Charge Cards Get Smart

Officials from the Defense Department, the Office of Management and Budget and the General Services Administration gathered Monday in Washington to celebrate new governmentwide charge card contracts, which they touted as the largest charge-card procurement ever. GSA estimates that federal employees will use the purchase, fleet and travel cards to pay for $100 billion in expenses in the next 10 years.

The officials said the new deal would cut agencies' administrative costs and make it faster and easier to pay for small purchases and travel expenses. In addition, they predicted that the new contracts, under which six companies will compete to provide card services, will eventually allow federal employees to use single "smart cards" for all their purchase, fleet, and travel expenses, and for identification, access to secure buildings, and other purposes.

"This is a form of the ultimate democratization of the acquisition process," said Deputy Defense Secretary John Hamre. "We don't need the expertise it takes to buy an aircraft carrier when you buy a ream of paper. We've treated this like only a cadre of appointed priests are able to do this."

OMB Deputy Director G. Edward DeSeve called on managers to streamline the procurement process before giving employees charge cards.

"We can't give them a card and then have seven levels of approval," DeSeve warned. "This procurement requires creativity to reengineer the back-room office."

Under the new contracts, federal agencies will choose from six companies for charge-card services: American Express, Citibank, First National Bank of Chicago, Mellon Bank, NationsBank and US Bank. Agencies can choose one contractor for purchase, fleet and travel cards, or mix-and-match card providers.

Contractors will also offer additional services to agencies under the contracts, including online transaction systems, additional authorization controls for card use, stored-value cards, debit cards, and smart cards. The providers may also set up intragovernmental transaction systems, allowing agencies to use cards to transfer funds to other agencies.

The new contracts go into effect Nov. 30, when the current charge card contracts expire. Agencies are putting together teams to review contractors' offers, and GSA is holding a three-day conference in Washington this week to allow agency personnel to meet with contractor representatives. Agencies are required to give fair consideration to all the contractors. But because GSA has already screened the companies as part of the award process, selections should move more rapidly than they would during a standard procurement.

Some agencies are hoping to pool together to get better deals from the vendors. GSA is encouraging agencies to work together if they have similar needs.

Ten years ago, when the first conference on purchase cards was held, only a dozen people showed up, said Steven M. Putney, president of US Bank corporate payment systems. By contrast, 1,300 federal managers and employees attended the first day of GSA's charge-card conference on Monday.

"It's taken us a long time to get here," said Dan Goren, senior vice president of American Express Government Services.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


When you download a report, your information may be shared with the underwriters of that document.