GSA’s Section 846 CPI: Accessing the possibilities

This column was originally published on Roger Waldron’s blog at The Coalition for Government Procurement and was republished here with permission from the author.

Since the inception of the Section 8461 e-commerce effort, Coalition for Government Procurement members have emphasized the importance of accounting for security, market integrity, transparency, process credibility, and compliance with the law in the development of a commercial e-commerce initiative for agencies.

Recognizing those imperatives, the task of implementation represented a challenge for the General Services Administration and the Office of Management and Budget, but we believed that challenge was a worthy undertaking, as it represented another opportunity to foster economic growth and increase agency access to commercial innovation and best value solutions. With GSA’s release of the Commercial Platform Initiative (CPI) solicitation, Coalition members continue to believe that the prudent implementation of e-commerce is a worthy endeavor.

It is imperative, however, that GSA seize the opportunities and accompanying benefits afforded by expanding the pilot to embrace competition among the different types of e-commerce solutions. This competition should address critical factors beyond the ability to capture purchasing data for open market buys, such as price and value, and it should examine how each type of solution can identify and meet key customer requirements, like compliance with the Trade Adjustment Assistance and other laws, and verification of product pedigree.

With the enactment of Section 846, Congress sought “a program to procure commercial products through commercial e-commerce portals…” to be carried out “through multiple contracts with multiple commercial e-commerce portal providers.” It defined an e-commerce portal as “a commercial solution providing for the purchase of commercial products aggregated, distributed, sold, or manufactured via an online portal.” This expansive language focusing on e-commerce solutions allows the government to access rapid innovation as it occurs across the commercial market.

As the implementation process unfolded, however, GSA chose to develop three models to represent existing e-commerce market solutions:

1. Where product vendors use an online platform to sell their own proprietary or wholesale products.
2. Where platform providers sell their own products, products of third-party suppliers, or both.
3. Where e-commerce is facilitated through a software-as-a-service model that is managed by the buying organization.

This modeling would not be problematic, but for the fact that GSA chose to restrict the market and competition by piloting only one solution under the CPI, the e-Marketplace model, for up to three years and at a value of up to $18 billion. Further, GSA did not identify if or when it will pilot its other e-commerce solution models.

Opening the CPI pilot to all types of commercial solutions presents significant opportunities to GSA. To begin with, it accounts for implementation of all solutions contemplated under Section 846. That section calls on the government to provide program implementation guidance “on the use of the program…, including protocols for oversight of procurement through the program, and compliance with laws pertaining to supplier and product screening requirements, data security, and data analytics.” Identifying and providing that holistic guidance simply cannot be achieved by testing only a sliver of available e-commerce solutions.

In addition, by piloting multiple commercial e-commerce solutions, GSA will obtain the benefits of competition between those solutions, specifically, downward price pressure and increased innovation incentives. Further, the credibility of the system will be enhanced, as compliance with foundational procurement law, like the Competition in Contracting Act, signals a government marketplace where vendors have a level playing field to engage in a fair, robust competition. Finally, opening the CPI pilot to all types of commercial solutions will improve the credibility and utility of the pilot itself by allowing GSA to understand the operations of, and interplay between, the multiple solutions envisioned to operate under statute.

Moreover, opening the CPI pilot to commercial solutions will address troubling compliance issues that have plagued the Section 846/CPI effort from the outset. For instance, the e-Marketplace model allows the provider to manage its platform while competing against third-party sellers on its platform, thus creating a patent organizational conflict of interest. Further, notwithstanding CPI Statement of Objectives (SOO) language that appropriately would place accountability with the e-Marketplace provider to assure that what is being offered to agency buyers complies with the law — something already being done on GSA Advantage — the SOO raises ambiguity around accountability, stating that “[e-M]arketplace platform providers reserve the right to manage the rules governing the on-boarding of new suppliers in accordance with their commercial practices.”

Opening the CPI pilot to “commercial solution[s] providing for the purchase of commercial products aggregated, distributed, sold, or manufactured via an online portal” will provide GSA with remedies to address these compliance concerns. Even under GSA’s models for e-commerce, solutions already used by agencies in the Schedules context and globally accepted in the commercial market exist to be leveraged to help address these compliance issues and others, like product pedigree and supply chain integrity.

Finally, in recent years, the government has stressed the importance of transactional data for budget, planning, and management purposes. By accessing multiple e-commerce solutions under the CPI pilot, GSA will have the opportunity to obtain and utilize this data in a rationale manner. It will be able to build comprehensive data management tools and analysis synergistically with its Schedules consolidation initiative, thereby avoiding duplication of effort and stove-piping.

It is not too late to embark on the path to success envisioned under the law. Notwithstanding the release of the CPI, GSA still has the opportunity to act by maximizing competition and its associated benefits, thereby capitalizing on the potential of the implementation of e-commerce solutions envisioned under Section 846. For their part, Coalition members, who represent the breadth of GSA’s supplier base, offer their support in maximizing the opportunities for success under the program.

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