Reporter's Notebook

White House, GSA positions on e-commerce platforms perplex industry association

The Coalition for Government Procurement, an industry association, asked White House advisor Peter Navarro to further explain how the President’s executive or...

Jason Miller@jmillerWFED

March 2, 2020 5:35 pm

7 min read

With Overstock’s decision to withdraw its bid protest of the e-commerce platform solicitation, it looks as though the General Services Administration has a clear path to kick off its three-year pilot.

But wait, not so fast. The White House’s executive order on e-commerce platforms creates a whole other level of potential roadblocks to this effort.

President Donald Trump signed the order on Jan. 31 with a goal of cracking down on counterfeit products and threatening Amazon, Walmart.com, eBay and others with suspension and debarment unless they address this growing concern.

Immediately, it was clear based on Navarro’s comments, GSA’s e-commerce platform effort faced a new set of obstacles.

“This crisis is not about any one e-commerce platform. This is about e-commerce platforms as a class playing 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,” said Peter Navarro, the assistant to the President for trade and manufacturing policy, during a press call on Jan. 31. “Under current lax interpretations of existing rules and laws, e-commerce platforms face virtually no liability for their counterfeit trafficking. Today, virtually immune from the kind of laws and liabilities that govern bricks-and-mortar retail, e-commerce platforms such as Amazon, Shopify, Alibaba, eBay, JD.com, WalMart.com and a constellation of lesser players provide the digital hubs that perniciously interconnect vast cadres of online third-party counterfeiters and social media enablers, like Instagram, to American consumers.”

At the same time, GSA is on the path to setting up a new e-commerce platform, potentially with Amazon or Walmart or eBay, and will not require the platform providers to follow specific laws like the Trade Agreements Act or the Buy American Act because purchases are under the micro-purchase threshold of $10,000. The path cleared last week when Overstock withdrew its protest. The Government Accountability Office said Overstock’s lawyers offered no explanation as to why it had given up on the protest. Overstock filed its complaint in January soon after GSA updated its request for proposals. Some experts say it may be because after reading the documents GSA submitted to GAO, Overstock realized its chances of winning were small. GSA now is expected to make an award for its pilot in the coming months.

These mixed messages coming from the White House and GSA is leaving some industry organizations seeking answers.

The Coalition for Government Procurement sent a letter to Navarro on Feb. 25 seeking clarification of the administration’s position on e-commerce platforms.

Roger Waldron is the president of the Coalition for Government Procurement.

“Through GSA’s program, the government effectively is endorsing ‘e-commerce platforms as a class playing by a different set of rules,’ the very problem the Executive Order seeks to address,” writes Roger Waldron, the president of the Coalition for Government Procurement. “At the same time, it squanders a perfect opportunity to implement the government’s goals by mandating, through contract, platform provider responsibility for product authenticity and legal compliance. A clear, consistent articulation of government policy here would be of great value to our members, as it would help them in their efforts to address the needs of the government market. So too, it would rationalize the government’s approach to e-commerce and risk mitigation. Any guidance you could provide here would be very much appreciated.”

Waldron hosts Off the Shelf on Federal News Network.

In an email, Waldron added the e-commerce market could be worth as much as $60 billion if the administration includes the purchases from GSA’s schedules program.

“With revenue comes responsibility. The administration’s Executive Order and Dr. Navarro’s comments are clear statement that e-commerce platforms should be responsible for the integrity of their marketplaces,” he wrote. “In contrast, GSA’s solicitation, as recently amended, offers a conflicting view, namely, that each transaction is governed by the rubric ‘buyer beware.’ The solicitation essentially insulates e-commerce platforms from responsibility for the integrity of their marketplaces. Just as significant, under the Multiple Award Schedules, contractors are held responsible for the integrity of their contracts and GSA vets each contractor to ensure the integrity of the MAS market, as whole.”

Is anyone paying attention in Congress?

This leads us to the question about whether GSA even knew about the executive order.

Waldron and others say it looks doubtful from the outside.

“It is starting to look like the right hand doesn’t know what the left hand is doing,” he said. “So, we’re left with two different perspectives on e-commerce security and accountability. The administration, through the Executive Order, supports making platform providers accountable for supply chain security and product integrity. GSA, apparently, has a different view.”

The question GSA and others have to start asking is what is the future of the e-commerce platform initiative? The main backer of this effort in Congress, Rep. Mac Thornberry (R-Texas), the ranking member of the Armed Services Committee, is retiring in January 2021. And lawmakers, generally speaking, don’t have long attention spans nor do they care much for initiatives they didn’t think of or pass.

HUBZone, FPDS transition updates

The next piece of the Integrated Acquisition Environment (IAE) is scheduled to transition to the new beta.sam.gov site later this month. GSA provided an update to industry on Feb. 25 detailing plans and benefits of moving the Federal Procurement Data System reporting functionalities to the portal.

By March 16, vendors who rely on FPDS will see improved capabilities, including:

Reports can now span 12 years instead of five
Reports can now return 150,000 rows instead of 30,000
Report structure can now be easily shared (attributes, metrics, etc.)
Additional reportable data fields
Report creation wizard

GSA has been testing the new report generation capabilities for the last several months. It says it converted about 85% of existing ad hoc reports over to the new portal.

“We’ve worked a great deal with users who have a substantial amount of ad hoc reports prior to the migration to make sure that they understood. We’ve used robotics process automation (RPA) to be able to migrate over the existing ad hoc reports and data,” said Judith Zawatsky, assistant commissioner in the Office of Systems Management in GSA’s Federal Acquisition Service, in an interview with Federal News Network in February. “It is incredibly innovative work. The other thing we are doing because we knew there was latency on system last time and we know migrating of the reports will drive greater usage on the platform. The team is designing for a heavy push in the beginning so that they do not cause any issues with access to the system.”

The FPDS reporting capabilities will be the fifth system migrated into the new IAE environment under beta.sam.gov. Next, GSA said, is to remove the beta from the new site and migrate the old SAM.gov to the new portal.

Over at the Small Business Administration, employees are getting ready for a big transition of their own. SBA released frequently asked questions (FAQs) to help small firms better understand the new requirements for the Historically Underutilized Business Zone (HUBZone) program that started in January.

The HUBZone Council posted the FAQs on its website.

In the 11-page document, SBA addressed 36 questions ranging from annual recertification requirements to employee residency requirements to contracting compliance regulations.

Agencies have never met the governmentwide goal of awarding 3% of all contracts to HUBZone firms. In fiscal 2018, agencies awarded 2.05% or $9.9 billion.

SBA hopes these new regulations will make the program easier for firms to take advantage of thus creating more companies with headquarters in HUBZones.