As a consumer today, technology has us conditioned that we should receive instant service. You can buy nearly any product through retail portals on the internet. The ability to order something in one click and have it delivered within days has become so commonplace that we expect nothing less.
However, for the federal government, buying a product can take weeks, if not months, and requires numerous approvals due to complex procurement rules. Thanks to the passage of FY2018 National Defense Authorization Act (NDAA), this is about to change. The General Services Administration and the Office of Management and Budget are working toward the establishment of a government e-commerce portal to simplify the ability of federal agencies to buy commercial products. Federal government procurement is at an inflection point and the portal mandate comes at a time when innovation is disrupting the federal status-quo across agencies.
The government should strive to create purchasing practices as close to those in the commercial sector as possible while ensuring that all business is treated fairly, competition is maximized and existing status and treaty obligations are respected. Successful implementation will help allow the federal government to obtain products at the most optimized price, provide additional visibility into the product types offered by a wide range of vendors, increase the supplier diversity in the government and provide industry increased visibility into purchasing behaviors. This will allow the federal workforce to shift from low-value administrative work to higher value mission-centric work.
IT procurement remains a major challenge and GSA needs to tackle the problem before it grows. While the initial phase of GSA’s implementation plan is not currently focused on technology products or services, this is the market area where the federal government will be able to realize the biggest return on the investment of the e-commerce portal. By offering technology for purchase through the portal, the market will be forced to innovate how they go to market with their products and services.
For example, if the government wants to buy a bicycle, the procurement officer goes onto the portal and phase one, they have the individual components such as the bicycle frame, the gearshifts, chains and tires all for sale. If industry begins to see the demand for a configurable version of the bike, then the marketplace will start to commoditize bundled solutions across multiple suppliers, driving competition around those bundled solutions.
The federal government, too, will start to see unique technology requirements and more bundled, packaged solutions.
GSA should consider the following recommendations including:
· Mitigate gray-market purchases. An acquisition from an unauthorized “gray market” entity would impose significant risk, particularly to government end-users. If the intent is truly an open marketplace, internal controls need to ensure that federal purchasers have enough information to distinguish between gray market and authorized products.
· Allow only certified vendors/suppliers. The portal should recognize and promote only those suppliers who are certified by the manufacturer. Manufacturers should have full transparency into who is selling their products on such portals so that they can ensure that the government is aware of suppliers who are engaging in questionable business practices and jeopardizing the security of their products and customers.
· Incorporate industry-led open standards. In a similar vein, GSA should ensure that the portals promote the development and adoption of industry-led open standards. The current, antiquated acquisition system too often permits government buyers to maintain legacy networks that operate on outdated proprietary standards. Limiting portal products to those that are configured on open standards will help ensure that products purchased are interoperable and innovative.
· Mitigate channel conflict. While the FY 2019 NDAA updated the portal statute to say that competition is satisfied if there are offers from two or more suppliers of a product, GSA needs to ensure that the suppliers listed on the portal selling a similar product are two different manufacturers, and not two resellers of the same manufacturer. Simply stated, considering offers from two resellers of the same underlying product is not competition; true competition requires consideration of products from different manufacturers.
Julianne Zuber is senior director, federal partners/channels lead, Juniper Networks.
