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The Senate on Tuesday approved bipartisan legislation to increase oversight and training for the use of federal purchase cards, in an effort to rein in reported spending abuses and boost the utilization of small businesses in government micro-purchases. But prospects for similar legislation to pass in the House are murky.

The bill (S. 457) addresses the use of credit cards provided by agencies that are designed to streamline government shopping by allowing approved employees to pay up to $2,500 for normal purchases of goods and services, or up to $15,000 in emergencies.

The Senate-passed legislation would require the Office of Management and Budget to issue guidelines for analyzing card use and assessing the practices of individual users, as well as for negotiating discounts from major vendors and identifying opportunities to channel card use toward small businesses.

It also calls on the General Services Administration to collect better data on use of the cards and to pursue point-of-sale discounts. Agency heads would be required to submit annual reports to OMB on card use, with OMB reporting to congressional oversight committees.

Sens. Susan Collins, R-Maine, and Russ Feingold, D-Wis., sponsored the bill, which is similar to legislation they introduced in 2004 that failed to move beyond the Senate Homeland Security and Governmental Affairs Committee.

In a statement announcing Tuesday's vote, Collins, who chairs that committee, said, "The American people have the right to expect the federal government to spend their tax dollars carefully and wisely." She said information obtained as a result of the bill "should prove invaluable in helping to better regulate and track the use of these cards, which account for billions of dollars of government spending."

Feingold focused on fraud associated with the cards, saying, "The abuses of the government credit card program, including the purchase of designer luggage, surgical enhancements, two cars and a motorbike, need to be stopped."

But Rep. Tom Davis, R-Va., chairman of the House Government Reform Committee, has long opposed extensive regulation of the purchase cards. Arguing that the program saves far more in administrative costs by simplifying the purchase of small routine items than it costs in fraudulent use, he consistently has supported raising the ceiling on the size of purchases that can be made with the cards, and has opposed requiring credit checks on employees eligible to receive them.

Legislation that would correspond to the Senate-passed bill has not been presented in the House.

"We plan to give this a careful look to see whether current management reforms are taking care of the remaining challenges in this area or if legislative intervention is necessary," said Robert White, a spokesman for Davis.

The inclusion of provisions to support small businesses is new to the Senate legislation, and received a warm welcome from Sen. Olympia Snowe, R.-Maine, chairwoman of the Senate Small Business and Entrepreneurship Committee.

"Federal agencies spend $16 billion each year through credit card orders that are not subject to federal competitive requirements, which leaves me concerned about fair small business participation in these purchases," Snowe said in a statement. The Senate bill would apply a 1953 Small Business Act goal that calls for 23 percent of government purchases to be made from small businesses.

COMMENTS

• Congress has no clue what cardholders do. They have a lot of nerve to talk about fraud waste and abuse -- look in the mirror. There are already five people looking over my shoulder at what I buy. Now we need more oversight?? The cost of employing the legions of APC's is far more than what the occasional abuse costs. Get rid of the APCs and use random inspections by an independent accounting firm. The micropurchase threshold needs to raised to $5,000. That will decrease needless recurrent purchases and administrative overhead. You can't buy much for $2,500 anymore. GovExec.com reader Posted June 14, 2006 12:59 PM
• In a statement announcing Tuesday's vote, Collins, who chairs that committee, said, "The American people have the right to expect the federal government to spend their tax dollars carefully and wisely." No, the American people have the right to expect supervisors of card holders to do their job. In a 3-year period, I never had a fraudulent purchase, including international opportunities during deployments, with a purchase card because all eight card holders knew I looked at the statements when they came in and I was not bashful about asking for an explanation when I thought I needed one. I was just doing my job and did not have any problems. I did have two problems with travel cards. One ultimately lost their security clearance and the other had their card suspended when misuse of the card was identified -- in the next statement after it happened, not 12 months down the road. Again, just doing the job that is expected by the American people. Ted Posted June 15, 2006 8:41 AM
• How much more purchase card regulation and training can we stand? I just spent three hours taking an on-line (which is horrible for training) course on the credit card program. One lesson covered how to set up a credit card program. Why do I, as a purchaser, need that info? There was even a question in the test about it. We are also required to take separate on-line Ethics and Section 508 courses, which are covered in the basic purchase card course. The administrative costs now outweigh any financial benefit on very small purchases. One of my statements contained a single $35.00 charge. I had to turn in 12 pieces of paper to support this one purchase. My supervisor and I both had to sign three sheets as certification that I had not broken any rule or law. Plus I had three other pieces of paper that aren't required for turn-in, but that I have to retain for my own records. One charge on my statement was an exception to my usual statement, which normally contains 15-plus purchases. Figure the cost of my labor and the material costs (paper, toner) just to copy the statement and backup documentation. I fully support background credit checks for personnel assigned a card, and the manager required to sign it. Punish the guilty. If someone intentionally misuses the card (government funds), charge them with an Antideficiency Act violation. More training and oversight does not make anyone a better person. They just know what rules/laws they are breaking. My retirement is in a few years, and I will celebrate the day I can cut up this card. GovExec.com reader Posted June 8, 2006 6:52 AM