A student at the University of Alabama at Birmingham's Hill Student Center walks by a large Amazon Dash button, Monday, Oct. 16, 2017, in Birmingham, Ala.

A student at the University of Alabama at Birmingham's Hill Student Center walks by a large Amazon Dash button, Monday, Oct. 16, 2017, in Birmingham, Ala. Brynn Anderson/AP

Congress May Be Making the Pentagon Amazon's Next Big Customer

Though lawmakers revised the so-called "Amazon amendment," only a small number of companies could provide the government with an e-commerce site.

Buried within the 2,000-page National Defense Authorization Act is an amendment that could offload a significant chunk of the $53 billion the Defense Department spends annually on commercial products to an e-commerce platform.

Dubbed the “Amazon amendment," the Defense Acquisition Streamlining and Transparency Act made it through conference negotiations that merged the Senate and House versions of the $700 billion NDAA last week. Lawmakers made changes that eased some—but not all—industry concerns that the House version of the bill stacked the growing defense spending deck in favor of the Seattle-based retail giant.

Instead of immediately offering a no-bid contract that could be worth billions to a single commercial e-commerce provider as called for by the bill’s House version, the modified amendment calls for a phased approach in which the federal government issues multiple contracts to multiple e-commerce portal providers in the coming years. The portals could be used to buy everything from pens and pencils to potentially more complex items, like mobile devices or other technologies.

“I think this approach gives the government opportunities to look at multiple stakeholders in the game, an opportunity to look at e-commerce portals across the board and various types of solutions—not just one,” Roger Waldron, President of the Coalition for Government Procurement, told Nextgov.

» Get the best international military business news each week in the Global Business Brief from Marcus Weisgerber. Sign up here.

Over the summer, the Coalition for Government Procurement joined other industry groups in lobbying House Armed Services Committee Chairman Mac Thornberry, R-Texas for changes to the amendment, estimating a single e-commerce portal for the Defense Department could generate more than $5 billion in annual revenue for the provider with little vetting of products or oversight of delivery.

The modified NDAA, which both the full Senate and House still need to vote on, also calls for the General Services Administration to develop an implementation plan within 90 days of the measure becoming law. The legislation also tasks GSA and the Office of Management and Budget to research and specify what products and services should be available through the e-commerce platform, as well as tweaks to existing law necessary to ensure its effective implementation.

The conferenced version of the amendment also prohibits any e-commerce platform provider from selling to any third party “any information pertaining to a product ordered by the federal government.” This kind of data is increasingly valuable to companies looking for a competitive edge, particularly within a market as large as the Defense Department’s.

“I think this is a more positive, thoughtful approach to addressing the need for an online marketplace,” Waldron said. “There are so many pieces and I think to the credit of Congress, they recognized how many different pieces of the procurement puzzle this would impact.”

It may take years to realize the legislation’s true impact.

Even after Congress’ proposed changes to the Amazon amendment, the legislation is still geared toward a small cadre of large commercial suppliers that include Amazon, Walmart and Grainger, though large IT resellers like ImmixGroup and Carahsoft are rumored to have an interest in competing.

Mike Hettinger, managing principal at Hettinger Strategy Group and a former Hill staffer, said the government’s determination of what commercial products and services are sold in the e-commerce platform—and how those products and services are vetted—are key questions industry will be paying attention to the most.

“In order for any new platform to be stood up, they’d have to figure out the quality assurance piece and how you go about qualifying to sell a good or service on the platform,” Hettinger said.

The decision to move the Defense Department in the direction consumers have moved toward for years is likely to cause significant fallout.

For example, will technology products be sold in these online portals, and if so, what products will the government deem too complex to be sold in them? These decisions, Hettinger said, could have a major impact on other platforms the government currently uses to buy goods and services, such as the GSA Schedule or reverse auctions.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.