U.S. Government to Award Billions of Dollars in Contracts to Open Electronic Marketplaces to Government Customers—Though Serious Questions Remain

Abstract

Proposals to the U.S. General Services Administration are due soon in a $6 billion procurement under which multiple no-cost contracts will be awarded to vendors that will open electronic marketplaces to federal users making micro-purchases (generally up to $10,000). Although federal purchase card holders have long been able to make micro-purchases with few regulatory constraints regarding competition, transparency or socioeconomic requirements, this new initiative appears likely to normalize and expand those purchases—and so may revolutionize small purchases in the federal market. This article assesses some of the key concerns—from cybersecurity to bid protests to pricing—that still surround this important initiative.

Keywords: procurement, electronic marketplaces

JEL Classification: H57, K23