The Defense Department has selected U.S. Bancorp to provide DoD personnel with purchase cards, giving the bank the largest purchasing card account in the world.
U.S. Bancorp, based in Minneapolis, is currently the sole provider of purchase cards to the U.S. government, but its contract expires at the end of November. Federal agencies are now selecting purchase, fleet and travel card providers from among six companies that won the right to compete for their business.
DoD's award to U.S. Bancorp means Defense buyers will continue to use the bank's International Merchant Purchasing Authorization Card (IMPAC) for purchases under $2,500. Some buyers are authorized to use the cards to make purchases up to $100,000.
In 1997, DoD used IMPACs for $2.75 billion in purchases. DoD accounts for about half of charge card transactions governmentwide.
DoD chose NationsBank as its new travel card vendor last month. American Express holds the governmentwide contract for travel cards, but in May, the company announced it would not compete for future federal business.
NationsBank has also won charge card task orders from the Transportation Department for purchase cards and the Interior Department for purchase, travel and fleet cards. The Veterans Affairs Department picked Citibank to be its provider of purchase, travel and fleet cards. The General Services Administration also chose Citibank for its purchase and travel cards, but plans to award fleet cards separately.
Small agencies can "tag along" on larger agencies' task orders to take advantage of big agencies' bargaining power. The Smithsonian Institution, for example, is piggybacking on Veterans Affairs' task order.
GSA estimates that federal employees will use the purchase, fleet and travel cards to pay for $100 billion in expenses over the next 10 years. Charge cards cut administrative expenses and make tracking payments easier, federal officials say. U.S. Bancorp estimates that the government saved $750 million over the past decade by using IMPACs.
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