B2B Payments

Federal Workers Allowed To Purchase Supplies From Online Retailers

Federal workers, through partnerships with several online retailers, will now be able to purchase equipment like desks or office supplies through an eCommerce network for the first time, The Washington Post reports.

The General Services Administration (GSA), which handles those purchases, has struck a partnership with Amazon, Overstock and Thermo Fisher Scientific under a three-year contract, during which those companies will sell important office items online to help increase speed and efficiency.

The purchases will have to be “micro-purchases,” or below $10,000 in value, and the GSA is expected to have the program running within three weeks, The Washington Post writes.

Bradley Safalow, chief executive of PAA Research, called it “kind of absurd” that this kind of program had not already existed, saying the program “presents an opportunity to save a lot of money for the federal government and in a way where they’ll know more about what’s being bought,” The Washington Post wrote.

The GSA is estimated to spend around $6 billion per year on open market credit card purchases.

GSA Administrator Emily Murphy, speaking with the Post, said the contract would come at no cost and would aid the organization in purchasing items online in such a way that the organization could minimize the risk of fraud.

For Overstock, the move is likely to be a huge boost, analysts say — the company has previously struggled to keep up with Amazon and other entities like Wayfair or traditional retail stores like Ikea in terms of selling furniture and supplies.

Leaders at Overstock said the new GSA initiative would help them with their retail operation. Overstock executive Jonathan Johnson, who took the helm in 2019, said the company’s typical base of selling things like chairs and artwork to furnish homes would also work for the government.

The GSA payments program, GSA SmartPay, has been going more digital as of late, with $250 million worth of online payments logged for 2018, up from $135 million from 2014. However, some critics have worried that Amazon would get too large a piece of the pie and shut out smaller competitors.

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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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