A busy week highlighting critical challenges for government market stakeholders

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.

Events unfolding this week demonstrate that the procurement community operates in a dynamic environment. They also remind us of the critical importance of partnership between the government and its industrial base. This week, we share some examples where partnership opportunities exist to benefit, not only agency users, but also the citizens at large.

Coronavirus

Anyone entering a pharmacy or supermarket probably has seen that the shelves storing hand sanitizer and surgical masks are empty, as people seeking to safeguard themselves and loved ones have exhausted existing supplies. Indeed, even packages of alcohol swabs and bottles of rubbing alcohol are depleted. It is clear that, with the nation and the world facing a novel virus, agencies and health centers will need rapid access to health items as they fulfill their missions.

The General Services Administration has a key role to play here. Over the years, the Federal Supply Schedules, GWACs and other GSA contracts have played a key procurement role in supporting the government’s response to the nation’s challenges. For its part, GSA has shown that it can be flexible in exigent circumstances, which is why agencies have consistently turned to the Schedules for quick access to authentic products, and avoided price gouging. We are confident that GSA will do so here by facilitating the addition of any needed supplies to existing Schedules.

Section 889(a)(1)(B)

This week, Defense Pricing and Contracting (DPC) held a public meeting at the Pentagon to vet issues associated with the upcoming release of a draft regulation implementing Section 889(a)(1)(B) of the 2019 National Defense Authorization Act. That provision restricts the government from contracting with an entity that uses certain telecom or surveillance technology and/or services that use such technology or services, including products manufactured by Huawei and ZTE. The regulation will apply to all FAR-based contracts, and DPC leadership should be applauded for its outreach on this important, broad-sweeping issue. The meeting permitted stakeholders to air the critical concerns they have with interpretations of the language.

Commenters at the public meeting agreed with the intent of Section 889(a)(1)(B), but they found the language so broad and, in some instances, ambiguous, that implementation will be difficult. Vendors noted that they simply do not have visibility and control deep down their supply chain tiers, as those tiers cascade. Further, for global companies, as for the government, it is impossible not to have some nexus somewhere to prohibited products. Small business community representatives stated that they are particularly impacted. The next steps in the process will be the issuance of a proposed rule implementing the “use” prohibition. The Coalition is tracking this issue and will be commenting on the proposed rule.

E-commerce platforms’ facilitation of counterfeit products

Startling testimony before the Subcommittee on Consumer Protection and Commerce of the House Energy and Commerce Committee described how fake products are becoming common on various e-commerce platforms. The hearing, entitled, “Buyer Beware: Fake and Unsafe Products on Online Marketplaces,” highlighted the risk to public health and safety associated with the fake products, certifications, and reviews, along with the challenges associated with the vetting of sellers associated with these platforms and the adequacy of platform provider accountability.

Along these lines of concern, the FAR & Beyond blog recently highlighted the confusion caused by GSA’s grounding of the e-commerce proof of concept solicitation in avoiding compliance with the law and the administration’s concerns, expressed by Peter Navarro, that “e-commerce platforms[,] as a class[, play] by a different set of rules that simultaneously hammer brick-and-mortar retailers, defraud consumers, steal American jobs[,] and rip[-]off intellectual property rights holders.”

This hearing reinforced the concerns already expressed and the critical need for GSA to revisit its approach, especially in light of GSA’s testimony at another hearing before the Subcommittee on Government Operations of the House Oversight and Reform Committee that, in connection with the upcoming e-commerce pilot, agencies bear the ultimate responsibility for compliance. This approach makes every single transaction under GSA’s e-commerce platform a risk decision unto itself (i.e. buyer beware), which, given the aforementioned testimony on counterfeit products, raises significant questions regarding the integrity of GSA’s proposed e-commerce marketplace. The Coalition will be addressing this matter in an upcoming blog.

The developments this week cover complex issues for stakeholders to consider. The Coalition stands ready to assist on all these matters by facilitating the collaboration needed to provide solutions that safeguard federal funds, the credibility of the procurement process, and the health and security of the nation.

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