GovernmentExecutive.com

Legislation that would double or triple the $2,500 purchase card ceiling is on the horizon, according to House Government Reform Committee Chairman Tom Davis, R-Va.

The $2,500 cap has "been in effect for a few years, and $2,500 can't buy what it used to," Davis said in a speech at a Washington conference hosted by VISA U.S.A. Inc. "I think it's inevitable ... at some point we'll double it or triple it."

Currently the Homeland Security Department's limit, known as the micropurchase threshold, is $7,500, with a $2,000 limit for construction-related purchases.

Davis said he won't try to raise the limit now because Senate Finance Chairman Charles Grassley, R-Iowa, would "try to come in and undo the whole thing."

Grassley and several other lawmakers have sponsored legislation intended to stem purchase card abuse, including requiring credit checks for cardholders, and asking agency inspector generals to routinely audit card programs.

Davis said measures to strengthen charge card programs, used for the procurement of routine items and for travel expenses, are unnecessary and contradict the purpose of the program, which is to make purchasing more efficient. The General Service Administration charge card program, SmartPay, contracts with five banks, and savings estimates total more than $1.6 billion annually in administrative expenses.

"Unfortunately, sometimes people misuse charge cards. It happens in my house, and it happens in government," Davis said. "You got enough cards out there that someone's going to misuse it...we are willing to trade off a few bad transactions for overall savings."

Government charge cards have helped trim administrative costs in purchasing inexpensive goods and services, but they also have been abused by federal workers who have used them for everything from designer briefcases to prostitutes to photos of Elvis Presley purchased at Graceland.

Senate Governmental Affairs Chairwoman Susan Collins, R-Maine, introduced the 2005 Purchase Card Waste Elimination Act in February intending to encourage agencies to increase efforts to educate employees on how to use the charge cards and find discounts for government buyers.

In March, the Office Management and Budget issued new guidance intended to centralize government charge card policies and establish minimum standards including requirements for background credit checks for cardholders

Davis did not address Collins' legislation or the new OMB guidance, but said additional regulations are unnecessary. Defenders of the programs, such as Davis, believe that increasing regulations would be akin to spending $1,000 for the purpose of saving $1.

"We can't get so caught up in procedures that we lose the point of the program," Davis said.

The lawmaker also addressed the recent loss of government worker personnel data by the Bank of America and said that he does not believe that new legislation is appropriate right now.

"We need to become more careful with the credit card information," Davis said.

COMMENTS

• Increasing the single purchase limit on the Government Purchase Card is a must. However, there are enough rules in place to discourage any rational person from accepting these (collateral/volunteer) duties. The Government "travel card" is a different issue. Travelers are required to have a "Government issued" card. If the employee doesn't accept a Government issued card, they are not allowed a travel advance. The employee is 100% responsible for payment of all charges to the card, yet they are not allowed to use the card for any and all expenses incurred during travel, not even if they stay within per diem. And this is what the government considers abuse. I know. Several years back, my schedule changed while I was on travel. This required that I purchase some clothes. The total cost was insignificant, yet when I got home, I received an email, demanding an explanation of the purchase of a $12.00 shirt. Almost immediately I was approached my Department Head, asking for an explanation. This was considered an abuse of the card. If you want to cut down on abuse, redefine the term, and redefine the usage of the card. If an employee is responsible for paying the bill, it should be of no concern to the Govenment what they use it for. GovExec.com reader Posted May 16, 2005 12:33 PM
• As an Air Force acquisition contracting officer, I am under the impression that the micro-purchase threshold was set at $2,500 to be in compliance with the Competition in Contracting Act(CICA)threshold of $2,500 and likewise the $2,500 threshold of the Service Contract Act (SCA). Should the GPC threshold be increased, would this not mean that thresholds for CICA and SCA would first have to be increased? Donna R Barber Posted May 10, 2005 4:53 PM
• These reports need to clearly state the difference between credit cards for purchases and credit cards for travel! Both are being totally abused and there is no significant prosecution of the abusers. There absolutely is no reason to increase the limits. Also, there is no reason to require a gopvernment travel card because most people have their own credit card to use and if they follow policies they would have no problem in collecting before they have to pay the card. The Davis attitude is totally wrong and indicates what is wrong with government spending and the legislature. taxpayer Posted May 10, 2005 7:31 AM