Key Notes:

  • GSA, in consultation with OMB, has released the initial implementation plan for e-commerce portals under Section 846 of the FY 2018 NDAA.
  • Section 846 directs the GSA to establish a program to procure commercial off-the-shelf items through e-commerce portals operated by private contractors.
  • GSA intends to begin initial implementation ahead of the original timelines proposed in the NDAA.

The General Services Administration (GSA), in consultation with the Office of Management and Budget (OMB), has released the initial implementation plan for e-commerce portals under Section 846 of the FY 2018 National Defense Authorization Act (NDAA). Section 846, Procurement Through Commercial E-Commerce Portals, directs the GSA to establish a program to procure commercial off-the-shelf (COTS) items through e-commerce portals operated by private contractors (dubbed the “Amazon Amendment” by industry).

The March 2018 implementation plan includes initial findings, legislative recommendations and an “aggressive but achievable timeline to evolve COTS buying across the whole Government.” According to the plan, with the requested legislative changes, “GSA is prepared to begin an initial implementation of this effort ahead of the original timelines proposed in the NDAA legislation.”

As stated in the plan, GSA’s “initial research indicates that the current environment for purchasing COTS items is overly burdensome on the Government’s acquisition workforce and imparts high administrative costs on product suppliers.” According to GSA, Section 846 presents an opportunity to modernize the procurement of commercial products:

The opportunity exists to change Federal buying behaviors by modernizing the buying experience in partnership with commercial portal providers. This legislation comes at a time of much innovation (and disruption) in the procurement space, with the environment changing at a rapid pace. The solution will need to be dynamic, flexible and continuously benefit from an ever-evolving market.

GSA’s plan recommends legislative changes to “simplify and streamline the COTS item buying experience,” including:

  • Raising the micro-purchase threshold from $5,000 for DoD and $10,000 for civilian federal agencies to $25,000 for purchases through GSA-approved portals, while requiring that transactional data be recorded and shared across the government.
  • Revising the statutory definition of “commercial e-commerce portal” to ensure that GSA can include a “variety of electronic procurement business models, while enabling a more dynamic and competitive marketplace environment.”
  • Amending the application of statutory competition requirements to include the procedures established by the GSA administrator for purchasing through the commercial e-commerce portals.

In addition, the plan asks Congress to authorize additional contractual arrangements “that maximize efficiency for buyers, portal providers, and sellers.” The plan explains that GSA “anticipates a direct contractual relationship only with commercial e-commerce portal providers,” but that GSA “may consider use of an IDIQ contract that allows GSA to have a relationship with both a portal provider and suppliers that sell on the portal platform” if that strategy would generate greater efficiencies. The request for statutory authority would “allow GSA, at its discretion, to use IDIQ contracts to achieve certain acquisition efficiencies … without also having to negotiate up front pricing with suppliers.”

GSA intends to exceed the statutory deadlines where possible. The plan states that “GSA will meet or exceed the outlined phases identified in the NDAA legislation,” which include:

  • Phase 1 (90 days): implementation plan and policy assessment
  • Phase 2 (90 days + 1 year): market research and consultation
  • Phase 3 (90 days + 2 years): implementation guidance
  • Phase 4 (by end of FY19): potential initial rollout
  • Phase 5 (by end of FY20): assess and scale rollout

The implementation plan states in conclusion that Section 846 is “an opportunity for the Government to review, assess, and modernize its current approach toward the buying of COTS items”:

Commercial technology has made buying easier, increased transparency, and opened opportunities to a broader pool of suppliers. The online markets continue to evolve through new technology, streamlining commercial business practices and emerging suppliers. … The Government will need to continue to iterate its approach to stay aligned with, and benefit from, commercial practices for the purposes of expediting procurement and ensuring programs can focus their attention on mission critical activities.

According to a press release that accompanied the implementation plan, “stakeholder engagement will remain GSA’s and OMB’s highest priority” throughout the implementation phases. Interested parties can follow GSA’s work on the e-commerce portals plan at the Commercial Platform Initiative page on the GSA Interact website.