How are vendors provided applicable clauses for purchases made with purchase cards that are within the threshold of the SAT? Are FAR clauses applicable to such purchases?

By formerfed on Thursday, August 23, 2001 - 08:22 am:

Good question. I spent a good bit of time going over this in my last job. The purchase card mechanism is designed only for micropurchases (under $2,500) where there aren't any clauses. In situations over $2,500, they are used as a means of payment but not solely as the means of ordering. In those situations, the card is used in conjunction with a purchase order, delivery order, BPA call, etc. where the ordering takes place through written or verbal means and the vendor gets paid with the card.

Then the practical situations arise. Let's say you have some remote site that requires procurement support. People there are trained in proper simplified accusation techniques. They compete everything over $2,500 and set actions aside for small business. They do procurements as well as the procurement office. So what do you do when they have a need for procurement. One option is have them submit requisitions and fax all their documentation to the procurement office where a PO gets issued much later. Another option is to give them limited CO warrant authority and have them complete a PO form and send to the vendor using the purchase card for payment. Another option (which many agencies do) is play dumb and let the site use the purchase card by itself, ignoring the clauses. After all, most purchases are for commercial, over-the-counter transactions where the performance period is a few minutes and the few commercial item clauses are essentially meaningless.

After much thought, I think the best approach is devising a PO template where relevant purchasing information is quickly entered and given to the vendor along with the Purchase Card for payment. The clauses are contained on it (even thought they rarely come into play). This adds a little more work, but you are compliant with the laws and regulations.

By CMERCY on Thursday, August 23, 2001 - 09:33 am:

FF
The Navy,I think in Puget Sound,has come up with a great solution to this problem....I do not have their website handy but a little browsing should find it.

By joel hoffman on Thursday, August 23, 2001 - 03:34 pm:

Another question - Can one combine the procedures for Part 13.303 Blanket Purchase Order method (where the vendors have a set of applicable Clauses and conditions) with the procedures for 13.301 Credit Card method for micro purchases? Or are the administrative procedures for ordering and payment too distinct to combine the methods? Happy Sails! joel hoffman

By roston on Friday, August 24, 2001 - 07:42 am:

It seems reasonable that if you establish a BPA up front, with all applicable terms and conditions -including the fact that payment would be made via credit card- then all individual calls up to $25k, could be placed verbally and paid via the credit card.

I can also accept that under such a BPA, individual calls could be placed up to $100k, again, provided all the terms/conditions and required procedures (CBD/EDI) are followed.

It might be wise to do a bi-lateral BPA in these situations.

On another point, I don't believe one needs to issue a hard copy PO if ordering under a GSA contract and paying via credit card. All the terms/conditions are spelled out in the GSA contract. I think oral ordering is typically okay, except if the order has many many line items or is somewhat complex.

am always interested in other viewpoints.

By Anonymous on Friday, August 24, 2001 - 07:44 am:

I think the procedure CMERCY is thinking of is
FISC Puget's on-line LOA (BPA) website at
http://www.puget.fisc.navy.mil/Contracting/LOA/index.htm
The background policy letter can be found at:
http://www.navsup.navy.mil/main/sap/sa00-02.pdf

The Navy places Letters of Agreement with SB's that include all the applicable part 12 clauses and cardholders place oral orders up to 25K and pay with the card.

By joel hoffman on Friday, August 24, 2001 - 08:28 am:

Thanks for the info, folks. I missed Formerfed's first answer to my question concerning making payment by credit card for BPA calls. While researching BPA's, I had previously noted that FAR prescribes single monthly invoicing for BPA calls. I suppose that procedure pre-dated rountine use of credit cards for calls within the individual card ordering limits. Since I don't review our office's credit card invoices, I am curious how funding is kept straight for mixed credit card purchases, but surely there are procedures for that. happy sails! joel

By formerfed on Friday, August 24, 2001 - 10:39 am:

Rostor,

You're exactly right. A PO is only required when an order is open market and over $2,500.

C Mercy and Anon,

The Navy/Puget Sound has a good idea. The only problem is that it likely includes just the most frequently used suppliers. I think the problem facing many activities with a large number of Purchase Card holders is they are widely dispersed and order from sources all over the place including the Internet. Someone once suggested posting terms and conditions for Purchase Card orders on the agency's web site and telling vendors that all orders contain these clauses, but that's a real stretch.

By Dave Barnett on Friday, August 24, 2001 - 12:59 pm:

For purchases over $2500 using the Gov't credit card, we issue an OF347 and in the block stating "mail invoice to", we state "Government Mastercard credit card". We haven't had any problems to date, and our departmental IG auditors were quite satisfied with our management of the credit card program at my office.