How online marketplaces can solve for compliance and transparency issues in government procurement
Recent legislation has transformed the conversation around the power of online marketplaces to drive greater value for federal government buyers and taxpayers. What’s particularly exciting about the use of online marketplaces by public sector customers is the use of innovation to simplify time-consuming and complex processes for buyers and government suppliers, including small businesses. Let’s use this legislation to bring the simplicity of the consumer online buying experience to government customers – buyers and sellers – with the controls and compliance that government requires.
When I worked alongside procurement professionals in state and federal government procurement, I was struck by two things: 1) their commitment to doing the right thing for taxpayers – like driving the best value, awarding to small businesses, and ensuring competition; and 2) the government barriers that make it really hard for procurement professionals to do the right thing. It’s hard to achieve competitive pricing when you can’t see what other government buyers are paying for the same product. One agency may be paying twice as much for the exact same product, but because spending resides in different or outdated IT systems, there’s very little visibility into pricing and it’s impossible to know if you’re getting a good deal or a bad deal. Agency buyers want to meet their small business goals, but it’s not easy for government buyers to find these small businesses and it can take days or weeks to receive offers. It is also difficult for small businesses to register and become certified and, even if they meet that barrier, it’s harder to commit the resources and time necessary to compete and win contracts. Without new small businesses entering the government marketplace, it’s tough for government buyers to meet competition requirements.
Let’s use the technology and innovation of online marketplaces to remove government procurement barriers for government customers. Thanks to the emergence of online marketplaces, more detailed spend data such as prices paid, small business spending and delivery times, are available to government agencies via detailed analytics tools. Agencies can now see exactly which businesses they are purchasing from, how much they are spending through small businesses, and what products they purchase most frequently to identify opportunities for volume purchasing. Online marketplaces can help drive more spending to woman-, minority-, and veteran-owned small businesses through seller tools that allow them to easily onboard, identify themselves as a registered small business, and start selling to government customers. Similarly, the marketplace can use technology to guide government buyers to more easily find small business sellers, purchase from them, and track and report on their spending to them.
Online marketplaces are also powerful tools to drive compliance and controls. Tools for workflow approvals to ensure oversight of purchasing, tax exemptions to ensure a federal buyer is not paying state taxes, and a dynamic, competitive marketplace with features to track the number of offers received, ensure government buyers are meeting their competition requirements and achieving competitive pricing.
Government procurement is ultimately about maximizing each taxpayer’s dollar. This can be better accomplished by taking a customer-centric approach from the private sector and applying it to an online marketplace tailored to meet the needs of federal buyers so they can optimize their time and dollars.
Anne Rung is director of government for Amazon Business and former administrator of the Office of Federal Procurement Policy.