Aug 10, 2017

NDAA Provision Requires Federal Procurement Through ‘Online Marketplaces’

A provision contained in the National Defense Authorization Act for Fiscal Year 2018 (NDAA), H.R. 2810, covers “Procurement Through Online Marketplaces.”  Section 801 of Act requires the Administrator of the General Services Administration (GSA) to establish for government-wide use a program to procure products through online marketplaces for the purposes of expediting procurements while ensuring reasonable pricing of commercial products.

The GSA Administrator is required to carry out this program by the issuance of more than one contract with more than one online marketplace provider.

Although the program will be available government-wide, the Act specifically directs the Secretary of Defense to (shall) use the online Marketplaces, as appropriate, in the purchase of commercial products.

The Act also provides criteria for use in establishing Federal online marketplaces under the program:

  • is used widely in the private sector, including in business-to-business e-commerce;
  • provides dynamic selection, in which suppliers and products may be frequently updated, and dynamic pricing, in which product prices may be frequently updated;
  • enables offers from multiple suppliers on the same or similar products to be sorted or fileted based on product and shipping price, delivery date, and reviews of suppliers or products;
  • does not feature or prioritize a product of a supplier based on any compensation or fee paid to the online marketplace by the supplier that is exclusively for such featuring or prioritization on the online marketplace;
  • provides the capability for procurement oversight controls, including spending limits, order approval, and order tracking;
  • provides consolidated invoicing, payment, and customer service functions for all transactions;
  • satisfies requirements for supplier and product screening requirements of the Act; and
  • collects information necessary to fulfil the order information requirements of the Act

The Act includes requirements for supplier and product screening.

Products procured through the Federal online marketplace will be deemed to have satisfied competitive procurement requirements if there are offers from two or more suppliers of such a product or similar product with substantially the same physical, functional, or performance characteristics on the online marketplace.  Procurements consummated using the online marketplace will be deemed an award of a prime contract for purposes of goals under the Small Business Act.  Nothing in the Act shall be construed as limiting the authority of a department or agency to restrict competition to small business concerns.

NDAA passed the U.S. House of Representatives on July 14, 2017.  The U.S. Senate agreed to a motion to proceed with action on July 25, 2017.

 

About the Author:

Wayne Simpson | Centre Law & Consulting Wayne Simpson
Consultant

Wayne Simpson is a seasoned former Federal executive and acquisition professional who is also a highly-motivated and demonstrative small business advocate, with nearly 38 years of Federal Civilian Service with the U.S. Department of Veterans Affairs (VA), and its predecessor organization, the Veterans Administration.
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