NEWSRELEASE
For Release: March 11, 2003
Contact: John McDowell (202) 205-6941
john.mcdowell@sba.gov
SBA Number: 03-11 ADVO
Questions Raised About Effects Of Federal Credit Card Purchases On Small Business
NASA Provides Data Unavailable From Other Agencies
WASHINGTON, D.C. A new study raises troubling questions about the effects of federal credit card purchases on small businesses. Although use of credit cards has been touted as streamlining federal procurement, the study finds that the amount of federal credit card purchases from small business actually may be decreasing.
"Use of credit cards has helped to streamline federal procurement," said Thomas M. Sullivan, Chief Counsel for Advocacy. "But, they seem to have the unintended consequence of diverting procurement dollars from small businesses. One of President Bushs small business priorities is full and open access for small businesses to government contracts. Agencies need to do a better job of monitoring their credit card purchases to make sure that small businesses have access to these purchases."
The report, "Impact of Purchase Card Activity on Small Business" authored by Eagle Eye Publishers, acknowledges NASA as the only agency that provided information to evaluate credit card usage.
Using the NASA data as a case study, the report found that NASAs small business share of federal purchase (credit) card procurement dropped six percent between FY 2000 and FY 2001. Moreover, the data found that NASA is short of meeting existing rules for setting aside government purchases between $2,500 and $100,000 for small businesses.
A recent GAO study noted that "well-defined criteria and consistent use of available data sources" are needed for a better understanding of credit card purchases from small business. Although the General Services Administrations contract with five major banks calls for the collection of socioeconomic data with each credit card purchase, this requirement has not produced usable data. As a result, most agency officials are unaware of purchase card spending patterns within their own agencies.
Federal credit card purchases have risen dramatically in recent years. In FY 2001, 3.2 million government credit cards were used to spend $19.7 billion on goods and services. Of this amount, $13.8 billion was spent on non-travel, non-automotive related items, which accounted for 6 percent of all procurement dollars.
For more information and the complete study, visit www.sba.gov/advo.
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Created by Congress in 1976, the Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. Appointed by the President and confirmed by the U.S. Senate, the Chief Counsel for Advocacy directs the office. The Chief Counsel advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. Economic research, policy analyses, and small business outreach help identify issues of concern. Regional Advocates and an office in Washington, DC, support the Chief Counsels efforts. For more information on the Office of Advocacy, visit www.sba.gov/advo, or call (202) 205-6533.