In the latest step towards delivering on the long-promised “Procurement Through Commercial e-Commerce Portals” program, the General Services Administration has announced plans to build a proof-of-concept for federal online shopping, aiming to issue an RFP by the end of the year for web-based acquisition platforms.

According to GSA’s notice, the platforms will be based on an “e-marketplace” model — one that connects federal customers to a range of competing vendors, similar to online shopping websites in the private sector.  These “e-commerce portals” will carry “routine commercial items found on today’s commercial e-commerce platforms (with office supplies and industrial products being amongst the most common)[.]”  Purchases will be limited to the micro-purchase level, which is currently set at $10,000.

The agency expects to award multiple prototype contracts, and it indicated that further proof-of-concept contracts may be needed to test other online purchasing models.  These other purchasing models include an “e-commerce model,” under which each portal provider would serve as the seller of goods, and an “e-procurement model,” under which the acquiring agency would manage the platform using software supplied by a contractor to facilitate sales through multiple vendors.  On this point, GSA explained that “the one model that best fits GSA’s priorities for an initial proof of concept is the e-marketplace model.”

GSA’s plan is the second phase of its e-commerce portal program, which was established by Section 846 of the National Defense Authorization Act for FY 2018.  Under Section 846, GSA must create online portals that federal employees can use to purchase basic commercial commodities.  We have previously written about GSA’s e-commerce portal program in blog posts here and here.

Notably, Section 846 permits GSA to consider “exemptions” from various federal procurement regulations for e-commerce portals, while also using standard commercial portal terms “to the maximum extent practicable.”  But it has proven difficult to determine how best to strike a balance between standard commercial practices and longstanding principles of government procurement (e.g., domestic sourcing requirements, socioeconomic preferences, etc.).  To date, GSA still has not decided what exemptions it will permit or what commercial terms it will use, and the recently published Notice indicates that GSA will rely on the upcoming prototypes to help decide those issues.

GSA will also use the prototypes to evaluate data usage and protection issues.  On this point, GSA noted that Congress amended Section 846 of the 2018 NDAA to impose limits on the ability of certain contractors to maintain or track data on “purchasing trends or spending habits.”  Yet the specifics of how e-marketplace data will be collected and tracked remain unresolved at this time.

To help with this proof-of-concept procurement — which, as noted, will be limited to the micro-purchase threshold — GSA’s Notice also requested that Congress raise the micro-purchase threshold from its current $10,000 standard to $25,000.  By starting at the micro-purchase level, GSA indicated that it will be in a better position “to assess the impacts and benefits of the program, without the complexity or rules that apply over the [threshold], prior to making significant investments in the program.”

Contractors interested in the program should stay tuned for additional developments in the coming months.  GSA already has indicated that before issuing a solicitation late this year, it will publish a draft solicitation and take additional steps to further coordinate with industry.  Over the last 18 months, GSA has held several “industry days” that have substantially shaped the Government’s approach at this proof-of-concept phase, and other similar opportunities to engage may yet arise before year’s end.