Amazon a Top Contender for GSA’s E-Commerce Pilot
The General Services Administration released a draft request for proposal July 2 for its Commercial Platform Initiative, or CPI, a governmentwide e-commerce program that could offer companies like Amazon.com Inc. the chance to run online marketplaces through which agencies spend as much as $6 billion a year.
Under the CPI, vendors will compete to establish e-commerce platforms that federal contracting officers can use to buy everyday items with their government purchase cards. GSA will select multiple vendors to participate in a 12-month pilot program that would inform the larger governmentwide effort, according to the solicitation. After the initial 12 months, the government has the choice to extend the contract for four option years.
“An exciting opportunity lies ahead to create not only a modernized buying experience but also reduce the burden for agency partners and suppliers alike,” said GSA deputy assistant commissioner Laura Stanton. “We are looking to leverage business-to-business terms whenever practicable, to allow for streamlined buying while obtaining a more transparent and centralized view of this type of government-wide spend.”
The amount of government spending through online-only marketplaces has almost doubled over the last five years, to $260 million in fiscal 2018 from $135 million in fiscal 2014, according to GSA’s analysis. However, GSA estimates that the value of agencies’ open-market spending through government purchase cards – the total addressable market for the CPI – is much larger—about $6 billion in fiscal 2018.
Candidates will be evaluated based on technical excellence, including their ability to comply with federal acquisition regulations requiring purchases from small and disadvantaged businesses; experience serving business-to-business customers; and past performance in the federal market. Companies that submit acceptable proposals will be invited to perform a live test demonstration.
GSA launched the CPI in early May 2019 with the release of a 21-page strategy document. The strategy called on agencies to start small with a proof-of-concept project and explore the benefits of alternative commercial e-commerce models. It also recommended that Congress raise the micropurchase threshold, to $25,000, up from $10,000, to facilitate bulk purchasing for a period of five years.
Amazon, which accounted for 45 percent of all U.S. e-commerce sales in 2018, is likely to be a top contender for a spot in the CPI pilot program. The Seattle-based e-commerce giant has strongly advocated creating a government e-commerce program, and has already participated in a pilot program with the U.S. Air Force.
The deadline for submitting comments on the draft RFP is Aug. 1.
Chris Cornillie is a federal market analyst with Bloomberg Government.
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