Each year, federal agencies spend billions of dollars collectively making purchases using their federal government purchase cards or other micro-purchase methods, which receive little notice on a governmentwide scale when compared with higher-value contracts.
The General Services Administration is currently looking for a way to change that, by offering an e-marketplace platform that not only allows agencies to more easily search for and make those smaller-cost purchases, but also gives GSA and user agencies better data about how their spending stacks up.
At the beginning of October, GSA released its request for proposals for a proof-of-concept of the program, which will kick off a three-year maximum test to see whether a government-organized e-marketplace is more valuable than agencies simply making these purchases on their own, as they do now.
“This is really designed to target the open market spend that agencies are doing,” said Laura Stanton, GSA’s deputy assistant commissioner for category management, in an Oct. 18 interview with Federal Times.
“What we’re doing with the proof-of-concept isn’t intended to change buying from the Multiple Award Schedule or the Global Supply Program or the other things agencies use for above micro-purchase. But this is intended to target that $6 billion that agencies are spending under the micro-purchase [threshold] on these items. And if we can do that really efficiently, then that does free up people’s time and gives us the access to that data in a way that we just don’t have today.”
Micro-purchases in the federal government are defined as those that are $10,000 or less. And though calling such spending levels “micro” may seem like a misnomer to outside observers, these purchases by themselves represent a tiny amount when compared with government contracts that can reach into the millions and even billions of dollars.
Collectively, however, these smaller purchases represent a sizable spend within the federal government.
According to Stanton, the intention with the proof-of-concept is to bring in multiple e-commerce platforms, which offer a wide array of products in one location, so that both agencies and sellers have a variety of options to choose from and competition between the platforms is maintained.
“It means that the marketplace has both first- and third-party sellers on it. So the marketplace can sell its own items and it will also allow for third-party sellers,” said Stanton, adding that around six to eight agencies have already expressed interest in participating in the proof-of concept.
“This is not a mandatory program, so we’re really looking at the agencies raising their hand and saying this matches their buying pattern, they’re interested in bringing their spend under management for micro-purchases and that they’re interested in coming in and working closely with GSA on change management.”
Though GSA plans to develop more concrete metrics when it submits plans to Congress in early 2020, it has developed three objectives based on conversations with agency acquisition shops: modernize the commercial buying experience, simplify and streamline the buying of commercial items, and allow for analysis of online spend.
The proof-of-concept therefore will have to answer a number of questions: do agencies want to adopt the new model? Do acquisition specialists have work time freed up to spend on other projects? Are agencies saving money? Does a collective model give agencies the data they need to make better purchasing decisions? Are small businesses better able to get access to government markets? Does a centralized program make it easier for agencies to follow acquisition rules?
“A lot of those business set asides don’t apply under the micro-purchase threshold. That said, we want to give those businesses that have those certifications every opportunity to get recognition that they have those certifications and for the agencies to have buying credit wherever possible,” said Stanton.
“Many small businesses already sell through these platforms, and this allows them to reach the government markets the same way that they reach commercial without extra investment.”
The proof-of-concept RFP closes Nov. 1, and Stanton said that GSA plans to issue an award sometime at the end of the first quarter of fiscal year 2020 and begin roll out of the program in early calendar year 2020.
“It’s really fun to see the government on the cutting edge of adopting a new technology and a new purchasing approach,” said Stanton.
“This gives GSA a chance to test this on a small scale. This is not the final contract or necessarily our contract structure.”