New legislation passed by the House of Representatives on July 14 contains language that would allow the Pentagon and federal agencies to buy directly from commercially run online marketplaces such as Amazon, OfficeMax, Home Depot and other e-commerce retailers. The bill, H.R. 2810, is the National Defense Authorization Act for Fiscal Year 2018. It passed in the House 344 to 81. The Defense Acquisition Streamlining and Transparency Act, later merged into the Defense Authorization Act, was designed to reduce bureaucracy and costs for the government. The Washington Post recently stated that House Armed Services Committee Chairman Mac Thornberry (R-Tex.) sponsored the bill, saying ““Everybody understands what a difference Amazon has made…we’re trying to help DoD keep up with the changes in business practices with the goal of getting items faster, cheaper and keeping up with the changes in technology.”

Currently, agencies purchase goods through the General Services Administration (GSA) through pre-negotiated contracts. The GSA already manages an online purchasing service called GSA Advantage, but this bill would allow the government agencies to go directly through private retailers for their basic supplies. This is a major development that will inject a substantial new stream of commerce and competition into the e-commerce arena. Even without this development, the Department of Commerce has reported that Americans purchase goods at the pace of $1.2 billion a day online, an amount which doubled in the last five years, and which is projected to double again in the next five. These projections do not take into account this major development.

The bill was placed on the Senate calendar and is expected to be decided on in the coming weeks. Husch Blackwell will continue to monitor this legislation and other e-commerce matters.