The proposal appears in Section 801 of the House-passed 2018 National Defense Authorization Act (NDAA). It gives GSA authority to choose two online marketplaces for government without using competitive procedures.
“We think that’s a real step in the right direction, and from our standpoint, we’re supportive,” Thomas told the House Oversight and Government Reform committee in testimony last week.
A group of contractors that sell through the GSA multiple award schedules is far less enthusiastic about the measure. “Hundreds, if not thousands, of commercial firms with their own online platforms will see their access to the federal market limited to the two online platform providers GSA selects,” the Coalition for Government Procurement wrote on June 29. “Firms that previously contracted directly with the federal government likely will pay fees to, and, largely dictated by, an online provider for access to the federal market.”
Thomas acknowledged that the marketplaces would have to meet federal procurement mandates. “There are, as you know, some specific regulatory and policy concerns that the federal government has that those of us who just buy as private citizens through Amazon don’t necessarily have to take into account,” he said. “So we want to make sure that those are accounted for in the appropriate way.”
According to the House Armed Services Committee report on the 2018 NDAA, “Marketplaces would be limited to those that are commonly used in the private sector; provide a dynamic selection of products and prices from numerous suppliers; provide procurement oversight controls, such as two-person approval for purchases; and can screen suppliers and products to ensure compliance with suspension and debarment, domestic sourcing, and other similar statutes.” Nonetheless, Thomas said, online marketplaces offer speed and savings.
Rep. Mac Thornberry (R-Texas), who chairs the House Armed Services Committee (HASC) and sponsored the bill that became the NDAA provision, favors online markets because they would enable the Pentagon to buy “commercial-off-the-shelf goods, ranging from bottled water to treadmills or even MRI machines,” faster and at lower cost than through the DoD contracting process or through GSA,” according to a HASC summary of the measure.
The House concedes that it may be prudent to still buy some commercial items through traditional means, so it expects “the Secretary of Defense to issue implementation guidance that may limit the products that the Department of Defense may purchase on marketplaces,” according to the committee report. Nevertheless, the report notes, “marketplaces generally ensure competition and price reasonableness, and therefore would obviate many of the time-consuming government-unique procurement processes GSA and the Department of Defense perform today.”
Use of marketplaces also would allow government to track and analyze procurement data. “Any business will tell you that this ‘spend analysis’ is critical to efficient operations. For the government, that kind of transparency and accountability would be revolutionary,” according to the HASC summary.
When backers of the measure talk about online marketplaces, they frequently refer to Amazon, the most commonly used consumer online marketplace in the United States. Amazon’s work-focused e-mall, Amazon Business, clearly has expressed an appetite for government sales, having inked a deal in January with U.S. Communities, a buying cooperative for more than 55,000 state and local public-sector agencies,that could run 11 years and rake in $5.5 billion.
The Senate Armed Services Committee has passed its version of the 2018 NDAA, but the full Senate has not yet voted on it. The Senate committee bill has no references to online marketplaces.