Legislation on Online Buying of COTS Items Advances in Congress

By Robin Gray, ECIA COO

July 20, 2017

The House passed on July 14 the National Defense Authorization Act of 2018 (NDAA), H.R. 2811, which contains language requiring the Administrator of the General Services Administration (GSA) to “establish a program to procure commercial products through online marketplaces for purposes of expediting procurement and ensuring reasonable pricing of commercial products.”  H.R.2811 further directs the Secretary of Defense to use the marketplaces selected by the Administrator to purchase, as appropriate, commercial products.  The House summary of the section of NDAA 2018 notes that online marketplaces:  “…allow the government to use online commercial sites like Amazon, Staples, or Grainger just as businesses do.”

The legislation directs the GSA Administrator to contract with one or more commercial online marketplaces providers for Federal government-wide use in the purchase of commercial-off-the-shelf (COTS) products.

This House defense authorization bill defines “online marketplace provider” as “a commercial, non-Government entity providing an online portal for the purchase of commercial products aggregated, distributed, sold or manufactured by such entity.”

H.R. 2811 sets forth the following criteria that the GSA Administrator shall use in selecting online marketplace providers.  The marketplaces shall:

  • be widely used in the private sector, including B2B e-commerce
  • provide dynamic selection and pricing
  • provide offers from multiple suppliers on the same or similar products that can be filtered by price, delivery date and reviews
  • not prioritize or feature a product based on compensation paid to the marketplace by the seller
  • provide procurement oversight controls, including spending limits, order approval and order tracking
  • provide consolidated invoicing, payment and customer service on behalf of all sellers
  • meet requirements for supplier and product screening

With regard the latter, i.e., meeting the requirements for supplier and product screening, it is important to note that the proposed legislation specifically stipulates that marketplace provide “the ability to search suppliers and products and identify such suppliers and products as authorized or not authorized (emphasis added)…”

Another noteworthy provision is that the marketplaces selected “agree not to sell or otherwise make available to any third party any of the information…” regarding the DoD purchase.

It appears that electronic component distributors and part aggregator sites may meet the criteria for becoming an online marketplace provider.

This legislation was originally part of H.R. 2511 before being incorporated into H.R. 2810.  The legislation now moves to the Senate for consideration.  ECIA will continue to monitor the progress of this legislation through Congress and keep ECIA members informed of its status.