MA

GAO Assesses the New Federal E-Commerce Portal Implementation Plan

Published: August 02, 2018

Acquisition ReformContracting TrendsDigital GovernmentGSANational Defense Authorization ActOMB

The 2018 Defense Authorization required GSA and OMB to create a program to procure commercial products through commercial e-commerce portals.

Congress is looking for ways to improve the efficiency and effectiveness with which federal agencies may buy commercially available products. Section 846 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2018 directed the General Services Administration (GSA) and the Office of Management and Budget (OMB) to establish and implement a program to procure commercial products through commercial e-commerce Web portals. The first requirement was to develop an implementation plan.

In a recent report, Buying Commercial Products Assessment of the E-Commerce Portal Implementation Plan, the U.S. Government Accountability Office (GAO) fulfilled its requirement under the NDAA to assess the implementation plan, which GSA and OMB issued on March 15, 2018.

Definitions

The 2018 NDAA defines a ‘‘commercial e-commerce portal’’ as a commercial solution providing for the purchase of commercial products online. The NDAA states that the term does not include an online portal managed by the government for, or predominantly for use by, government agencies. The NDAA directs GSA to carry out the program through contracts with multiple commercial portal providers. The NDAA also defines “commercial product” as a commercially available off-the-shelf item.

Plan Phases

In the assessment GAO presented the various phases, task descriptions and due dates that GSA and OMB established as part of their implementation plan. (See table below.)

Potential e-Commerce Models

GSA and OMB identified the following three models for potential adoption, recognizing that implementation will likely involve a mix of elements from each of the three models.

  • E-Commerce Model: Product vendors sell their products directly to the consumer through e-commerce portals. The portal providers are responsible for the fulfillment of product orders, including invoicing and delivery.
  • E-Marketplace Model: An online marketplace is run by one vendor—the portal provider. The marketplace can offer third party vendor products and the portal providers’ products as well. Portal providers and third-party vendors are generally responsible for fulfilling orders for their respective products.
  • E-Procurement Model: In this model, a third party provides software that enables price comparisons across multiple portals. The third party does not sell products directly to the consumer. Suppliers on these portals are responsible for fulfilling orders.

Legislative Changes Necessary

GSA and OMB recommend the following legislative changes that they believe are needed to facilitate the implementation of the e-commerce portals program. (Emphasis added.)

  1. Raise the micro-purchase threshold from $5,000 for the Department of Defense (DOD) and $10,000 for civilian federal agencies to $25,000 for purchases through e-commerce portals.
  2. Authorize GSA to establish procedures for use of the e-commerce portals program, which would be considered compliant with federal competition requirements.
  3. Allow GSA, at its discretion, to use indefinite delivery/indefinite quantity contracts to achieve acquisition efficiencies without having to negotiate up-front pricing with suppliers.
  4. Clarify and broaden the definition of an e-commerce portal so that GSA may use a wider variety of models and approaches.

What’s Next?

GSA and OMB stated that they plan to conduct detailed analysis and market research as part of Phase 2, and GSA acknowledge they still have many issues to address as they move forward. GAO did not make any recommendations as part of this assessment, but said they will continue to track the implementation the program. The FY 2018 NDAA requires GAO to review of the program’s implementation 3 years after the first contract with a commercial e-commerce portal provider is awarded.

On August 1st, Laura Stanton, Assistant Commissioner of the Federal Acquisitions Service (FAS) Office of Enterprise Strategy Management, published a blog addressing relevant provisions in the FY 2019 NDAA conference report that was released last week and two Requests for Information (RFIs) for suppliers selling on commercial e-commerce portals and from providers of commercial e-commerce portals. To summarize . . . so far, Congress is addressing some, but not all, of the recommended legislative changes requested by GSA. Stanton also thanked the companies that provided over 50 responses across the two RFIs and stressed that further opportunities will come for industry to provide feedback and engage in the discussion.