e-Commerce fundamentals and the future

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.

On April 1, the General Services Administration announced a delay in the anticipated contract award date under the e-marketplace solicitation. GSA explained that “resources have shifted to support the COVID-19 response, and we are having to prioritize certain activities to support the immediate needs of the federal government.”

As a result, the contracting team for the e-marketplace procurement had to shift its focus to COVID-19 response efforts. Coalition members strongly support GSA and the entire government’s efforts in response to COVID-19. We are all in this together!

At the same time, the delay in the anticipated award date provides an opportunity to address shortcomings in the e-marketplace solicitation. Upon a return to more normal operations, GSA can address gaps in the solicitation that undermine the integrity of the federal market. As currently structured, the e-marketplace solicitation creates a privileged class of government contractors, the e-marketplace providers.

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Under the solicitation, this privileged contractor class has no responsibility for core compliance requirements, including the Trade Agreements Act/Buy American Act, Section 889, and counterfeit/gray market products. In stark contrast, across government, contractors are obligated under their contracts to comply with these core requirements. One need look no further than GSA’s Multiple Award Schedule (MAS) program, where thousands of contractors are obligated to deliver products that comply with these requirements. The irony here is that MAS contractors will now have to compete against a privileged class of e-marketplace contractors who have no such obligation. This approach undermines the integrity of the market, and correspondingly, government operations.

It should be clear that, when the government is on the other side of the apex of this virus and begins returning to normal operations, some practices will have to change. With regard to GSA’s e-commerce initiative, for supply chain security, resilience, and sufficiency, the requirements of the solicitation will need to be amended to provide products that comply with the Trade Agreements Act; that clearly identify country of origin; and, no less importantly, that make platform providers specifically responsible and answerable for all aspects of products that traverse their platforms. These requirements are no more than those followed by thousands of vendors under the Schedules program and other government contracts that serve our nation in this time of need.

Moreover, this approach would align the solicitation’s performance requirements with Executive Order 13904, “Ensuring Safe and Lawful E-Commerce for United States Consumers, Businesses, Government Supply Chains, and Intellectual Property Rights Holders,” which addresses the Administration’s concerns about counterfeit trafficking on e-marketplace platforms. As noted in public statements by Peter Navarro, these platforms play by a different set of rules than those that other businesses must follow. Here, GSA has a unique opportunity to revise the solicitation and set a compliance standard that aligns with the goals of the EO. In this respect, the GSA solicitation could serve as a model for the commercial e-Commerce market.

In closing, the Coalition reiterates its belief that with revenue comes responsibility. There simply is no need for a privileged set of government contractors with no responsibility for core compliance. As always, the Coalition stands ready, at the appropriate time, to work with all stakeholders to ensure the integrity of the e-commerce market. Stay safe and healthy!