It’s been three years since the U.S. General Services Administration began a pilot program to evaluate the feasibility of developing a B2B marketplace for government purchases under $10,000.
And after three years, the federal government appears no closer to launching a full-scale B2B marketplace, according to a newly issued report from the U.S. General Accountability Office.
In a move to provide a secure, modern buying and spend-management experience for government agencies, the federal government in July 2020 took an initial step 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.
But after more than a year of looking and analyzing pilot project results, there still are problems to be resolved and more data to collect, the GAO says.
The primary issue is data security. “It is also the role of GSA to monitor the platform providers’ activities to help ensure that data protection requirements are met to effectively safeguard the data from misuse and unauthorized disclosure,” the report says. “By enhancing its monitoring plans, GSA can better ensure that cybersecurity protections are in place and that concerns about misuse of third-party data on these platforms are mitigated.”
The first pilot program, which covers purchases below the government’s “micro-purchasing threshold” of $10,000, was 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 was 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.”
But now the GAO says it needs more time to study data protection issues and address a working plan to address any fixes. “Although it is early in the implementation of the commercial platforms program, GSA can better ensure that, as the program matures, it has carefully considered how it will measure success at the end of the proof of concept,” the report says. “This includes having a comprehensive plan with goals or targets for each metric, clear time frames, and how it will assess these metrics.”
Between August 2020 and July 2021, the participating agencies in the pilot program made nearly 24,000 purchases valued at $5.9 million through the commercial platforms.
But based on the results, the GSA now wants to develop more specific tools for data measurement. “GSA recently added plans to track how much is spent on products associated with the COVID-19 response, environmentally sustainable products, businesses in underserved communities, and small businesses,” the report says. “In addition, GSA is working with platform providers to collect information on the country of origin for products purchased on the platforms—this data field is one of the most challenging to capture, as platform providers do not typically collect this information from their suppliers as part of their commercial operations.”
The GAO left any launch for a full-fledged B2B marketplace open-ended.
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