FY 2018 NDAA Includes Many Reforms to DoD Acquisition; Will Allow Online Marketplace Purchases

This year’s annual National Defense Authorization bill  (NDAA) contains many reforms to DoD’s purchasing system, including what is being hailed as the biggest change to acquisition in decades. The bill will allow DoD to purchase off-the-shelf products through online marketplaces like Amazon and Staples.

Currently the Defense Department has two options for purchasing: they can go through either the DoD contracting process, or the General Services Administration (GSA) schedule where prices are set.

Committee Chairman Mac Thornberry proposed that the Pentagon should be able to purchase commercial-off-the-shelf goods, ranging from bottled water to treadmills or even MRI machines outside the GSA, where prices are 13 percent higher than the open market, according to a recent GSA Inspector General report.

“A solution is obvious to most consumers – allow the government to use online commercial sites like Amazon, Staples, or Grainger just as businesses do,” a summary provided by the Chairman states. “These portals function like mini-marketplaces, ensuring that the buyer gets the best price without a lot of red tape. Using these portals has the added benefit of allowing DOD to track and analyze procurement data. Any business will tell you that this ‘spend analysis’ is critical to efficient operations. For the government, that kind of transparency and accountability would be revolutionary.”

Proponents of the reform argue that the portal will allow the Defense Department to act like a commercial buyer and take advantage of the lower prices available to them, as well as move the government away from specialty products and conditions when purchasing off-the-shelf goods.

Industry experts had mixed reactions to Thornberry’s reform. There are concerns about how it squares with the Competition in Contract Act, the Buy American Act, the Trade Agreements Act, as well as whether current Federal protections for small businesses would remain in place.

Nevertheless, Trey Hodgkins, a senior vice president at the IT Alliance for Public Sector, called the measure intriguing, reported Federal News Radio.

“We like the direction it’s taking, but we still have questions about how to make sure this is something that’s feasible and that people can effectively comply with it,” he said. “They do not list the bulk of the [Federal Acquisition Regulations], many of which are statutorily based. So what happens with all of those requirements when people are buying through this portal? Those are the things we’re still working the committee on for answers.”

Reforms that were also included in this year’s NDAA include a requirement that DoD submit detailed spending plans and budget for service contracts in the upcoming fiscal year to Congress, in the same way that is currently required for weapons systems.

The bill also reforms how DoD uses services requirement review boards (SRRBs), and discourages DoD from using bridge contracts. The bill includes provisions to enable DoD to better plan for and reduce long-term costs of its weapons systems.

Congress is looking to encourage long-term sustainment strategies that will lead to cost-savings, a senior congressional aide told Federal News Radio.

The bill, which passed out of committee Wednesday night, will be subject to a vote on the House floor.