House Armed Services Committee Chair Thornberry Unconcerned About Potential Amazon Monopoly In Procurement Process

November 13, 2017 – San Francisco, CA – GOPer Mac Thornberry chairs the House Armed Services Committee, making him one of the most powerful men in Congress. As we go to press the Committee is considering HR 2810, the House version of the 2018 Defense Appropriations Act which will fund DOD.

DOD’s budget is enormous [as is the 2,400 page bill itself], for example Pentagon and related spending totaled $598 billion, about 54% of the fiscal year 2015 U.S. discretionary budget.

How the federal government funds departments and how those department acquire the supplies needed to carry out their charter has always been a Byzantine process, but this year’s bill had an interesting twist as specific language appeared in HR 2810 that seemed destined to create a framework whereby DOD could establish monopoly like relations with huge online retailers such as Amazon.

The first reference we found on this controversy appeared in The Intercept, certainly no friend of the administration but in this case the reporting appears to be spot on.

“Under pressure from anti-monopolists, House and Senate negotiators tweaked the controversial “Amazon amendment” this week, but waved it through nonetheless. The provision seeks to turn over federal procurement of commercial off-the-shelf items, a $53 billion market, to e-commerce portals. And with Amazon as the runaway leader in that space, critics say that even with the modifications, the provision still favors the online retail giant, giving it a pathway to billions of dollars in new revenue...’This amendment looks like it will crown Amazon as an official gatekeeper to government procurement,” said Lina Khan of the Open Markets Institute…’” [source, David Dayen, Congress Prepares to Send Major Gift to Amazon, While Trump Battles “Amazon Washington Post” ]

In speaking with House Armed Services Committee spokesman Claude Chafin, we queried:

“Let’s break this down - Section 801 states, “...the award of a contract to an online marketplace provider pursuant to subsection (a) 2 may be made without the use of full and open competition...” so I am not reassured, given the language of the section, indicating that some manner of monopoly could be granted to suppliers. Don’t see this ruling out the USG doing business w/ Amazon B 2 B services absent a competitive bid.”

To which Mr. Chafin responded:

“You are making a leap on the monopoly issue. The government has every incentive to do business with multiple e-commerce portals under the legislation. Those portals will compete with each other, while vendors compete for government business within each portal- negating the need for an artificial competition run by GSA.”

And indeed the latest version of the House bill, post the Senate/House conference, rescinded the original bill language which would have held mandatory competition in abeyance as it applies to such commerce and stealthily re-instituted the controversial marketplace as per the Senate version [see note].

As a compromise, that may still be further massaged as this creaky process goes forward, the ‘Net purchasing program is still part of the funding bill, but now apparently going to be slow-walked, the current House language being:

“Subtitle E—Provisions Relating to 2 Commercial Items, 3 SEC. 846. PROCUREMENT THROUGH COMMERCIAL E-COMMERCE PORTALS.

a) ESTABLISHMENT OF PROGRAM. - The Administrator shall establish a program to procure commercial products through commercial e-commerce portals for purposes of enhancing competition, expediting procurement, enabling market research, and ensuring reasonable pricing of commercial products. The Administrator shall carry out the program in accordance with this section, through multiple contracts with multiple commercial e-commerce portal providers, and shall design the program to be implemented in phases with the objective of enabling Government-wide use of such portals.”

So the spirit of the original intent remains.

This kind of go between is typical when dealing with Congress which rather than dealing with potential defects in proposed legislation, basically responds with, “believe what we tell you, not what your lying eyes are reading in the legislative text”

What makes this single item of import is that despite the legislative to-and-fro, it could very well still eventually guarantee Amazon huge potential profits despite the fact that Amazon’s owner Jeff Bezos has engaged with the MSM in a silent coup-de-etat using his newly acquired media hammer, The Washington Post.

For the record, Thornberry a GOPer from Florida ran away from Trump during the election, refusing to endorse him and even skipping the historic nominating convention. The Congressman tried to shuffle around the mater, conflating the showy Trump campaign with that of his opponent, Hillary Clinton.

“MSNBC's Hallie Jackson pressed further on whether Thornberry is someone who has the concerns he referenced moments earlier, to which Thornberry responded, "Sure. I've got concerns about what both candidates have said.

…As far as Thornberry's absence at the Republican National Convention and the lack of endorsement for Trump, the chairman noted that he has attended about half of the conventions since he has been in office and was visiting troops that week in July.” [source, Nick Gass, House Armed Services chairman: 'I've got concerns' about Trump , Politico]

Right, he had to choose that one week out of 52 to be out of the country…

In summation, DC mendacity knows no bounds; we have an anti-Trump GOP Chair of one of the most powerful committees in Congress totally unconcerned about the impact of the new procurement limited-hang-out on the city’s Deep State battle to the death against a sitting president.

End note:

Senate version of the proposal:

“The Senate recedes with an amendment that would require an implementation plan and a corresponding review by the Comptroller General of the United States, increase the General Services Administration's flexibility to implement through a phased approach, direct the submission of requests for exceptions, and limits initial implementation to procurement of items in contract amounts below the Simplified Acquisition…The conferees note that this effort to align the government's requirements with available commercial e-commerce portals provides unique opportunities and will pose challenges during implementation. It will require diligence in uncovering all of the potential implications…”

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