Begging Vern Edwards' forgiveness, I've placed one of his 2/9/2002 comments here.

"Sec. 211 would apparently permit all "service contractors" to submit monthly or biweekly invoices. But what about short-term (e.g., two or three-month), firm-fixed-price contracts for one-time services? Would SARA require the government to make monthly or even bi-weekly progress or partial payments instead of paying the contractor upon project completion? How would this provision improve services?

Sec. 224(d), about "professional engineering services," is unclear in intent, at least to me. Moreover, the parenthetical reference to 40 U.S.C. 541 is strange, since that section of the so-called "Brooks Act" architect-engineer selection statute does not include any "selection procedures," only definitions and the reference is not followed by "et. seq." The procedures are in 40 U.S.C. 544. Careless writing, no doubt. "

By Anonymous on Tuesday, March 12, 2002 - 12:00 pm:

Regarding the Increase In Authorization Levels of Federal Purchase Cards - Sec 32 of OFPP Act (41 U.S.C. 428) Is this not the section that sets the micro purchase threshold and not just the authorization level of purchase cards?

By Anonymous8 on Tuesday, March 12, 2002 - 04:50 pm:

The title in the Bill at the website calls it "Increase in Authorization Levels of Federal Purchase Cards".

Maybe a lawyer can tell us that one.

Do not know, however, who can tell us the impact in practical terms. Purchase Cards, when used as a buying vehicle, do not have an associated purchase order. I had thought that everything over $2,500 needed a purchase order / contract because of statutorily mandated clauses (e.g., EEO).

Are we effectively bringing back Purchasing Technicians, but making them the technical people who hold the Government Purchase Cards?

By Anonymous on Wednesday, March 13, 2002 - 02:58 pm:

Yes, I saw that Sec.221 is entitled Increase In Authorization Levels Of Federal Purchase Cards.

But I'm asking about Section 32 of the Office of Federal Procurement Policy Act (41 U.S.C.428) where they are saying strike $2500. and insert $25000. Doesn't that govern the micro-purchase limit and not the purchase card limit? Would that not change the competition threshold? You are right, I need a lawyer.

By C Mercy on Wednesday, March 13, 2002 - 03:48 pm:

This makes perfect sense. A KO can already use the card to 25k so I (guess) that the intent here is to raise the micro-purchase threshold from 2500 to 25000. This may thrill users but it will have a major and negative impact on small business....not to mention the fact that competition will be eliminated on a great number and very valuable acquisitions.

By Anonymous on Wednesday, March 13, 2002 - 04:38 pm:

The $2500. competition threshold has been in effect, what, around 20 yrs? And this little, unheralded paragraph could change that? The FAR reads that acquisitions exceeding $2,500 and not exceeding $100,000 are reserved for small business. That is not tied to the micro-purchase threshold, but would cardholders outside of Contracting adhere to that? I agree it would be a major impact on small business. Just think of the oversight required on a military base with 100's of cardholders. Also, the SCA and wage determinations required over $2500. could come into play. I keep thinking I must be missing something here. Somebody straighten me out.

By Anonymous8 on Wednesday, March 13, 2002 - 06:13 pm:

To C Mercy -

I am a KO with an unlimited warrant and also serve as a purchase card holder. I can only use my purchase card as a purchasing vehicle up to the micropurchase threshold ($2,500). I can use the purchase card as a payment vehicle above that amount - but there must be an underlying order or contract established.

For example, even to place an order for a subscription (exceeding $2,500) I was required to do a purchase order. Does not make sense to me.

Does your activity permit use of purchase card as a purchasing vehicle (without an order or contract)by KOs up to $25,000?

By formerfed on Thursday, March 14, 2002 - 11:13 am:

Anon8,

A purchase order is required for actions over $2,500. The purchase card can be used as a payment mechanism with the purchase order but certain cluses are required when the micropurchase threshold is exceeded.

That said, many agencies rountinely use the purchase card up to $25,000 without doing a PO. I'm not saying C Mercy's activity does. It's just I'm aware of many that do. Since the majority of purchase cards transactions are commercial in nature, the number of required clauses are very small. How many times have you invoked a clause with a vendor on a commercial transation less than $25,000? Anyway, several agencies skip doing the PO.

By Anonymous8 on Thursday, March 14, 2002 - 11:51 am:

Most of them do not even read or keep the thing. Did not mean to put someone on the spot. Sorry.

By C Mercy on Thursday, March 14, 2002 - 12:15 pm:

Yesterday I was making an educated guess as to wether raising the micro-purchase threshold was the intention of the legislation...today I know it for a fact. Since I see no other proiposed chabges in the bill,I assume that the small business set aside/reservation will be eliminated for card transactions as well as a host of other procedures.. Thus raising the limit has no practical effect simply because there are no extant vehicles which cover such matters as synopsis requirements,Service Contract Act applicability,FPDS etc.In order to increase the micro purchase threshold many other laws will have to be changed..I do not see that happening in this bill. And I hope it does not.

By opinionated on Thursday, March 14, 2002 - 12:56 pm:

The government credit card should be authorized for use by contracting officers, for purchase or payment purposes, up to the amount of their warrant (even up to unlimited).

In our department, if we place an order exceeding $2,500 by using the government credit card, we must have a supporting internal fund obligation document, so we simply use an internal Purchase Order. I think it wise to have an order w/terms/conditions in place for credit card buys for open market buys of larger dollar amounts

The competition threshold should be increased. To what amount, is the $64k question. The $2,500 is too low. Perhaps $10,000.

Regarding the most recent fiasco of cardholders making personal purchases, need to implement severe penalties for such misuse of federal funds. It's appalling that people have done this and gotten away with it. The credit card program in the Navy should be totally suspended until the house is cleaned, and funds have been repaid. Conversely, I think that agencies that have used the card with few if any infractions, and that have very good oversight and controls in place, should be permitted to go up to whatever increased micro-purchase level is established. Don't punish everyone for the stupidity of a few.

By Vern Edwards on Thursday, March 14, 2002 - 01:21 pm:

opinionated:

When you say that contracting officers should be able to use credit cards for "purchase or payment purposes," "even up to unlimited," are you saying that contracting officers should be able to make purchase transactions in any amount, even, say, $10,000,000.00, without a contract document other than the credit card transaction record or some other internal record of the obligation? No contract clauses?

By Opinionated on Thursday, March 14, 2002 - 03:36 pm:

Note: In the second paragraph, I did somewhat caveat that it is wise to have terms/conditions with large $$ open market buys. But hey - if a contract is in place, and the $10mil action is a task or delivery order, might that not be viable? I admit "unlimited" is stretching the limits of what is really reasonable, but I'm all for taking things as far as they can be taken as long as there is appropriate oversight and such.

What do you think about using the gov't credit card for all payments to contractors? Is it even feasible? Would gov't realize significant savings?
Purpose of the FAIR Act is to identify governmental activities that are not inherently governmental and do not require federal employees to perform. What about gov't payments? If appropriate gov't official (CO) approves the payment, it is required that the payment processing be done by federal personnel? It seems the actual process of money changing hands could be done commercially, via the credit card.

Signed: Still Opinionated

By Vern Edwards on Thursday, March 14, 2002 - 03:52 pm:

opinionated:

There are a large number of laws and public policies that apply to government contracts in excess of $100,000 and that require the government and the contractor to act or refrain from acting in certain ways during and after contract performance. Those requirements are implemented through the contract clauses that appear in FAR Subpart 52.2. Many clauses allocate certain risks between the parties. The parties manifest their agreement to those requirements and risk allocations by signing a contract document in which the clauses appear in print, either in full text or as incorporated by reference. Are you proposing the wholesale elimination of all of those requirements and risk allocation schemes so that agencies can use credit cards to make purchases? Or have I misunderstood you?

And what about statements of work for services and specifications of supplies?

By Anonymous on Thursday, March 14, 2002 - 04:45 pm:

To Opinionated: Backing up a couple of messages -
Don't you think this bill is answering that $64K question of what the competition threshold should be with $25,000?

By joel hoffman on Thursday, March 14, 2002 - 04:54 pm:

Opinionated, is payment by credit card cheaper? Is there a fee of a few percent charged to the seller? Seems like that would be quite expensive.

The COE has an automated contract payment system that seems to work well. Electronic invoicing directly by us to DFAS, with electronic payment, recording the payment is automated, etc. (I'm not an accountant, so the terms are probably not correct). Once we agree with the invoice, it takes us no more than a few minutes per contract on our part to process the payment. happy sails! joel

By Vern Edwards on Thursday, March 14, 2002 - 07:10 pm:

The seller pays a fee for credit card service and passes it on to the buyer when possible.

By joel hoffman on Thursday, March 14, 2002 - 07:55 pm:

Then I'd say that there are better and cheaper ways to make payment than to use a credit card, especially for contract payments of any significance.

Someone still has to account for the funding source for each charge and to keep the track of the payment against the appropriate contract. I have to do it at home.

Would the the savings, if any, be realized at the payment office (DFAS for DOD)? I don't see it saving me, the customer any time for larger contract payments.

Can someone please explain how using a credit card for other than incidental purchases saves the program or the taxpayer money at the bottom line over some good, automated invoice receipt, approval and disbursement system?

Aren't we treating a symptom, while pasting over the real problem? Is the real problem that most agencies are still using outdated, manual finance and accounting systems?

Automated systems do exist. The "Corps of Engineers' Financial Management System" (CEFMS), cross-linked to our contracting, contract management,(including contractor modules) and program management software is one such integrated system. I will admit that the integration is now just being perfected, but it's a very good system, in comparison with what we had a couple of years ago -stubby pencils abnd multiple, duplicate entries. happy sails! joel

By Vern Edwards on Thursday, March 14, 2002 - 08:14 pm:

Here's encouraging news from tomorrow's Federal Computer Week:

"The Defense Department has revoked the government-issued purchase cards at the Space and Naval Warfare Systems Command (Spawar) Systems Center after continuing reports of waste, fraud and abuse and until management of the program can be improved.

An audit of just a small number of the cards showed personnel had purchased items ranging from groceries to Lego robots to designer luggage and even one person who used the card to pay for his girlfriend's breast enlargement operation."

By Anon2U on Thursday, March 14, 2002 - 09:10 pm:

Most commercial items have the credit card cost already in the price. If making a large purchase using non credit methods, one should negotiate for an additional 2 to 3% discount due to them not having to pay that credit card fee.

Considering it takes my agency months to make most payments (with an automated system if you want to call it that), a lot of vendors push hard for credit card purchase with its immediate payment and will eat the 3% to get it.

As for the breast implants - the employee should go to jail and the approving official fired for failing to perform one of their most important duties as a supervisor/manager. I will admit that a crafty thief can slide a few common items past almost any supervisor but a breast implant surgery?

One big mistake supervisors make is to put too much trust in their employees. When I was a young pup, a supervisor of mine told me that statistics show one in ten people will steal something at one time or another. So if you have 10 troops working for you, the odds are that at least one is a thief. I admit that too much mistrust will kill morale but one must keep a wary eye and take action as necessary. The honest people will reward you for it.

Enough soap box for now.

By joel hoffman on Thursday, March 14, 2002 - 10:13 pm:

We make payments up to twice per month, in 15 days. Why can't the rest of the Government make at least one in 30 days? happy sails! joel

By Anonymous on Friday, March 15, 2002 - 11:00 am:

Joel,
I am down in the trenches in a Corp District Contracting Office. If our HQTRS thinks that CEFMS and SPS work well together, somebody needs to come talk to those of us with a shovel. In CEFMS, just to print out a purchase request, you have to click thru about 16 steps after you have logged on with your 3 different passwords. You can not use the pr from SPS, because any info in remarks by the customer does not interface and the pr prints out as 3 pages i.o. 1. We spend more time looking for work arounds than you would believe. The two systems are not compatible at all, especially for construction contracts. In my opinion who ever accepted SPS for DoD should be fired. Using these two systems together has added days to the procurement process. What CEFMS did was shift a lot of the work done by our F&A offices to the technical offices.
The Corps has its own Finance Center in
Millington, TN. We seldom use DFAS so we can make our payments faster. Since we do have our own FC, the credit cards save a lot of individual checks being cut, but again shifts more work to the technical offices. It is my understanding that agencies that use DFAS pay them for their services, so that has to be weighed in against paying extra percentages to the vendor with the credit card.
Breast implants for under $2500?

By formerfed on Friday, March 15, 2002 - 11:11 am:

Several agencies rountinely seek price quotes on the basis of using the Purchase Card for payment versus the regular government payment process. Generally a larger discount is granted for the Purchase Card.

By joel hoffman on Friday, March 15, 2002 - 11:57 am:

ANON, you are correct. Millington is not DFAS. Here I've been thinking that it had been converted to DFAS. I reviewed a flow chart we developed for the payment process on our multi-funded Chem-Demil contracts. DFAS-Indianapolis and DFAS-Rock Island and others collect data and record and report disbursements, but Millington is a COE center and makes the payments. No wonder the system seems to work.

I agree with you, regarding "SPS", but disagree with your analysis of the difficulty using "CEFMS" (yeah, logging in is a pain, but once in it isn't too bad, if you use it much). But a payment in CEFMS is relatively simple for contracts of any substance. Plus, the Windows version of the field office "Resident Management System" software is intended to be a single entry system to feed monthly or bi-weekly construction contract progress payment data to CEFMS (and eventually to SPS?)

Millington can theoretically make payment the same or next day, but for restrictions imposed on making early payment by the Prompt Payment Act. So payments are generally made within the periods prescribed by the PPA.

I just don't know why the the "regular government payment process", is so bad that it's more economical to use a VISA. Maybe nobody does.
happy sails! joel

By Anonymous on Monday, March 18, 2002 - 12:25 pm:

I need help with the big picture on how the FAR Council would enact these changes. I'm posting here because I'm especially interested in the change of the micro-purchase level/increase in credit card level from $2500. to $25000. and its possible ripple effect on several FAR parts other than Part 13, for example, display requirements, FAR 5.101 (a)(2). If SARA is passed as is, then what happens? How long does it take to get a FAC issued?

By anon224 on Monday, March 18, 2002 - 02:24 pm:

Article: GAO Calls Navy Lax On Employee Fraud

I have not seen discussion on intended uses of the credit cards. The article states:

Some charges are billed directly to the federal government; most are sent to the individual cardholder, who, after paying the bill, is supposed to be reimbursed by his or her agency.

I am familiar with a card (I declined) for travel. Travel advances were discontinued and the cards were issued. They were much more in the nature of a personal credit card (second type above) and had issues of our personal credit being involved as a credit card's maximum is considered an actual outstanding loan on mortgage applications.

Those cards were quite different from cards used to buy office supplies and even desktop computer related items in stores. Is the GAO mixing entirely different types of card and usage here?

By Anonymous on Monday, March 18, 2002 - 11:16 pm:

Sounds like that is the case. I read that travel cards are mandatory. Some agencies have negotiated a kickback from their use so they have directed everyone to use them for everything they can legally charge while on travel. They get upset if you use your personal credit card even though the result is the same to your credit report.

By Kennedy How on Tuesday, March 19, 2002 - 12:24 pm:

The first Government "travel" card I ever got was a Diners Club. I liked that plan, we charged our room and maybe meals, and had time to pay. Then, they lost the contract to AMEX. This was a nightmare, we'd get the bill almost the same time we got home. Since AMEX is due on receipt, we were late right off, and DFAS was taking 2-3 weeks to pay a voucher. It got so bad, management sent around a form saying we promised to pay on time, even before reimbursement.

I refused to sign it, since the only reason we were late in paying was because the reimbursement took so long. Then, they said if we didn't sign it, we'd lose the card privileges. So, I cut my card in half, stapled it to the form, and said, "Here you go!"

Later on, they sent me another card, but I didn't have to sign anything. I still have it, but since I haven't been on a trip for a long time, it's inactive. (These days, if you don't go on 2 trips per year, they inactivate your card.) Plus, they've cut back on the credit limit.

Frankly, I don't like the travel card system; I'd rather use my own. But, I can understand those who feel if they get sent on trips they don't want to go on anyway who complain they shouldn't be required to use their personal cards. On the other hand, back in the old days, those who had cards that gave you money back for every dollar you spent, you used that card every chance you get.

Kennedy

By anon224 on Tuesday, March 19, 2002 - 12:52 pm:

I refused both the Diners and AMEX cards and used my own. I had to finance my own travel that sometimes ran into months. It was worth it to me to avoid the problems of a government credit card that was not really a government credit card.

Calling those travel cards government credit cards is inaccurate. It is the individual's credit that is involved. It is the individual that pays whether or not the agency disbursing people ever pay them. It will count up to its credit limit against the individual's outstanding debt if the individual applies for personal loans.

My thinking was that if I bear all the responsibility I'd rather have it clearly on my shoulders and not confused by what might be called a sham. At least I never had to worry about pulling the government's AMEX out for a purchase that I should have used my own to make and becomming an offender. I wonder if some of the abuses might not be along those lines. It was worth my financing months long travel with my own card to avoid the messes. I was fortunate enough to be able to afford that clarity.

The thought came to me that the case being mentioned may be a sham too. If the government paid for all those personal things they had to be billed directly and it was not a travel card as I knew it.

I can see someone with the type of travel card where payments are billed to me and I voucher my expenses for reimbursement causing confusion. If I'm paying the bill why shouldn't I use it for something personal? I'm not going to submit a voucher for payment. Poor thinking, but not totally illogical either. I can't make sense of that story until I know which type card and more on circumstances.

By joel hoffman on Tuesday, March 19, 2002 - 01:58 pm:

"Months" to pay you after you submit a travel voucher???? What kind of system do you have? What agency do you work for???

You still would finance your travel with the Government VISA. You pay the bill, either way.

I usually am reimbursed within 2-5 days from electronic submission of my voucher. happy sails! joel

By anon224 on Tuesday, March 19, 2002 - 04:47 pm:

Joel, if your quesiton is for the last post I made the travel was months long, not after I submitted a voucher. That was only weeks at that agency. It was a type of traveling not known in most agencies. Some singles even arranged their lifesyle so that they had no bills due during their absence. The credit card complicated their life. The last agency I traveled with got electronic payment in with days. Of course I was only going on 2-3 day trips.

My point was that if I'm going to finance government travel either way I'd rather have it clear from questions. Nobody could challenge whether what I bought on my personal card was appropriate or not. When doing a voucher things allocated to travel were clear and personal things never showed. I could never make the GAO report by pulling out the wrong card. I doubt that is the cause of the widely reported case but it can happen.

Here is a question. The travel card holder is responsible for payment of all charges and liabilities of the card and only gets reimbursed on the basis of a voucher subject to examination and approval. If they charge a $200 ticket for travel and then $20 for drinks in a bar, pay the bill of $220 from the card company and vouchers $200 what is the problem? There certainly is if the bill goes to the agency, but is that standard for travel cards?

By joel hoffman on Wednesday, March 20, 2002 - 03:30 pm:

HA! GOOD RIDDANCE!!! "Bank of America Corporation ("Bank of America") has notified the Department of Defense (DoD) that effective 25 March 2002 it will stop providing government travel credit card service to the Department of the Army ("DA"). As a result, Army employees will be unable to use their government travel credit card for official travel expenses. Currently, D0D, DA, and USACE are working with GSA and Bank America to resolve this issue." Is this Government-wide? I quit using mine, last month. happy sails! Joel


Happy Sails! Joel

By Anonymous on Wednesday, March 20, 2002 - 11:35 pm:

Department of State uses CitiBank for travel cards and I haven't heard of any changes. However, due to substantial travel to third world countries that do not accept credit, we still have the advance pay option that was banned for most agencies.

By Kennedy How on Thursday, March 21, 2002 - 12:49 pm:

Anon224,

My point exactly. If the Govt got a kickback for the amount spent on the card, I'd think they'd be overjoyed if we spent more on it. That is, we are still responsible for the charges onto the card. Which means we don't pile up 12grand of bad debt.

The bill comes to me, I pay it all. I make phone calls on the hotel phone, these are not reimbursed. I pay that, since I use the Govt. card to pay for the room. Sometimes, we stay over a day or two, if it's the weekend. We pay that out of our own pockets; we tried to charge that to our personal card, the hotel said no. So, we charged a couple extra nights on the Govt card, we paid it out of our own pockets, we didn't claim it on the voucher. But, since this could be "personal expenses", we probably couldn't use the official card that way.

I can see where we should be held accountable for the debts we incur. I don't think that cardholders should be charging up a storm and writing it off as a bad debt, like those cited in the report. I can't understand why that woman got to walk without repaying that 12grand. But, do you think we'd even hear about it if she had incurred this over a year or two, and repaid every cent when the bills came due, on time?

Frankly, the only reason why there is such a big deal is the bad debt. Some auditor would probably question the "Dr. Jones, Cosmetic Surgery" charge, but if it wasn't a bad debt, the guy gets a talking to, but I would think that's probably the end of it. The banks want to make money, the more we charge, the more they make. I certainly don't think the bank is complaining, as long as the bill is paid, and not written off. And, more credit the Government gets, if that part is true. If so, I hope we refused credit on those "inappropriate" charges!

Joel, we heard about the cancellation, we've also been told that this has been postponed 60 days pending negotiations with GSA and DoD.

Kennedy

By joel hoffman on Thursday, March 21, 2002 - 01:21 pm:

Kennedy, yes, it has. My logistics chief told me at lunch that there was a piece on CNN or somewhere about it. It seems that theere are $62 million in unpaid balances to Bank of America, on personal cards.

Some "high level COE official" charged his wife's implants to either the Government's or his card - "he was allowed to retire." Some other person charged up about $12,000 at botiques, etc. She had already been cited by the GAO or someone for improper charges on the Government's card - no action taken. My loggy told me she was just promoted into a job in the Pentagon??????

The Government's problem is forcing a charge card with no payment terms other than full, timely payment on some people whom are incompetent and irresponsible with credit cards - then expecting everyone to be competent and responsible. Guess what - many people AREN'T. They can't pay bills on time and are in big debt or worse, Gov't employees being no exception to the rule! happy sails! joel

By Anon2U on Thursday, March 21, 2002 - 08:47 pm:

I have seen the Acronym "COE" several times - what does COE stand for?

By joel hoffman on Friday, March 22, 2002 - 06:37 am:

"Corps of Engineers" - sorry

happy sails! joel

By C M on Friday, March 22, 2002 - 09:34 am:

I THOUGHT IT WAS "CENTER OF EXCELLENCE"!!!

By Anonymous on Friday, March 22, 2002 - 09:56 am:

I think its "construct over everything."

By joel hoffman on Friday, March 22, 2002 - 10:13 am:

Center of Excellence fits very well, thank you!

happy sails! joel

By Anonymous on Friday, March 22, 2002 - 11:11 am:

Try to find Business 2.0 online edition and read the 101 dumbest business events and then remember someone in Congress wants us to exchange jobs with them!!!

By Kennedy How on Monday, March 25, 2002 - 12:18 pm:

Joel,

Yes, well, it appears that the $12-grand lady got promoted into a Dept of Army position within the Pentagon in charge of Cash accounting (or something like that). Can't remember exactly what the position was, but it was an accounting-type management position. Not sure of grade level.

The story I heard was that our agency had no basis to not hire her since her "Record was clean". In that her previous position didn't put the $12grand bad debt onto her record.

Funny, when I have to fill out the annual assets certification, it says I have to list any credit card debt over $10,000.00.....

Kennedy