Online federal store attracts mostly browsers, not buyers

Federal purchasers are using a giant online government store to shop around for office supplies and equipment, but are not buying complex technology or services through the site, according to a new report from the General Accounting Office.

Launched in October 1995 and administered by the General Services Administration, GSA Advantage allows federal buyers to search for products and services online, rather than calling vendors, waiting for quotes on prices and then placing orders. GSA has invested about $84 million in the virtual supermarket so far.

Over a seven-month period in fiscal 2002, agency procurement employees visited GSA Advantage most often to compare prices from vendors offering binders, pens, paper shredders, envelopes, chairs and other miscellaneous office supplies, the report (GAO-03-328) said. Comparative shopping on the site ranged from 27,000 to 50,000 searches per day.

But even though purchasers shopped around a lot, they often did not buy products through GSA Advantage, GAO said. Over the past five years, agencies bought at most about 0.5 percent of overall schedule products at the online store. In fiscal 2002, for example, agencies ordered 129,370 products worth a total of roughly $81.6 million through GSA Advantage. This was 0.4 percent of overall schedule sales.

The GSA site was originally designed to sell stock items such as furniture, tools, computers and other equipment. But GSA now requires all schedule vendors, including those who sell complex technology and services, to offer their products through GSA Advantage.

"GSA Advantage has had only limited success as an online market research and ordering tool," the report concluded. GAO conducted its research from March to December 2000, at the request of Rep. Tom Davis, R-Va., chairman of the House Government Reform Committee.

Despite the mandatory vendor participation policy, 1,200 out of 9,800 schedule contracts, or 12 percent, did not offer information on GSA Advantage as of September, the report said. They told GAO that it was too expensive and complicated to participate. Some vendors reported it could cost as much as several thousand dollars to upload data about technical products onto the system.

"Because of initial design limitation, GSA Advantage has not been an effective means for acquiring complex products and services, particularly information technology services that make up the most of the growth in schedule sales," the report said. An e-buy tool, acquired in August, has not proven too helpful, GAO added. The tool enables contracting officers to describe a service or product they need and then post a request for quote inviting eligible vendors to bid for the work. But vendors have responded to only about half the requests for quotes, the report said.

GAO suggested that GSA develop a business plan to get the online store on track. This plan would include an assessment of what products and services are best suited for online research and shopping, and would look at whether GSA Advantage is the right place to offer all the schedule products. The strategy would also include ways to measure the store's success and the satisfaction of government purchasers and vendors with the site.

GSA agreed with GAO's recommendations.