{"id":9716,"date":"2017-11-06T17:21:48","date_gmt":"2017-11-06T17:21:48","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2017\/11\/06\/how-amazon-stands-to-almost-gain-a-monopoly-for-federal-procurement\/"},"modified":"2026-08-08T04:31:15","modified_gmt":"2026-08-08T04:31:15","slug":"how-amazon-stands-to-almost-gain-a-monopoly-for-federal-procurement","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/acquisition\/2017\/11\/06\/how-amazon-stands-to-almost-gain-a-monopoly-for-federal-procurement\/","title":{"rendered":"How Amazon could become near monopoly for federal procurement"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2015 Amazon stands to become a dominate player, if not <i>the <\/i>dominant player, in the federal procurement marketplace based on the recent National Defense Authorization Act.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Intercept <a href=\"https:\/\/theintercept.com\/2017\/11\/02\/amazon-amendment-online-marketplaces\/\">reports<\/a> that this factor is a result of <a href=\"http:\/\/docs.house.gov\/meetings\/AS\/AS00\/20170628\/106123\/BILLS-115HR2810ih.pdf\">Section 801 <\/a>of the House-passed NDAA, which moves Department of Defense purchases from off-the-shelf \u2015 or products readily available to the general public \u2015 to online marketplaces. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this context, \u201conline marketplaces\u201d are defined as outlets that can offer a diversity of product options. What gives Amazon \u2015 specifically its commercial sales platform Amazon Business \u2015 the edge is the General Service Administration\u2018s policy of such outlets being required to offer multiple suppliers for the same products, with perpetually changing selections and prices.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/theintercept.com\/2017\/11\/02\/amazon-amendment-online-marketplaces\/\">According to<\/a><a> t<\/a>he Intercept, as a result of the GSA policy in conjunction with Section 801, \u201cexperts believe only one or two companies would have the wherewithal to participate,\u201d Amazon being one of them. The company stands to gain more than its competitors due to its prior contracts with federal agencies and the 90,000 local government coalition U.S. communities.<br><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, Section 801 eliminates the need for the government to look for competitive bids, meaning that agencies could stick primarily with Amazon for an indefinite period of time. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The current policy for federal procurement involves government agencies signing long-term contracts with suppliers or utilizing GSA schedules, which catalog set prices for procurement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Section 801 came about as a result of the House Armed Services committee<a href=\"https:\/\/armedservices.house.gov\/sites\/republicans.armedservices.house.gov\/files\/wysiwyg_uploaded\/FY18%20NDAA%20Floor%20Summary%20Draft%20vFinal.pdf\"> believing<\/a> that the current policy was too costly and cumbersome and that GSA schedules <a href=\"https:\/\/www.gsaig.gov\/sites\/default\/files\/audit-reports\/A070049_1.pdf\">housed<\/a> higher-costing IT products than the open market. The idea behind the NDAA\u2018s \u201conline marketplace\u201d provision was to allow the federal government to interact with online commercial sites in the same manner as private businesses. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However despite Amazon being a large hub for third-party sellers, the company can impose costs and guidelines that can stifle third parties\u2019 ability to compete. For example, Amazon can extract up to 20 percent of third-party profits and can drive buyers to preferred products via the adjustment of search results. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a result, the Intercept <a href=\"https:\/\/theintercept.com\/2017\/11\/02\/amazon-amendment-online-marketplaces\/\">states that <\/a>\u201cif Pentagon procurement and potentially all federal procurement, shifts predominantly to Amazon, it would collect billions of dollars annually without doing much of anything.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, Amazon could take advantage of federal spending decision data ala the bill\u2019s demand for dynamic pricing. For example, should Amazon know that procurement officials buy specific products during a certain time period, the company could beef their prices up for that period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Senate version of the NDAA currently does not have an online marketplace provision, thus a compromise will have to be made as to the ultimate fate of Section 801. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Amazon stands to become a dominate player, if not the dominant player, in the federal procurement marketplace based on the recent National Defense Authorization Act.<\/p>\n","protected":false},"author":7,"featured_media":27387,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":6,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[104,106,31,33,6],"tags":[],"coauthors":[1121],"class_list":["post-9716","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-acquisition-update","category-daily-brief","category-home","category-newsletters","category-acquisition"],"acf":{"subheadline":"","legacy_arc_id":"2PHHBZPEYVANBEXVA37APFMXII","arc_canonical_url":"\/acquisition\/2017\/11\/06\/how-amazon-stands-to-almost-gain-a-monopoly-for-federal-procurement\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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