May 27, 2001

Uncle Sam Sold $3.6 Billion in Goods to the Public Online Last Year from 164 Web Sites

Contact:

Lee Rainie
Director, Pew Internet & American Life Project
202-296-0019

Allan Holmes
Editor in chief, Federal Computer Week
703-876-5102
Judi Hasson
Editor at large, Federal Computer Week
703-876-5099
Or contact: Graeme Browning, 301-775-1983 (cell)

Uncle Sam Sold $3.6 Billion in Goods to the Public Online Last Year from 164 Web Sites
The government “shopping mall” does more e-retail than Amazon.com

Washington, D.C. (Sunday, May 27) — The federal government operates 164 Web sites that sell products and services to the public, and those sites generated $3.6 billion in sales last year, substantially more than the $2.8 billion of business done by the giant Internet retailer Amazon.com, according to a new study released today by Federal Computer Week magazine and the Pew Internet & American Life Project.

The first-ever study of the extent of the federal government”s plunge into the digital marketplace reveals that citizens can buy hundreds of goods from Uncle Sam, including:

  • Rare wild mustangs and burros from the Bureau of Land Management (http://www.adoptahorse.blm.gov/).
  • Oil-drilling leases in the Gulf of Mexico from the Minerals Management Service (http://www.gomr.mms.gov/).
  • Framed “Silken Flame Barbie” photographs from the U.S. Postal Service (http://www.postmarkamerica.com/usps_inside.cfm).
  • Gravesite flowers at American military cemeteries overseas from the American Battle Monuments Commission (http://www.abmc.gov).
  • Prime federal land, including a light-keeper”s house in Sault Ste. Marie, Michigan, from the General Services Administration (http://www.gsa.gov/pr/prhome.htm).
  • A mothballed Coast Guard cutter via the GSA Auctions site (http://www.gsaauctions.gov/).
  • The finest luxury items seized in drug busts, including high-performance sports cars, from the U.S. Marshals Service (http://www.bid4assets.com). The Federal Computer Week/Pew Internet Project analysis shows that the largest e-retail operation is run by the Treasury Department, which sold $3.3 billion in U.S. savings bonds, T-bills, and Treasury notes to the public in 2000. This was a significant, and growing, part of the Treasury Department”s $15.6 billion in retail sales last year.

    In addition to these purchases, many government services can be ordered online, including tickets from Amtrak, campsite reservations from the National Park Service, and subscriptions to the CIA”s clippings service that translates articles in the foreign press. Some nonprofit sites linked to government sites sell souvenirs.

    A full listing of the e-retail federal sites will be available Monday at http://www.fcw.com, and a package of stories about Uncle Sam”s e-commerce appears in the May 28 issue of Federal Computer Week. (Note to reporters: If you would like to see the entire list of links before they are available online, email Judi Hasson at jhasson@fcw.com and she will send you a PDF spreadsheet of them.)

    “The blending of the dot-gov world and the dot-com world is taking place at Internet speed and has significant policy implications,” said Lee Rainie, Director of the Pew Internet & American Life Project, which provided research help and funding for the magazine”s project. “At one level, it is heartening to see the government embrace this sales tool, the special reach of online auctions, and the many efficiencies of the Internet to save taxpayers” money. But it is obvious some agencies are flailing around. We see some pretty elemental mistakes that would bankrupt a business if it were doing e-commerce the same way.”

    Fans of Southern blues of the 1940s, for example, would never know that the Library of Congress” American Folklife Center (http://lcweb.loc.gov/folklife/) sells audio cassettes of historic recordings from that period because a link to the center is buried three layers down in the library”s Web site.

    In addition, there are serious questions about whether the government should be selling some of the goods it does. “Our study shows the public likes what it can get online from the government, but it also shows the government has a lot of work to do to make the process easy and efficient for purchasers,” said Allan Holmes, Editor in Chief of Federal Computer Week. “Not everyone is sold on the government selling online. The issue is beginning to draw the attention of industry lobbyists and even Congress.”

    This month, four House members wrote a letter to the acting administrator of the General Services Administration suggesting that GSA”s new online auction site violates a federal law that tries to keep the government from competing with private sector firms selling goods and services to the public. The letter, which was signed by Reps. Dan Burton (R-Ind.), Connie Morella (R-Md.), Tom Davis (R-Va.) and Albert Wynn (D-Md.), requested the opportunity to discuss the issue with the GSA.

    Some of the other highlights of the Federal Computer Week/Pew Internet Project study:

  • Rulon Gardner, a 2000 Olympic gold medallist in wrestling, bought a $56,000 Dodge Viper from the U.S. Marshals Service that had been seized in a fraud case.
  • Among the most prominent government-backed e-commerce sites is Bid4assets.com, which handles auctions for the Marshals Service and other federal law enforcement agencies. Recent sales on its site include helicopters, land in Hawaii, a Lambourghini Diablo, and an entire Pentagon commissary, including checkout counters and walk-in freezers.
  • The Defense Department operates at least eight sites that sell virtually everything that is available at its commissaries. Military personnel and retirees can purchase these low-priced goods with government identification. Products are shipped all over the country, creating a vast new market for the commissaries that only used to sell to people who lived near military installations.
  • At least one government-run site is authorized to conduct fund-raising. The site maintained by the American Battle Monuments Commission to raise funds for the World War II Memorial in Washington, D.C., (http://www.worldwariimemorial.com) has garnered $2.3 million in online donations.
  • The variation in federal e-commerce sites is substantial. Some are highly sophisticated, and some are quite hard to navigate. There is no coordinated federal policy, nor is there a standardized way to handle the funds from the e-sales, many of which are put into the government”s general fund without much accounting of where they originated. The study by Federal Computer Week and the Pew Internet Project began with the creation of a Web spider that searched the Web for potential e-retail operations run by the federal government. After sites were identified, reporters and researchers from Federal Computer Week checked them all to determine which actually sold goods or services to the public. The sites were then grouped by agency or division, and officials at each agency were asked about the items or services old from the site and how much revenue the sales generated last year.

    Sites were included on the list if they allowed a complete online purchase or if they allowed consumers the chance to begin a transaction, either through a downloaded form, or via a toll-free number.

    The study is a “snapshot” of the sites that were identified in March and April, 2001 and it is possible that this survey has not covered all the federal Web sites conducting sales to the public on the Internet.

    Established in 1987, FCW Government Technology Group is the market leader in media for the government IT community. Together, Federal Computer Week (http://www.fcw.com) and civic.com ((http://www.civic.com) magazines reach 148,000 subscribers in federal, state and local governments and the IT industry supporting them. FCW also produces market-leading events — Federal 100 and Government CIO Summit.

    The Pew Internet & American Life Project is a nonpartisan, independent research organization fully funded by the Pew Charitable Trusts to examine the social impact of the Internet. One of its missions is to examine the effect of the Internet on government, politics, and the nation”s civic life. The Project helped fund the research efforts by Federal Computer Week and helped conceive the resulting package of stories. Editorial decisions were made by Federal Computer Week.

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