Three major federal agencies have chosen charge card vendors under new contracts that the government will use to pay up to $100 billion in expenses over the next 10 years.
The Veterans Affairs Department picked Citibank to be its provider of purchase, travel and fleet cards starting Nov. 30. The General Services Administration also chose Citibank for its purchase and travel cards, but plans to award fleet cards separately. The Defense Department selected NationsBank for its travel cards. DoD is still deciding on a vendor for purchase and fleet cards.
The National Gallery of Art chose American Express as its travel card vendor.
Six vendors are offering charge card services to agencies--American Express, Citibank, First National Bank of Chicago, Mellon Bank, NationsBank and US Bank--though American Express announced last week it would no longer pursue federal business. Agencies are reviewing the vendors' charge card services and then issuing task orders under governmentwide contracts that the General Services Administration awarded in February. The new contracts take effect Nov. 30, when the current charge card contracts expire.
GSA officials estimate that the government will use charge cards for $100 billion in expenses over the next 10 years. Veterans Affairs, for example, has 34,200 purchase card holders who buy more than $1 billion worth of goods and services each year, according to VA's Financial Services Center. About 20,000 VA employees hold travel cards, making $20 million in travel purchases each year.
GSA's Sue McIver said the process of picking the new card services is forcing agencies to review the way they conduct business.
"The contracts are bringing together people from different parts of the organization," McIver said, adding that in many agencies people who handle travel expenses, business purchases and fleet management are working together on the new task orders. "This creates an opportunity for agencies to think about where they have duplication in programs."
Vendors are luring agencies with advanced charge card services, including integrated processing, single cards for all expenses and online transaction systems.
Agencies may also "tag-along" on other agencies' task orders if the agencies' card service requirements are similar.
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