The danger in GSA’s online marketplaces

A little commentary from the General Services Administration on our website urges government buyers to use the agency’s multiple-award schedule contracts. The venerable MAS contracts generate about $45 billion in annual sales.

Over the years, GSA has continually tinkered with the awards schedules to keep the program relevant. Now it’s about to collapse the 24 individual schedules into one. GSA will release the new consolidated schedule and its terms and conditions on Oct. 1, with a goal of moving all vendors to one schedule by the end of fiscal 2020. GSA let industry know about the consolidated schedule plan late last year.

No change in federal procurement is ever simple. Center Law Group’s Barbara Kinosky, whom I’ve interviewed from time to time, wrote this about the consolidation: “We understand modifications to add the new consolidated [special item numbers] will not be accepted after Sept. 30 until sometime in mid-January 2020 after contractors have accepted the mass modification incorporating the new consolidated schedule terms and conditions.”

See what I mean?

Once the conversion is done, buyers and sellers will, in theory, have a simpler, more uniform contracting system to deal with. The consolidation is one of many updates and improvements GSA is making to modernize the MAS and the supporting tools like e-modification.

When it’s all done, the schedule will incorporate reliable contractors with predictable terms and conditions. Which brings me to another initiative, namely the e-marketplace. It’s hard to say whether GSA would have done this on its own, since it seems somewhat superfluous next to the modernized multiple award schedule system. But the agency received orders to do so in Section 846 of the 2018 National Defense Authorization Act.

‘Amazon’ amendment to federal acquisition

Congress treats each year’s NDAA the way sucker fish treat a whale. All sorts of wants unrelated to national security attach themselves along for the ride.

The provision has been derided as the “Amazon” amendment, in at least some cynics’ expectation that somehow the online retailing behemoth, would somehow be the online marketplace for the government. But GSA statements show the agency intends to have multiple marketplaces. For instance, the July draft solicitation from portal providers referenced a program of “e-commerce portals” — not a singular portal. When I recently spoke with Federal Acquisition Service Commissioner Alan Thomas, he also said as much.

In the outside-of-government world, you also find a variety of multiple-vendor portals. One of the earliest, which I was surprised still exists, is the million-dollar web page.

Then there’s Amazon itself. You can find a lot of seriously questionable crap from suspicious sources there, along with zillions of perfectly legitimate items from reputable sources. Repeat customers soon learn this as they learn to distinguish.

Last week an expose in the Wall Street Journal noted more than 4,000 banned, substandard, un-federally-certified, and falsely represented products available via Amazon’s marketplace. Much of it comes from anonymous sellers, “many in China.”

The anecdote that got me told of a 23-year-old man killed in a motorcycle crash. His helmet had flown off his head. It had failed Transportation Department certification tests and had been recalled, yet it was for sale on Amazon. The one motorcycling product I bought via Amazon — a safety shirt — I got at the same price as if I’d gone to the original equipment manufacturer (OEM). Only I got free shipping. But my Japanese-made Arai helmet came from a physical store, an authorized reseller of Arai and other premium brand helmets. Besides, you need to try on a thing like a helmet no less than a jacket or pair of shoes.

For the GSA, that’ll be the challenge: Keeping only legitimate OEMs and authorized resellers in on however many portals it launches. That means total ease of use for government buyers, but careful vetting before a vendor hops on.

Congress wanted the portals for micro-purchases, buys under $10,000. GSA estimates that represents $6 billion in annual sales. For the government, lots of potentially hazardous products come in at that expenditure level. Copiers, PCs and printers all can pose cybersecurity dangers implanted by gray-market sources. Supplies can arrive substandard. Some printers will stop working if they don’t like the new toner cartridge. Pills and other drug forms might be counterfeit. Park Police bike helmets might have forged DOT certification. Uniforms might have been woven in slave-like factories.

I bought a replacement battery for the APC backup power supply I used for my computer at home. APC discontinued the model and no longer offers a battery for it. Rather than a new [uninterruptable power supply] I got a new battery for $25 using the Amazon site. It arrived on time from what looked like a normal dealer in the U.S., carefully wrapped and boxed. The battery carries no origin of manufacture. I charged it initially in the garage in case it burst into flames. But the unit kept cool.

GSA people often say they want to emulate the best in customer service available commercially. Portals like Amazon offer services so good they become the default buying place for millions of people. In crafting its marketplaces, GSA will have to emulate the Amazon convenience without the underbelly of questionable sources.

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