The numbers are dated. Nevertheless, the federal B2B marketplace, which the government built over several years, is slowly gaining users.
The U.S. General Services Administration (GSA) began a pilot for its Commercial Platforms Program in 2018. It set out to evaluate the feasibility of developing a federal B2B marketplace for government purchases under $10,000. Half a decade later, companies that sell through the program are benefiting.
What the GSA Commercial Platforms Program does
The federal government in July 2020 took an initial step to work with three established ecommerce organizations. They were: Amazon.com Inc.’s Amazon Business, Thermo Fisher Scientific Inc. and Overstock.com Inc. The goal was to provide a secure, modern buying and spend-management experience for government agencies. With that in mind, the GSA set out to test the use of commercial e-marketplaces for annual government procurement of up to $6 billion worth of products. Those products ranged from furniture and office products to laboratory supplies.
Now, the B2B marketplace is live and slowly but surely beginning to ramp up operations. However, it is worth noting the latest available numbers are from the government’s 2022 fiscal year.
Which companies sell through the Commercial Platforms Program
So far, Amazon Business is the big winner. To date, 27 agencies are using the B2B marketplace to secure goods and services from approved vendors. However, most of the money spent flows through three agencies: the Department of Agriculture, the Department of Veterans Affairs, and the Department of Justice, according to a new report from the Government Accounting Office.
In 2019, sales through the federal government’s program totaled $12.5 million, rising to $53 million in fiscal 2022.
Other metrics include:
- The number of estimated government purchase cardholders making purchases on the platform increased from 4,300 users in fiscal year 2021 to about 18,000 in fiscal year 2022.
- The average order size was approximately $270 per order for fiscal years 2021 and 2022 combined. “Agencies spent more on the IT Broadcasting and Telecommunications category — including computer displays, phone headsets, and computer docking stations — than any other product category in the program,” says the GAO report. “Agencies’ purchases in this category were almost three times larger than the next highest category. Agencies also purchased office supplies, furniture, and domestic appliances through the program.”
- The cost of operating the program (federal B2B marketplace) for fiscal year 2022 was about $1.5 million with expectations to spend $3 million on operating expenses over the next few years.
- The number of third-party suppliers participating on the platforms increased. It rose from almost 15,000 in fiscal year 2021 to almost 30,000 in fiscal year 2022.
- About 96% of all orders are through Amazon Business.
“The General Services Administration (GSA) established the Commercial Platforms program to enable purchase cardholders at federal agencies to buy commercially available products using online marketplaces,” says the GSA report. “From the Commercial Platforms program’s first full fiscal year in 2021 to fiscal year 2022, the total dollars spent in the program increased by about $28 million.”
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