From “GSA’s Commercial Marketplaces Initiative: Opening Amazon & Other Private Marketplaces To Direct Purchases By Government Users,” by Christopher Yukins, Kristen Ittig, Abraham Young & Eric Valle (Thomson Reuters – Briefing Papers, December 2020)
The authors — Chris Yukins, Kristen Ittig, Abraham Young and Eric Valle — will join a webinar on the GSA “commercial platforms” at noon Eastern on Monday, March 22, 2021 — register here
Article is also available on the Social Sciences Research Network (SSRN)
The U.S. General Services Administration (GSA) opened a new chapter in public procurement by awarding three contracts—to Amazon Business, Overstock.com, and Fisher Scientific—which will allow federal users to buy directly from online electronic marketplaces, with sales anticipated to total $6 billion annually. This proof-of-concept effort, dubbed the “commercial platforms” initiative by GSA, marks a radical departure from traditional procurement practices because it will allow individual Government users (not necessarily procurement officials) to make “micro-purchases” (generally up to $10,000) using Government purchase cards. By removing the federal procurement system as an intermediary in the purchasing process, and in essence outsourcing the selection of available sources to private providers of electronic platforms, GSA’s initiative has both reshaped procurement and potentially redrawn a marketplace.
This paper reviews the purpose and history of GSA’s commercial platforms initiative, which began with a mandate from Congress to explore electronic commerce options and evolved through long exchanges with industry, users, and other stakeholders. In assessing the reasons for the initiative, the paper notes a longstanding concern that users’ needs were not being met by the traditional procurement system. The paper discusses GSA’s decision to steer the initiative to existing commercial platforms and reviews key elements of the solicitation used to frame the “no-cost” contracts with the online marketplaces. Because Amazon Business was by far the most prominent of the awardees—indeed, Amazon had played an ongoing role in pressing for the procurement—and vendors may want to sell through the commercial platforms to reach federal customers, this paper focuses on Amazon Business’ procedures in discussing how vendors might join the commercial platforms. The paper concludes with a series of Guidelines that vendors and other market participants might use, as they enter this new corner of the federal marketplace.
Additional information:
Abraham L. Young, Empowering the End-User as Procurement Agent Through E-Commerce, Public Contract Law Journal, Vol. 49:4 (2020)
Response from Michael Tregle, Buyer Incentives and Administrative Burdens in the Commercial Platforms Initiative – In response to the published piece, Mike Tregle argues that “GSA may have gone a step too far by devolving buying authority down to end-users. In partial rebuttal . . . I will address the impact such a change may have on best value determinations and the related administrative burdens of oversight and management of the program. The [commercial platforms initiative], as currently implemented, may in fact reduce overall value while increasing the risk of waste and the administrative burdens on agencies.”
GSA Delays “Electronic Marketplaces” Contract Awards
Webinar: Opening Online Marketplaces to Government Micro-Purchases — June 30, 2020
