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What is the Governmentwide Commercial Purchase Card?
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Posted On: Monday December 29th, 2003 at 12:00am EST
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Another product of procurement reform is the increased use of government purchase cards, which are used primarily used for micro-purchases, or those valued at $2,500 or less. The vast majority of the cards are issued to government employees authorized to make micro-purchases for their offices or units. Cards are also held by contracting officers, who may use them to make purchases up to $25,000 or to pay contractors. In 1998, GSA awarded five contracts with five-year options to provide federal agencies with a system called SmartPay to acquire commercial goods and services, as well as travel and fleet-related expenses. The GSA SmartPay program provides: (1) a streamlined purchasing process that eliminates the use of purchase orders and reduces administrative costs; and (2) an improved payment process that allows fully automated invoicing and payment processing. Purchase cards currently are issued to hundreds of thousands of federal employees who may use them with any authorized merchants.
While there has been no empirical information assembled to measure the impact, there are growing concerns about the increased use of purchase cards and their impact on the availability of contract opportunities for small businesses. Credit card sales have increased from $460,000 government-wide in FY1989 to more than $16 billion for FY2003. That makes them, as a procurement category, larger than awards to 8(a) firms, HUBZone firms, and women-owned businesses combined.
MBDA actively encourages MBEs to participate in this area of federal procurement and is taking positive steps, to facilitate their participation. MBDA and its resource partners can answer questions from MBEs about the SmartPay program and can assist you with becoming a approved credit card merchant. Approved merchants are positioned to participate in this $16 billion segment of government contracting as well as accept credit cards for payment by commercial customers, many of whom also prefer to operate in an electronic purchasing and payments environment.
Perhaps, most significantly, GSA schedule contract holders are required to accept the government purchase card for orders against their schedules valued at under the micro-purchase threshold. |
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