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The Federal Government Procurement Process Could Go Digital

September 25, 2017 By Jeffrey Belkin

In order to keep up with online marketplaces available at the “one touch” of a smartphone, the federal government is doing its part to bring its procurement process into the digital age. Legislation passed earlier this year by the House of Representatives would allow the U.S. military and civilian government agencies to buy products directly from new online marketplaces instead of following the current procurement process for purchases above the “micro-purchase” threshold (i.e., a few thousand dollars). The newly proposed process would present many opportunities for online retailers and marketplaces and is seen by supporters as a way to drive down prices for the government. However, such a transition would create many compliance and regulatory issues likely introducing new costs; and opponents, such as Steve Ellis, the vice president of advocacy group Taxpayers for Common Sense, argue that it will foster a less competitive environment and create waste.

Although lawmakers are aiming to streamline the procurement process and increase competition, it will be difficult to harmonize the open marketplaces with competition and documentation requirements currently mandated by the law. The devil, of course, will be in the details. Should this bill become law, there will be many new and important considerations companies will need to keep in mind before pursuing future contracts. Because there are so many existing competition requirements in the Federal Acquisition Regulation (FAR), and so many other regulatory strings attached by law to purchases over a certain threshold, it will be hard to reduce burdens without reducing compliance. Accordingly, this bill will likely create major traps for unwary sellers who won’t realize that the buyers have the force of the DOJ behind them if the seller (or the government contractor operating the online marketplace) does not turn square corners.

Filed Under: Advice to Contractors & Grant Recipients, Information Technology, IP and Research in the Government World Tagged With: Federal Acquisition Regulations (FAR), Legislation, Procurement, U.S. Department of Justice (DOJ)

About Jeffrey Belkin

Jeff Belkin is a partner in and co-leader of the firm’s Construction & Government Contracts Group. Jeff represents contractors in False Claims Act and internal investigations, claims litigation and procurement protests, and advises on complex compliance issues.

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This blog is a service of Alston & Bird’s Government Contracts team and provides insights on cases, rules, trends, and latest developments in local, state, and federal government contracting. Our attorney observations include analysis of investigations, litigation, protests and issues affecting present or prospective prime contractors, subcontractors, and grant recipients across various industries.

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