Congress Passes Online Marketplace Legislation

By Robin Gray, ECIA COO

December 6, 2017

Congress passed and sent to the President the National Defense Appropriation Act (NDAA) of 2018 (H.R. 2810).  As previously reported by ECIA, the legislation contains provisions (Section 846) relating to government procurement of COTS items through commercial e-commerce portals.  Several changes were made in the original language.  The key changes are:

  • Requiring a phased-in implementation plan with specific timetables and factors to be considered.
  • Eliminated the selection criteria and replaced it with the following general portal selection language: 1) are widely used in the private sector; 2) have or can be configured to have the features that facilitate the execution of program objectives, including features related to supplier and product selection that are frequently updated; 3) an assortment of product and supplier reviews; 4) invoicing payment; and 5) customer service.
  • Buying through a designated portal shall, “to the maximum extent practicable,” be under the standard terms and conditions of the portal
  • Eliminated the language about distinguishing between authorized and unauthorized products. However, there is language that requires consideration of unique procurement needs associated with supply chain risks.
  • Eliminated the language regarding a prohibition on prioritizing or featuring a product based on compensation paid to the portal by the seller.
  • Deleted the term “online marketplace provider” and replaced it with “commercial e-commerce portal.” A “commercial e-commerce portal” is defined as “a commercial solution providing for the purchase of commercial products aggregated, distributed, sold, or manufactured via an online portal.  The term does not include an online portal managed by the Government for, or predominantly for use by, Government agencies.”

The legislation does keep the requirement that the portal cannot sell or otherwise make available to any third party any information pertaining to the government’s purchase.

The emphasis in the revised language appears to be on the development of an implementation plan, leaving much of the details to be worked out by the OMB Director, the GSA Administrator and the heads of relevant departments and agencies.

President Trump is expected to sign the bill.  The bill stipulates that an Implementation Plan and schedule shall be completed not later than 90 days after enactment.  The Phase II Market Analysis and Consultation shall be completed not later than one year after the submission of the Phase I Implementation Plan.  The Phase III Implementation Guidance shall be completed no later than two years after the submission of the Phase I Implementation Plan.