Amazon Will Compete In GSA E-Commerce Pilot Project

According to foreign media reports, the US General Administration issued a draft CPI on July 2nd. This is a government wide e-commerce plan that can provide opportunities for companies such as Amazon Co to operate online markets.

According to the business platform plan, suppliers will be able to compete for the establishment of an e-commerce platform, and federal contract officials can use government purchase cards to purchase daily necessities. According to the request, GSA will select multiple suppliers to participate in the 12 month pilot project. After 12 months, the government can choose to extend the contract by four terms.

Laura Stanton, Deputy Assistant Commissioner of GSA, said the plan would reduce the burden of agents and suppliers, which would be an exciting opportunity. Moreover, GSA hopes to make use of the provisions of B2B in a feasible way so as to simplify the purchase procedure and make the government expenditure seem more transparent and centralized.

According to GSA's analysis, the number of government spending through the online market has almost doubled in the past five years, from $135 million in fiscal year 201 to $260 million in fiscal 2018. However, GSA estimates that the value of open market spending through government procurement cards (CPI's total addressable market) is much greater, that is, approximately $6 billion in fiscal year 2018.

All competing candidates will be assessed on the basis of technological advantages, including their ability to comply with federal takeover regulations, which require experience in providing service to corporate customers and past performance in the federal market. Companies submitted to the proposal will be invited to conduct field test presentations.

It is understood that GSA launched the CPI in early May 2019, and released a 21 page strategic document. The strategy calls on agencies to start with the concept verification project and explore the benefits of replacing the business e-commerce model. It also recommended that Congress increase the threshold of acquisition to $25000 in order to facilitate bulk procurement within five years.

Amazon accounts for 45% of all e-commerce sales in the United States in 2018, and is likely to become a competitive competitor in the CPI pilot project. It also strongly advocates the development of the government's e-commerce plan and has participated in the pilot program of the US air force.