Public Contract Law Journal

Commercial E-Commerce Portals: The E-Marketplace Model Trumps the Others

by Victor V. Pham

Victor V. Pham (vpham@law.gwu.edu) J.D., 2019, The George Washington University Law School; B.S., 2015, University of Maryland - Baltimore County. Mr. Pham would like to thank his Adjunct Professor, Jayna Rust, for her guidance throughout the note writing process. Mr. Pham would also like to thank his parents, Paul A. Pham and Nina S. Song, for their love and support.

I.  Introduction — Streamlining the Procurement of Commercial Items  

In Fiscal Year (FY) 2016, the federal government spent approximately $53 billion on goods using commercial acquisition procedures,1 despite years of scrutiny for outrageous spending on commercial items.2 For example, as early as the 1960s, the Pentagon spent $640 per toilet seat on military airplanes.3 Due to the government’s inability to receive reasonable prices, it launched purchasing programs such as Government Purchase Cards in 19864 and Federal Supply Schedules in the mid-1990s.5 These programs were implemented to simplify and reduce the costs of the government’s acquisition process.6 However, per studies conducted by the Government Accountability Office (GAO), there were still cost savings to be made.7

In recent years, the government has tried to use technological advancements like GSA Advantage to shift the procurement process to online platforms.8 In 2010, U.S. citizens spent $170 billion on online shopping,9 and in 2015, that number nearly doubled to $343 billion.10 Now, the federal government is advancing online procurements through “Commercial E-Commerce Portals.”11 

The National Defense Authorization Act (NDAA) for FY 2018 included a provision titled “Sec. 846. Procurement Through Commercial E-Commerce Portals,” hereinafter “Section 846.”12 Section 846 created a program permitting the federal government to procure commercial off-the-shelf items (COTS) through eligible online providers13 such as Amazon, Staples, and Wal-Mart.14 It described a three-phase process for the General Services Administration (GSA) to carry out the program,15 and Phase I of that process proposed three potential portal provider models: (1) E-Commerce Model, (2) E-Procurement Model, and (3) E-Marketplace Model.16 Each model described a different relationship between the online portal provider, third-party vendors, and government buyers.17

Like many newly enacted pieces of legislation, certain policy considerations ought to be addressed when selecting an appropriate model for government procurement.18 This Note will critically evaluate all three models by analyzing each model’s impact on efficiency, transparency, and competition. It will also determine which model is most beneficial for government buyers, and review the government’s former and current procurement streamlining practices to explain how the E-Marketplace Model best improves each policy consideration.

Part II will address the legislative policy objectives. Part III will then discuss the history of Section 846. Part IV will explain the framework of each proposed portal provider model. Part V will discuss the problems with the government’s previous and current streamlining efforts, and finally, Part VI will argue that the E-Marketplace Model, which strongly resembles Amazon Business’s platform, is the best streamlining system for government buyers.

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