In a move to provide a secure and modern buying and spend-management experience for government agencies, the federal government took an initial step Friday to work with three established ecommerce organizations—Amazon.com Inc.’s Amazon Business, Thermo Fisher Scientific Inc. and Overstock.com Inc.—to test the use of commercial e-marketplaces for annual government procurement of up to $6 billion worth of products ranging from furniture and office products to laboratory supplies.

The GSA said the pilot program, which covers purchases below the government’s “micro-purchasing threshold” of $10,000, is expected to make the three e-marketplaces available to buyers at government agencies within 30 days and run for up to three years. It noted that the e-marketplace program is designed to modernize and gain insights on the “open-market online spend” outside of existing procurement contracts; it added that such open-market spending on government purchase cards represents “an addressable market of $6 billion annually.”

“The ecommerce portals proof-of-concept is an important step in offering a solution for purchasing commercial products online that protects our federal supply chain against malicious and counterfeit goods, furthering our national security,” said GSA Administrator Emily Murphy.

Procurement and concierge services

Anne Rung, director of public sector, Amazon Business

“We applaud the GSA for moving this program forward,” said Anne Rung, director of public sector, Amazon Business, in a statement following the contract awards. “As one of the industry participants awarded a contract, we look forward to providing an efficient, cost-effective option for federal purchasing that brings savings to taxpayers while also supporting small and diverse sellers in our stores.”

Overstock.com, a large e-marketplace covering both retail as well as business-to-government and business-to-business markets, said it will offer “a wide assortment of products from established partners, and will allow government personnel to easily find, research, and order necessary COTS products, including many items from small businesses. Along with the commercial e-commerce platform, Overstock will provide concierge customer care service to aid with efficiency and ensure a top-of-the-line experience for government purchasers.”

Jonathan Johnson, CEO, Overstock.com Inc.

Jonathan Johnson, Overstock’s CEO, added: “The commercial marketplace platforms are to provide the GSA with increased oversight on government spending. We are confident our technology and industry relationships will help make GSA’s goal a reality.”

Thermo Fisher Scientific did not immediately return a request for comment. The GSA did not immediately return a request for information on why it chose the three e-marketplace providers.

Roots in Defense Authorization Act

The government’s commercial e-marketplace program stems from the 2018 National Defense Authorization Act, Section 846, which directed the federal government to “establish a program to procure commercial products through commercial ecommerce portals,” the GSA says in the Commercial Platforms Initiative section of its website.

“The GSA has heard from customers and vendors alike that we need to improve how we source, manage and ultimately sell commercial products through our e-platforms,” the agency says. Existing ecommerce procurement services operated the GSA include GSAAdvantage.gov and its eBuy platform, which among other things lets government procurement managers request quotes on “millions of products and services.”

Murphy said in Friday’s announcement that the GSA’s “approach continues to be shaped by the [Department of Homeland Security’s] Best Practices for E-Commerce Platforms and Third-Party Marketplaces, combining better security practices, better data, and better pricing.” The commercial e-marketplace program is one of four projects underpinning the GSA’s Federal Marketplace Strategy; the other three deal with contract life-cycle management, contract award schedules and a catalog management system designed to improve how suppliers’ product information is presented and shared among government agencies.

A resource during ‘uncertain times’

The GSA said the “no-cost” e-marketplace contracts will not require the government to pay fees to the e-marketplace companies for their participation in the pilot program. Amazon Business, for example, will not charge the government fees for any technologies or capabilities it provides in servicing government customers. The ecommerce company will provide government buyers the same online purchasing experience provided to general business customers, but agencies that participate in the pilot will receive complimentary Business Prime free-shipping services on eligible purchases for every user on their account, according to Amazon.

But the marketplace executives say the program provides them with an opportunity to build on their existing government business, even amid today’s pandemic-driven market disruptions.

“In addition to the many government customers already using Amazon Business, we can provide considerable value in the procurement experience to federal agencies that participate in the pilot,” Amazon’s Rung says. “And if there’s anything we’ve learned this year, it’s that Amazon Business can serve as a resource to the government during uncertain times.”

Among the ways it supports the government’s procurement policies, Amazon works with buyers at agencies to connect them with suppliers among small businesses and minority-owned, women-owned and veteran-owned companies, according to Amazon.

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