Delivering for Best-in-Class Wholesaler-Distributors
October 19, 2018

The Fiscal Year 2018 National Defense Authorization (NDAA) bill was enacted on December 12, 2017 (PL 115-91). The provisions included in Sec. 846 (“Procurement Through Commercial E-Commerce Portals”) restructured the process by which Federal agencies acquire more than $50 billion in commercial off the shelf (COTS) products annually.  The General Services Administration (GSA) is directed to establish a program for their procurement through commercial online e-commerce portals.  GSA is to “carry out the program … through multiple contracts with multiple e-commerce portal providers …” Implementation of the program is to occur in three phases over a period of two years and three months, with Phase I occupying the first 90 day period.

On March 15, 2018, the GSA Phase I implementation report included legislative language proposing statutory changes to the provisions of Sec. 846. The members of the NAW COTS Online Procurement Working Group, initially organized in the spring of 2017 to address this issue, evaluated the GSA Phase I report and the legislative language accompanying it.  An effort to enact the GSA-proposed legislative changes was expected to be undertaken in conjunction with Congressional consideration of the FY 2019 NDAA.

In the House-passed FY’19 NDAA, Sec. 834 increased the micro-purchase threshold for procurements through a commercial e-commerce portal to $25,000. It also provided the Administrator of the GSA with new discretionary authority with respect to the satisfaction of current law competitive requirements.

In the Senate, an effort led by Democratic Whip, Sen. Richard Durbin (D-IL) introduced an amendment to the FY’19 NDAA on behalf of his home-state colleague, Sen. Tammy Duckworth (D-IL). In addition to Sec. 834 in the House version, his amendment would have authorized the GSA to integrate its Multiple Awards Schedule (indefinite delivery, indefinite quantity (IDIQ) long term agreements) into Section 846’s e-commerce model.

In response, NAW sent a letter to the Members of the Senate expressing opposition to the Durbin amendment stating that the amendment removes policy and procurement integrity responsibilities representing significant private sector investment. In the end, the Durbin amendment was not included in the Senate passed FY’19 NDAA.

Click Here to view NAW’s letter to the Senate.

A Conference Committee to resolve the differences between the House and Senate bill concluded its work on the Conference Report in late July. The NAW working group was successful in preventing the FY’19 NDAA Conference Report from including the GSA-supported provision to increase the micro-purchase threshold (MPT) from $10,000 to $25,000 for portal transactions only.  Shortly after, the Conference Report overwhelmingly passed the House and Senate and is expected to be signed into law by the end of August.

With enactment of the FY’19 NDAA complete, the June 15th GSA RFI concluded and GSA (together with the Office of Management and Budget (OMB)) approximately half-way through the three-phase implementation process, the NAW working group will remain “in business” throughout the next steps of the legislative and implementation process.