The General Services Administration (GSA) and the Office of Management and Budget (OMB) released a joint report to Congress today to create a ‘proof of concept’ e-marketplace portal for purchases below $25,000.
The plan released by GSA follows the mandate from Section 846 of the National Defense Authorization Act (NDAA) for FY18, which requires GSA to create a commercial portal to modernize the experience of buying commercial-off-the-shelf products while streamlining the process.
“We’re planning to start small, test, and refine as we go, and find how we can really grow this program in an informed manner,” said Keil Todd, program manager for the Commercial Platforms Initiative at GSA, during a press conference.
The initial proof of concept will only allow for acquisitions under the micropurchase threshold. However, to incentivize agencies to use the portal, GSA is asking Congress to raise the limit on micropurchases from $10,000 to $25,000 for acquisitions through the portal, although the agency plans to continue even if Congress does not approve.
“At that dollar level, we’ve now picked up a potential 23 percent of all open-market transactions, but we would only be picking up about one percent more of the total dollars,” said Jeff Koses, senior procurement executive at GSA.
While Section 846 of the 2018 NDAA encouraged GSA to look specifically at IT as an area for an online portal, GSA declined to create a special market for IT due to the focus on micropurchases during the proof of concept.
“GSA will target the range of routine commercial items found on today’s commercial e-commerce platforms (with office supplies and industrial products being amongst the most common) to align the purchasing experience with the commercial market and provide a strong incentive to use the program,” the report states.
The portal aims to address the issue of $260 million in Federal spend annually that goes through online marketplaces to buy common goods. Under a GSA portal, agencies would likely see savings and better deals negotiated through business-to-business type transactions.
However, some obstacles still remain for the portal, GSA’s report notes. Potential suppliers expressed their concern about a portal vendor using data to outprice competitors on similar topics. Meanwhile, portal vendors expressed concerns over their ability to use data to add new vendors when needed.
GSA plans to release a draft solicitation for the portal in fiscal year Q3, with the hope for an initial pilot by the end of the calendar year. GSA noted that they plan to award multiple portals.