GSA tries to address concerns of e-marketplace initiative in draft RFP

More than a year after holding an industry day and collecting hundreds of comments, the General Services Administration is seeking feedback on its initial plan to test out the e-marketplace concept.

GSA released a draft solicitation today outlining its strategy to award multiple contracts to e-marketplace providers and pilot this approach with open market products that fall under the micro-purchase threshold of $10,000.

“The commercial platform initiative (CPI) program and this initial proof of concept solicitation is focused on spend that occurs on the open market, outside of strategic and/or existing government contracts,” GSA states in the draft solicitation’s cover letter. “It is estimated that open market purchases via government purchase cards represent an addressable market of $6 billion. GSA intends to begin with a limited scope approach by starting with a proof of concept and inviting a subset of federal agencies to participate as part of the initial offering. The goal of the proof of concept is to test and refine the requirements of the CPI program in order to best meet the government’s needs going forward.”

GSA says it’s looking for e-marketplace providers who sell consumer products and the demand is consistent versus cyclical.

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“The contractor(s) will offer a commercial e-marketplace platform where 3rd party suppliers make their product catalogs available to buyers and may include the platform provider as a 1st party seller,” the draft solicitation states. “These online marketplace platforms will feature multiple suppliers offering the same product and will allow buyers to decide which supplier/product combination meets their needs. The user interface will allow buyers to efficiently locate products and to complete the purchasing process in a manner that is reflective of today’s commercial business-to-business (B2B) buying experience. The e-marketplace platform model provides 3rd-party suppliers an opportunity to reach government customers who may not already do so through other channels. It enables competition among suppliers on price and other factors important to government buyers and taxpayers. The organic statute allows agencies to count purchasers from small business suppliers toward socioeconomic contracting goals. Contractor(s) shall maximize opportunities for multiple 3rd-party suppliers at the product level and extend opportunities for 3rd-party small business involvement.”

GSA says this e-marketplace pilot will try to bring some semblance of transparency and understanding to how agencies are buying from online markets, which has increased to $260 million in 2018 from $135 million in 2014.

The draft solicitation comes about three months after GSA sent its report to Congress where it described its findings from the year-long data collection effort.

This document, and eventually the final request for proposals and awards, kicks off the final piece of the first stage of this effort. Comments on the draft RFP are due Aug. 1.

Testing only one approach

Congress mandated GSA test out different approaches to make it easier for agencies to buy commercial products in Section 846 of the fiscal 2018 defense authorization bill.

GSA decided to start with the e-marketplace concept first, while some industry experts encouraged the agency to pilot all three approaches laid out by Congress: e-commerce and e-procurement platforms too.

“By artificially and unilaterally narrowing the focus of the Section 846 pilot, this approach has generated concerns regarding its consistency with statutory requirements and its impact on competition in the federal market. Moreover, by not fully exploring all commercial e-commerce solutions, GSA risks restricting opportunities for platforms that do not fall within the e-marketplace model,” wrote Roger Waldron, president of the Coalition of Government Procurement, in a February blog post. “Specifically, pursuant to Section 846, GSA is responsible for establishing the protocols and rules governing the use of commercial e-commerce platforms. By narrowing its focus to only one model in the commercial market, GSA’s approach raises significant questions about whether the agency can appropriately establish protocols and rules that would accommodate the unique aspects of the commercial e-commerce platforms that are not included within the e-marketplace model.”

The draft solicitation doesn’t address GSA’s plans to pilot the other two models.

It does, however, try to tackle some of the other concerns industry and agency experts highlighted over the past year.

For instance, one ongoing concern about the entire e-marketplace initiative centered on supply chain risks and how a third-party vendor would ensure the security of products.

In the draft RFP, GSA says “the contractor(s) shall have processes in place to vet 3rd party suppliers prior to those suppliers joining the commercial e-marketplace platforms, taking competition and supply chain risks into account. This vetting process shall be published in a transparent manner on the e-marketplace platform provider’s site and will publicly disclose all supplier fees associated with selling on the platform.”

Tracking small business awards

A second area of concern focused on small business contracting goals.

Again, GSA tried to address the potential issue in the draft, “The contractor(s) shall outline their capabilities related to identifying the various socioeconomic groups, to include whether products can be filtered on certain designations.”

Additionally, GSA wants the platform providers to make sure “agencies and users shall have the ability to filter on small business, socioeconomic (e.g. AbilityOne, Federal Prison Industries) and other designations as well as the ability to see those designations at the product level, when available.”

Finally, a third issue that several industry groups were uneasy about is around the collection and use of data from these transactions.

Once again, GSA tried to address that issue in the draft RFP, “GSA seeks purchasing and spend data from the commercial e-marketplace platform providers, both at the account level (for buyer’s use) as well as at the platform level (for GSA’s collection and dissemination out to agencies). This data will be used to help agencies make informed buying decisions as well as to get a better understanding of what is being introduced into their supply chain. All data is owned by the government and will be transferred at the end of the contract period.”

GSA also laid out the type of data the e-marketplace provider will collect and the restrictions around the use of such data.

“Contractor and/or contractor personnel shall not divulge or release data or information developed or obtained in performance of this effort, until made public by the Government, except to authorized government personnel or upon written approval by the GSA contracting officer,” the draft solicitation states. “The contractor shall not use, disclose, or reproduce proprietary data that was developed or obtained under this e-marketplace platform contract and/or bears a restrictive legend, other than as required in the performance of this effort.”

Ahead of this proof of concept, GSA hoped Congress would make some legislative changes to help bring the platform closer to the commercial sector. But, so far, Congress has balked at many of the major changes requested by GSA and the administration.

GSA expects to award this proof of concept toward the end of calendar 2019 and it will last about a year.

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