President signs online marketplaces bill—now what?

 By Jeff Ellinport, division counsel, and Steve Charles, co-founder

The FY18 National Defense Authorization Act (NDAA), signed by President Trump earlier this

month, not only authorizes appropriations for the Department of Defense and military services, but it also includes a provision that will change the way the private sector sells many commercial products to the federal government. It could have a dramatic effect on future supplier go-to-market plans.

As the General Services Administration develops its plan to implement this legislation, the time is now for OEMs to speak up about how they want to see this part of their public sector channel evolve. The next opportunity will be Jan. 9 at GSA’s first public meeting on this issue. But first, a little bit on the impact of this change.

What is Section 846?

Referred to early on as the “Amazon amendment,” the final language in Section 846 of the NDAA authorizes a new program to establish commercial online ordering services as a new link in the federal supply chain for commercial-off-the-shelf (COTS) items.

The contemplated GSA program will proceed with a phased approach to ultimately award multiple contracts to multiple commercial e-commerce portals in the next two or so years. The first year will focus on market research and modifying conflicting procurement law and regulations to accommodate this new buying method.

Unanswered questions

immixGroup has been working with government leaders to make sure IT manufacturers and their authorized solution providers have a seat at the table. But we still have many questions:

1) What is the definition of “supplier”–a term used in the new law?

2) How will brand ownership of its commercial channel programs extend to this new link in the government supply chain?

3) Will the statutory exclusion of “services” extend to online services or does the use of that word in the statute only refer to labor?

4) As government-unique requirements for the e-commerce portals get debated, where will the line be drawn so that the e-commerce portals remain legally commercial and not become government-unique?

5) Will GSA planners consider both supply-side and demand-side best practices as plans are made for the use of commercial e-commerce portals in the supply chain across the federal enterprise?

6) Will an e-commerce portal be able to sell its own products?

How you can help

We invite brand owners, their global channel architects and authorized partners to participate with us in conversations with government stakeholders as the implementation details are debated and decided in the coming year.  At each meeting we attend, we’d love to have a brand owner and at least one brand-authorized partner at the table with us.

The first 90-day phase requires the GSA administrator to develop an implementation plan. The clock on this phase began the day the 2018 NDAA was signed by President Trump, December 12, 2017.

immixGroup will meet with the planners to present the commercial distribution practices of commercial item suppliers within the context of sales via commercial e-commerce portals. We invite you to join us at GSA’s first public meeting on the e-commerce portals.

To date, the guiding commercial practice principles we are grounded in start with brand (i.e., OEM) authorization.  To that end, we are seeking brand leaders, their commercial channel architects and their authorized channel partners to participate in the planning conversations with us.

We are collaborating with several trade associations and will increasingly articulate our positions and views from the brand-authorized channel perspective.

If you’re interested in preparing for and participating in these conversations, please reach out to Steve Charles or Jeff Ellinport to add your name and organization to our list, along with any thoughts or questions you may have throughout this process.

For more guidance on selling technology to the government, subscribe to the Government Sales Insider blog.