Date: April 13, 2000

Sunset Review: April 13, 2004

SUBJECT: Government Purchase Card Program
 

1.    PURPOSE. This Directive sets forth policy for use of the Government purchase card for (a) making micro-purchases and placing task or delivery orders, as authorized in the underlying contract or agreement, without additional paperwork, and (b) use as a payment mechanism for procurements above the micro-purchase limit.

2.    SCOPE. This Directive applies to all bureaus, the Departmental Offices (DO), the Office of Inspector General (OIG), and the Treasury Inspector General for Tax Administration (TIGTA).

3.    POLICY. It is the policy of the Department of the Treasury that:

    a.    for micro-purchases of goods and services up to $2,500, purchase cards issued to end users outside of procurement offices shall be used in preference to other methods of procurement. (The micro-purchase limit for construction is $2,000.);

    b.    for purchases over the micro-purchase limit, use of the purchase card as a payment method with necessary documentation is encouraged;

    c.    purchase card invoices shall be paid in full in a timely manner prior to reconciliation in accordance with the Prompt Payment Act and on a schedule to maximize the contractor rebate;

    d.    under the micro-purchase limit, cardholders shall make an effort to use small or small and disadvantaged businesses, and women-owned businesses whenever possible;

    e.    bureau programs must provide cardholder training prior to card issuance to include information on procurement regulations in the FAR; the Department of Treasury Acquisition Regulation (DTAR); the JWOD Program; the small business program; and, the environmental affirmative procurement program;

    f.    purchase cardholders are encouraged to use web-based shopping malls and electronic transmission of information;

    g.    convenience checks associated with the purchase card program should be used for purchases from vendors who do not accept credit cards, in preference to use of cash or third party drafts.

    h.    billing sites should be consolidated to the extent possible, and finance offices will use simplified accounting methods such as simplified cost assignment;

    i.    bureau programs will use contractor reports for 1099 tax data collection to eliminate manual data collection by cardholders;

    j.    purchase cards will not be used as fleet cards except in limited emergency situations.

4.    PURCHASE CARD PROGRAM GOALS AND DEVELOPMENT.

    a.    The purchase card program will be standardized and automated throughout the Department to the greatest extent practicable;

    b.    Web based, contractor supplied automation will be used to the maximum extent practicable to minimize paperwork and achieve the goal of a completely electronic program; and,

    c.    Integration of card business lines such as purchase, travel, and fleet card programs is encouraged, as well as use of Smart Cards.

5.    PURCHASE CARD SERVICES.

    a.    Purchase card services are available through a task order issued at the Departmental level against the SmartPay contract awarded by the General Services Administration (GSA). The Department will use one contractor to the greatest extent possible to maximize the advantages of standardization.

    b.    Purchase cards are issued by the SmartPay contractor to an individual Government employee for official Government purchases only. Purchase cards have electronic controls, which can be set by bureau coordinators to restrict use beyond a certain dollar amount and with certain types of vendors. The cardholder will receive a monthly statement of account listing purchases which must be signed electronically or manually by the cardholder and an approving official or supervisor and sent electronically or manually to the designated billing office for payment. Use of an approving official is optional if other audit controls are in place.

    c.    Various reports are available from the contractor to help bureaus manage their program and identify areas needing improvement. Electronic reports should be used whenever possible. If paper reports are required, bureaus should ensure that only those reports actually utilized are ordered. Procurement offices are encouraged to use the reports to conduct spend analyses to obtain contractor discounts and improve buying efficiency.

6.    RESPONSIBILITIES.

    a.    The Director, Office of Procurement, Departmental Offices, as the Senior Procurement Executive, shall provide Departmental oversight of the program and:

        (1)    establish policy for use of the purchase card; and,

        (2)    promote correct and efficient use of the card.

    b.     The Deputy Assistant Secretary (Administration), Heads of Bureaus, the Inspector General, and the Treasury Inspector General for Tax Administration, as it relates to their respective bureaus and offices, are responsible for establishing and managing the purchase card program to achieve maximum cost efficiencies, and shall:

        (1)    appoint a purchase card coordinator to manage their program and work with the Office of Procurement on purchase card issues;

        (2)    set up a system to control issuance and revocation of cards within the bureau;

        (3)    provide training and procedures for cardholders and approving officials prior to issuance of the purchase card;

        (4)    delegate cardholder spending authority and individual spending limits in writing, and ensure that funding is available prior to card use;

        (5)    manage and conduct oversight of the program to promote efficient use and guard against waste, fraud and abuse; and,

        (6)    reduce to the greatest extent possible, requisitions sent to bureau procurement offices for supplies or services which can be purchased by cardholders outside of procurement offices.

7.    PROCEDURES.

    a.    Bureaus will conduct their purchase card programs in accordance with the Smart Pay contract provisions and take advantage of the services and rebates offered. Generic procedures and training materials available under the contract should be used. Bureau purchase card procedures shall maximize cost savings and not be overly restrictive. A copy of bureau procedures should be made available to the Office of Procurement.

    b.    The purchase card program requires close coordination between the finance and procurement offices. Funding for micro-purchases made using the purchase card should be on an annual or quarterly basis. A requisition should not be required for individual micro-purchases made using the purchase card by end users outside of procurement.

    c.    Exit procedures should contain provisions to assure final accounting and cancellation of the purchase card when a cardholder leaves the agency.

8.    AUTHORITIES.

    a.    41 U.S.C. 428.

    b.    Treasury Order 101-30, "Designation of "Head of the Agency" for Procurement Matters."

    c.    Treasury Directive 12-11, "Procurement Authority."

    d.    Executive Order 12931, "Federal Procurement Reform."

9.    REFERENCES.

    a.    5 CFR Part 1315, Prompt Pay

    b.    Federal Acquisition Regulation Parts 8,13, and 32.9

    c.    Treasury Financial Manual, Volume 1, Part 4, Chapter 4500

    d.    Civilian Agency Acquisition Letter 99-2, dated September 13, 1999

    e.    Final Guidance on Environmentally Preferable Purchasing for Executive Agencies, 64 Fed. Reg. 45810 (1999)

9.    CANCELLATION. Treasury Directive 76-04, "Government Purchase Card for Small Purchasing," dated December 15, 1993, is superseded.

10.    OFFICE OF PRIMARY INTEREST. Office of Procurement, Office of the Deputy Assistant Secretary for Management Operations, Office of the Assistant Secretary for Management and Chief Financial Officer.