GSA announces new purchase card providers

The General Services Administration on Thursday announced awards to all four companies that bid for spots in a program to provide credit card services to federal agencies.

The contracts for GSA's SmartPay2 program to supply purchase, travel, fleet and integrated charge card services went to Citibank, GE Capital Financial, JPMorgan Chase and U.S. Bancorp. They will last until 2018 if all options are exercised, and have an estimated value of $26 billion annually. There is no cap on the value.

A spot in the program means the companies are eligible to market their services; the awardees will undergo another layer of competition as they vie to win individual agencies' business. Agencies have until November 2008 to complete the transition to new providers.

The five existing SmartPay providers handled $26.5 billion in purchases and 98.6 million transactions in fiscal 2006, according to David Shea, the program's director. Two of those providers -- Bank of America and Mellon Bank -- opted out for the next round, meaning their customer agencies will need to look elsewhere for service. But Shea noted that regardless of their current provider, agencies are expected to entertain offers from all four awardees.

Shea said GSA has trained 114 agency charge card managers on the transition process, and is scheduled to teach 60 more in the coming months.

The new cards will feature several improvements, Shea said, including a graphic design that makes them easier to identify. They also will have elements aimed at improving oversight. For instance, supervisors will receive a notification e-mail when employees use the new cards, making it easier to track what is bought and when.

But Shea emphasized that despite some highly publicized past cases of misuse, the "cards are overwhelmingly used for appropriate purposes."

Neal Fox, who managed the SmartPay program as an assistant commissioner for acquisition at GSA and now runs a consulting firm, praised the agency for retaining the strongest elements of the program while adding capabilities.

The retention of the three vendors that bid to stay in the program is not surprising, Fox said, nor is the addition of GE Capital Financial. But, he noted, the newcomer is a capital financing company rather than a traditional bank, adding a new twist.

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