The July 1 requirement by the U.S. General Services Administration (GSA) will increase its Internet-enabled suppliers from 4,000 to 9,000 and will put about 4 million products on the agency's online exchange, GSA Advantage.
But analysts say they believe the move is still a far cry from making federal business-to-government e-commerce a reality.
Even with the 4,000 Web-enabled suppliers, only 0.2 percent of orders from suppliers on GSA contracts are handled online, according to a recent survey by New York-based research company Jupiter Media Metrix.
But GSA officials insist the deadline is a major step in making online purchasing a reality for the federal government. The suppliers sell government agencies everything from office supplies, tools and equipment to information technology.
"We think the world at large will be doing purchasing online more and more and this is a way to enable our customers to take part in that," said Pat Mead, the deputy director of acquisitions for the Federal Supply Service at the GSA. "This is a big move. We will be the only federal site to have this breadth of products and services for online purchasing."
However, analysts say they doubt the GSA effort is enough to bring the federal government's purchasing processes online.
"This is not the best approach," said Chris Baum, an analyst at Gartner. "They are looking at this in a shot-term way. They are not providing adequate support to make business-to-government work. They haven't provided best-practice tools and services to their contractors, but are still requiring them to get their catalogs online."
Although the GSA does not handle all government purchases, most federal agencies rely on the the agency to provide support in their individual procurement efforts, officials said. So by bringing its suppliers online, the GSA is bringing a lot of federal purchasing to the Web.
Mead defends the agency's efforts in helping its suppliers get Web-enabled. She said companies are given a road map that explains how to get online, which is revised on a continuing basis. The agency has also held 18 training sessions for all of its contractors across the United States.
The GSA said it expects to have a training lab up and running in Arlington, Va., by the end of the month, where suppliers can get consulting help for getting set up on the Web.
The GSA Advantage Web site is one of the first federal government online exchanges. After launching the site in 1995, the GSA first pushed to bring its information technology contractors online and then moved forward with its other suppliers. Although it initially asked contracted suppliers to list their products on the site in 1999, the agency put the July deadline in place last fall.
After the deadline passes, the GSA will tell contractors who have not made an effort to place their price and product lists online that unless they make significant progress in 60 days, their contracts will be canceled.
Although governmental online initiatives have grown in the United States during the past several years, little government procurement takes place online. For instance, a recent survey found that despite high-profile efforts by the Clinton administration to increase the number of transactions between businesses and the government, only 1 percent of federal spending occurred over the Internet in 2000.
Analysts agree that one of the factors slowing federal business-to-government e-commerce is the lack of leadership and a solid methodology for getting government contractors online.
In Jupiter's most recent survey on the business-to-government market--in which it estimates online purchasing will reach $286.1 billion by 2005--the company found that prospects for a major push toward a business-to-government-enabled federal government are unclear.
Although President Bush backs moving all major federal purchasing to the Internet, he has earmarked only $100 million over the next three years for the development of government e-procurement, according to Tim Clark, an analyst at Jupiter who authored its latest government survey.
"More needs to be done at a higher level," Clark said. "The need for a standard way of getting government contractors online is great."
In the GSA's current effort, "the government is not helping enough with enabling vendors to list their products online," Gartner's Baum said. "They are also treating all vendors the same regardless of e-commerce experience, which means those who have experience...are put in the same category as those who are way behind."