This week, the General Services Administration (GSA) and the Office of Management and Budget (OMB) hosted an Industry Day on Section 846 of the 2018 NDAA, “Procurement Through Commercial e-Commerce Portals.” The meeting kicked off the agencies’ implementation planning phase pursuant to that section, and it was very informative, as it provided an opportunity for a thoughtful and engaging dialogue.
By way of background, Section 846 establishes a framework for the implementation and use of e-Commerce portals across the government for the acquisition of certain commercial off-the-shelf items. Pursuant to the section, GSA is charged with establishing and managing the e-Commerce Portal program. The statute also sets forth a series of implementation phases for the program, for which, OMB is responsible:
- Phase I: Implementation Plan. The implementation plan is due not later than 90 days after date of enactment of the NDAA. Based on our calculations, the resulting due date is March 12, 2018. OMB will lay out a plan and schedule, as well as a discussion as to whether any changes or exemptions to law, regulation, or policies are needed for effective implementation.
- Phase II: Market Analysis and Consultation. Not later than one year after submission of the implementation plan, OMB is responsible for providing specific recommendations, if any, regarding any changes in law or policy necessary for effective implementation. The section requires market analysis and consultations with stakeholders across industry and government regarding the role of e-Commerce portals and their unique procurement needs. Also required, among other items, are: a review of commercial terms and conditions, potential fees charged by portals, an assessment of the products that are suitable for purchase through commercial portals, identification of information security precautions that may be necessary to protect national and cyber security, and an assessment of its impact on existing programs, including the supply schedules, small business and other preference programs.
- Phase III: Program Implementation Guidance. Not later than two years after submission of the implementation plan, OMB must issue guidance to implement and govern the use of the e-Commerce portals, including protocols for oversight and compliance.
Additional phases may follow, as determined by GSA. Section 846 also requires that GSA create a framework for supplier and product compliance information for eligibility screening via the portal providers.
Tuesday’s Industry Day marks the “beginning of the beginning” for the procurement community. GSA and OMB executed a, “modified town-hall style public meeting” approach using three panels to address (1) general program design, (2) buying practices, and (3) implementation. The panels consisted of industry stakeholders and others who made presentations and answered questions from GSA,OMB, and the audience. The agenda can be found here.
At the heart of the discussions were the fundamental questions of competition and the balance between government-unique requirements and commercial terms and conditions. With regard to competition, the meeting validated that there are various/numerous e-commerce solutions currently in the commercial marketplace. These differing models provide a wonderful opportunity for GSA to create a flexible, highly-competitive program that would provide customer agencies with greater choice when considering how to best meet their procurement needs. Competition among portal solutions is critical to innovation, best value and efficiency for customer agencies and the American people.
A great deal of time was spent discussing government unique requirements versus, “prevailing commercial terms and conditions,” and, at one point, it was questioned whether, for some portal models, terms and conditions could even be considered “commercial” given the limited number of market competitors. Getting this balance right is critical to the future success of the program. Commercial practices and terms can enhance competition, access to innovation, and best value for customer agencies. At the same time, there are operational imperatives and policy mandates pursuant to law and regulation (e.g. cybersecurity, TAA, BAA, small business, and other preference programs) that frame the federal market. A program that fails to address these government imperatives will not meet the needs of the customer or the American people. Section 846 essentially highlights a 21st century procurement policy balancing act that was first reflected in the Federal Acquisition Streamlining Act of 1994.
The Coalition was honored to participate as a panelist on Tuesday. We will be submitting written comments on Tuesday, January 16th and we look forward to continuing the dialogue with all stakeholders.
Finally, it is significant to note that FAS Commissioner Alan Thomas made it clear in his comments at the public meeting that FAS is not standing still regarding improvements to its existing programs, including the Multiple Award Schedule (MAS) program. As Commissioner Thomas noted, FAS is investing in upgrading internal and external systems, streamlining the contracting process, and adding features/capabilities to contracting programs to deliver even greater value to customer agencies. Coalition members look forward to working with FAS on these important initiatives.