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E-commerce and the Federal Government: How to Make It Work?

The Coalition for Government Procurement (the Coalition) has long supported efforts to streamline Federal procurement processes, modernize procurement policies, and utilize commercial practices to the maximum extent practicable.  Common sense procurement policies and programs that effectively and efficiently leverage the commercial marketplace are the key to delivering best value commercial products, services, and solutions to meet customer agency mission requirements for the American people.

The rapid growth of e-commerce solutions in the commercial sector provides an opportunity to streamline the Federal procurement process for commercial items and advance the adoption of commercial best practices.  By doing so, the government can capitalize on the lessons learned from industry, and thus, inform and improve Federal e-commerce solutions.

As the Federal procurement community seeks to leverage these commercial e-commerce solutions, however, the nexus between procurement policies and programs becomes a key consideration in crafting the way forward.   There are procurement policies that underlie the business rules governing the operation and management of Federal acquisition programs, including Federal e-commerce programs.  Thus, these policies must be accommodated.

For example, current Federal e-commerce systems, (e.g., GSA Advantage, eBuy, and FedMall) are designed to operate in accordance with the Federal Acquisition Regulation (FAR), the Defense Federal Acquisition Regulation Supplement (DFARS), and the General Services Acquisition Regulation (GSAR).   These regulations implement a host of statutory and acquisition management requirements, including those related to foreign acquisition (e.g., TAA, BAA, and Berry Amendment), cybersecurity, audit rights, green procurement, and ethics programs.  Clearly, the devil is in the procurement details.  Understanding the foregoing, a number of key issues arise, including:

  • Facilitating competition in the market for commercial e-commerce solutions.
  • Whether and which long-standing acquisition policy requirements should apply to e-commerce transactions.
  • Whether the clauses and provisions applicable to commercial item acquisitions need to be examined or revised.
  • Ownership, provision, and use of transactional data.
    • Included here is the transactional data associated with the e-commerce provider’s services and fees throughout the stream of transactions, as well as a determination of what fees may be assessed on the product suppliers by an e-commerce solution provider.
  • An understanding of the nature of dynamic pricing and under what circumstances it addresses the government’s mission-driven needs.
    • Here, the government should understand when it is appropriate for direct competition for specific requirements.
  • Cybersecurity, gray market, and counterfeit issues surrounding these solutions and how they should be addressed.
  • Critically important, the impact of e-commerce solutions on small businesses.

E-commerce solutions hold great promise for efficiency and access to innovation, and it is human nature to desire the government to leverage those solutions as quickly as possible for the public good.  The procurement system, however, is not a simple process that is susceptible to “quick fixes.”  Rather, it is an intricate, dynamic system that links to other systems to facilitate many government goals.  As long as those goals exist, then it is incumbent on policymakers to understand how these solutions will work, not only at the transaction level, but also at the policy level to facilitate them.

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