The volume of goods and services the federal government purchases through online portals and charges to its credit card is small in comparison to the grand total the government spends every month.
But the value of its online transactions is growing and has more than doubled over the last four fiscal years, says the General Services Administration, which manages and supports procurement and the basic functioning of federal agencies.
That quarter of a billion dollars is small—0.8%—of the overall $30.6 billion that various federal agencies spent through the GSA Smart Pay program last fiscal year. GSA Smart Pay is the credit card and electronic payments processing program used by about 560 government agencies.
Congressional mandate backs ecommerce
The GSA is looking at ecommerce and online portals as a new alternative to older and manual procurement programs, making it easier for companies to do business with the government, the GSA says. “Analysis of the government purchase card program found a significant and growing portion of federal spending is taking place via commercial ecommerce portals,” a GSA spokesman says.
The GSA is under a congressional mandate to plan and implement an ecommerce portal program that would ultimately reduce the number of manual procedures and bureaucratic steps for vendors, the government says.
Congress in 2018, as part of passing a spending bill for the U.S. Department of Defense, directed the GSA and the Office of Management and Budget (OMB) to research and develop a plan for how the Defense Department could develop and use an ecommerce portal for purchasing commercial goods. Since then, the initial focus on the Pentagon discussion and planning for an ecommerce portal has morphed to include how such a portal could be used across the federal government by multiple agencies.
Last week the GSA announced it will plan and launch a pilot—what the government calls a proof of concept—to “establish a program to procure commercial products through commercial ecommerce portals.”
Dealing with multiple marketplaces
The GSA has yet to work out such details for the portals program as the overall cost of operations, determining which B2B marketplaces such as Amazon Business may be involved, and which agencies may participate. “GSA does not intend to start with specialized marketplaces/product categories until it has performed appropriate research to know when and how such specialty marketplaces fit,” the spokesman says.
One issue has been decided. Any e-procurement program for federal agencies will not operate on a single ecommerce platform or be limited to just one marketplace. “GSA’s intent is to launch an initial proof of concept with multiple e-marketplace providers by the end of calendar year 2019, as by law this cannot go to a single provider,” the spokesman says. “GSA is not developing a portal; instead, we have been asked to partner with portal providers who already offer commercial ecommerce platforms.”
For now, the launch of a pilot project coincides with the GSA’s ongoing fact-finding and market research effort, says GSA administrator Emily Murphy.
GSA is focused on continuously improving the federal buying and selling experience through the commercial platform program as a part of our broader federal marketplace strategy,” Murphy says. “By creating a modern buying experience for commercial items, GSA will reduce the burden on small businesses and our customer agencies.”