The General Services Administration (GSA) and the Office of Management and Budget (OMB) have embarked on the next phase to implement Section 846 of the National Defense Authorization Act (NDAA) for FY 2018, which will establish a “program to procure commercial products through online marketplaces.” The next phase, entitled Market Research and Consultation is scheduled for completion in March 2019.
As the next phase gets underway, GSA and OMB have been receiving important feedback from the public and government stakeholders on the Phase 1 implementation plan delivered to Congress in March. Over the summer, GSA hosted a town hall-style public stakeholder meeting to obtain feedback on the Phase 1 report and provide insight into the thought process behind the report. Additionally, the Government Accountability Office (GAO) issued a required report discussing the major issues surrounding the implementation plan. Here is a summary:
In addition to gathering public feedback, GSA also held this meeting to hear from commercial e-commerce providers and gain insight into their standard commercial practices. Opening remarks from Allison Brigati, GSA Deputy Administrator, and Alan Thomas, Federal Acquisition Service (FAS) Commissioner, reminded the group of the reasons this effort is taking place. For GSA’s customer agencies, the goal is to speed up the purchasing of routine commercial items. Doing so allows the acquisition workforce to focus more on mission-oriented work. For industry, simplifying the process for routine commercial purchases means reduced administrative burdens and broader access to the federal marketplace for new and small businesses.
Representatives from SAP Ariba, Overstock, LLC, Clover Imaging Group, DollarDays, IValua, and Juniper Networks discussed their e-commerce practices and policies. However, a lot of discussions centered around the proposed increase of the micro-purchase threshold (MPT) to $25,000 when using GSA-approved portals. Industry voiced concerns about compliance and the inequity in not implementing the same MPT for GSA Schedule purchases. This issue wasn’t resolved, but GSA did get a lot of feedback on this proposal. GSA plans to introduce more definitive terms and conditions for the use of the increased micro-purchase threshold.
US Government Accountability Office (GAO) Report
In July 2018, the GAO issued a report to Congressional Committees, entitled “Buying Commercial Products Assessment of the E-Commerce Portal Implementation Plan. GAO was directed in the 2018 NDAA to review the Phase 1 implementation plan. GAO wrote its report after reviewing the Phase 1 plan, reviewing public comments, and meeting with industry stakeholders. While GAO didn’t make recommendations, issues were outlined that GAO feels should be considered as the implementation process moves forward. Issues raised for consideration centered on how:
- Existing procurement programs will be impacted
- Portals will operate within current procurement framework
- Purchase data will be obtained through the portal
- Progress will be measured
You could say that Phase 1 was theoretical and laid out goals and precepts based on initial conversations with industry and GSA’s federal government customers. The implementation plan scratched the surface of everything involved in this major transformation of commercial item purchasing. In Phase 2, GSA will take a deep dive into the nuts and bolts to determine the look, terms and conditions, and instructions for use of an e-commerce platform.
GSA started by issuing two Requests for Information (RFIs), one for suppliers selling on commercial e-commerce portals and the other for providers of the portals. In the RFIs, GSA asked suppliers to comment on product categories to be included, terms and conditions, and program design. They asked portal providers to comment on spending trends, data standards, user experience, cybersecurity, and terms and conditions. The RFIs also requested comments from suppliers and providers on their idea for a proof of concept.
In addition to the RFIs, GSA plans to consult with customer agencies to find out what they want and need from an e-commerce portal. An additional industry day is anticipated to be held during fall 2018. Following its market research, GSA plans to proceed with a proof of concept during FY2019 with a goal of having select agencies participate with the proposed $25,000 micro-purchase threshold included along with defined ordering procedures.
The work continues—the results of which could mean a new era in federal government procurement and acquisition. For any questions, please contact Shawne Carroll or one of our GSA Schedules specialists at 301.231.6200.