concerns.

Roger Waldron, the president of the Coalition for Government Procurement, said in an email to Federal News Network that extending the RFP due date made sense and he expects additional extensions given the scope of the solicitation that includes 60 regulations and over 100 technical requirements.

To that point, GSA received more than 70 questions from vendors regarding the RFP, which the agency released in early October.

“GSA has been open in its engagement with industry. At the same time, it is vitally important that GSA address all relevant questions regarding the solicitation,” Waldron said. “The answers to the questions will provide greater clarity surrounding the operational requirements for the solicitation which will impact both e-marketplace providers and third party suppliers.”

Waldron said there are several questions that GSA still needs to address more fully.

One is around potential organizational conflicts of interest and how GSA can ensure the platform provider doesn’t use the knowledge gained by managing other vendors to sell products to its advantage.

Waldron said the solicitation doesn’t address what mitigation factors should be in place.

“Conflicts of interest undermine competition, increase costs, and limit access to innovations in the commercial market,” he said. “GSA has time to appropriately address/mitigate the conflicts to enhance competition and increase value in support of agency missions.”

Stanton said Congress added another provision to address this concern in the 2019 NDAA.

“During our market research phase, we heard from suppliers, who felt that provision didn’t go far enough to protect their data, and we heard from portal providers, who said it could potentially harm their internal operations in just managing the performance of their marketplace,” she said. “This is not unique to what we are doing under Section 846. This has become an increasingly large concern across the supplier community around e-marketplaces. The answer is the proof-of-concept will help us better determine how we monitor these issues and what GSA’s role is as we go forward.”

Testing only one platform, for now

Another big concern outside the RFP is the decision by GSA to test only one type of platform.  Under Section 846, Congress said GSA should test multiple e-commerce platforms, and GSA determined that of the three it identified—e-marketplace, e-commerce and e-procurement—it would start with the e-marketplace concept. Waldron and others have expressed concern that by testing only one of the three platforms, GSA is putting providers of the other two platforms at a competitive disadvantage because of the “first-mover” status. Agencies will get used to using a specific approach and getting government buyers to change will be difficult.

GSA said in its phase 2 market research report that it decided to test only the e-marketplace model because “this model enables GSA to implement an initial proof of concept quickly while minimizing government burden and costs. It also keeps the user experience as close to existing commercial practice as possible for the commercial e-commerce portal providers, suppliers and buyers. However, GSA is fully committed to assessing the best ways to leverage the benefits of the other models throughout implementation of the initial proof of concept.”

Stanton said this first proof-of-concept is just the starting point for the broader e-commerce effort.

“The reason we selected e-marketplace concept is because of competition. Having multiple marketplaces so two or more, and on those marketplaces, there is a large variety of products and each of those products are often sold by multiple suppliers so you have multiple choices there,” she said. “From a suppliers’ point of view, they have multiple marketplaces to choose from on which to put their catalogs. We are able to test out what was asked for in Section 846 most easily using the e-marketplace approach. As we go forward, part of the next phase of the phase 3 report is looking at where do we go from here?”

Stanton said she doesn’t believe first-mover status is real concern.

“This has been acknowledged this is a proof-of-concept. We also have an opportunity that over time we can improve user experience and begin to look at how do we add a thin management layer on it,” she said. “That begins to answer some of those questions about how do we manage multiple providers. From a buyers’ point of view, having an onslaught of choices at this point would be very challenging to manage.”

Stanton said it’s unclear when GSA plans to test the other two platforms. The goals for this proof-of-concept are user adoption and data collection and analysis.

Waldron said by testing only one platform, GSA is missing an opportunity to test the current state of the commercial market.

“This is especially important as the proof of concept will serve as the foundation for future guidance on accessing the market and without testing all three types the guidance will be incomplete, limiting opportunities for competition and innovation,” he said.

Better B-to-B capabilities

GSA estimates that the e-marketplace platform will help agencies get their arms around as much as $6 billion in spending that is happening through government credit cards and other micro-purchase buys.

Stanton said GSA believes obtaining a better understanding of that data is one of the most attractive aspects for customer agencies about the e-marketplace pilot.

“The business-to-business capabilities are relatively new. I think agencies were either thinking about entering into agreements with e-commerce platform providers or have already taken it in their own hands to take advantage of some of those benefits. So coming to GSA as part of the Section 846 initiative means they are taking part in that whole of government approach,” she said. “This is not a mandatory program so they are basically raising their hand and saying ‘we see benefits’ in leveraging the government’s buying power, which translates into discounts or tiered pricing on the B-to-B prices available on these platforms. It also means that they get the B-to-B capabilities, including workflow management, approval processes, spend data and analytics.”

Stanton said the spend data is one thing agencies consistently have said is among the biggest benefits of using the platform.

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