Article

GSA Develops E-Commerce Portal

May 14, 2018

Section 846 of the 2018 National Defense Authorization Act (“the Act”), “Procurement through Commercial E-Commerce Portals,” establishes an e-commerce portal program, similar to Amazon and other e-commerce platforms, for the acquisition of commercial items by the Federal government. Section 846 defines an e-commerce portal as “a commercial solution providing for the purchase of commercial products aggregated, distributed, sold, or manufactured via an online portal” and requires the General Services Administration (“GSA”) to develop the portal “through multiple contracts with multiple commercial e-commerce portal providers.” Commercial e-commerce sites usually include a provider that can fulfill orders directly and/or provide an opportunity for third-party vendors to sell products.

The Act requires GSA to establish the e-commerce portal program while the Office of Management and Budget (“OMB”) is tasked with oversight and reporting requirements. The Act establishes a three-phase implementation plan:

Phase I – Implementation Plan: GSA must establish an implementation plan and schedule within 90 days.

Phase II – Market Analysis & Consultation: GSA and OMB must report their recommendations and information to Congress within one year of the Implementation Plan.

Phase III – Program Implementation: GSA and OMB will submit guidance on how to implement and govern the program within two years of the Implementation Plan.

On January 9, 2018, GSA and OMB held a town hall-style public meeting with industry representatives to kick off Phase I. Industry representatives, including those from Amazon and Overstock.com, were present. They emphasized how important balancing regulation and the Federal government’s social and economic priorities, such as program set-asides, were to attract both federal buyers and commercial sellers to portal development efforts. GSA officials stated the program aimed to reduce barriers to entry for sellers and to increase buying efficiencies for federal buyers.

Industry representatives expressed hope that a properly implemented e-commerce portal could drive product prices below, perhaps significantly, current market prices. Some industry participants encouraged GSA to adopt existing commercial terms and conditions, exempting portal providers from certain procurement regulations, to achieve the efficiencies, value, and transparency of the commercial market. Such commentators looked to GSA to set basic requirements for sellers and avoid overregulation, which could create barriers to entry. However, other attendees suggested that the portal would require strong compliance mandates to prevent questionable purchasing and incorporate government public policy priorities.

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