I. Introduction
With the ease of swiping a credit card, government employees can purchase supplies or services under an established dollar threshold without involving contracting personnel. In Fiscal Year (FY) 2021, purchase card spending eclipsed twenty-one billion dollars across seventeen million transactions. These frequently-used purchase cards remain an efficient way for government employees to make purchases under the micro-purchase threshold to satisfy various agency mission requirements without the need to undertake in onerous procurement processes. For that reason, the General Services Administration (GSA) estimates that using purchase cards saves the government approximately $1.7 billion annually in administrative costs. However, the purchase card program continues to be plagued with improper use, which has the potential to lead to fraud, waste, and abuse.
Although there have been several reforms to the government purchase card program since its inception, cardholders continue to make improper purchases at the expense of the U.S. taxpayer. Misuse of government purchase cards is often attributable to a lack of training or understanding of the program’s requirements. Government actors have an obligation to protect the public treasury and taxpayer dollars. However, Approving/Billing Officials (A/BOs) in the Department of Defense (DoD) are currently only required to review and approve cardholder purchases when approving the monthly statement, well after the purchase card has been swiped at the vendor. As billions of dollars are spent annually with purchase cards, this government program should strike a balance between efficiency, accountability, and transparency by requiring purchases to be reviewed and approved by an A/BO before a cardholder makes the purchase. This additional administrative step will allow the government to adjust its posture from reactive to proactive, which not only protects the participants in the program from the legal perils of improper use but effectuates public policy by ensuring that cardholders are buying from mandatory sources when required.
This Note first addresses the historical origins and status of the government purchase card program across the whole government, before focusing on the DoD’s purchase card policies and procedures specifically to illustrate the structure and practical implications of the program. The section that follows includes three hypothetical scenarios to illustrate potential contemporary issues with the program and suggests reasons why these issues happen. The Note concludes by proposing a method to reduce improper use of the government purchase card, an explanation of how to incorporate the requirement, and an example of a program to help alleviate issues that have pervaded the purchase card program since its inception.
II. Historical Overview of the Government Purchase Card Program: 1982 to Today
The government purchase card program was developed to streamline the small-dollar purchase of supplies and services while simultaneously reducing the administrative burden on contracting entities across the federal government by putting in place a usable purchasing method to simplify small-dollar purchases. However, widespread fraud, waste, and abuse of government purchase cards drove Congress to pass the Government Charge Card Abuse Prevention Act of 2012.
A. What Problem Was the Government Purchase Card Program Intendedto Solve?
Before the introduction of the government purchase card, the task of procuring small-dollar items, such as common tools or office supplies, was handled by the procurement office of the agency that required the supply or service. The process was slow and arduous, requiring every purchase to be funneled through a single office, leading to increased administrative burdens. Instead of focusing on major, large-dollar procurements, agency contracting professionals had to devote their time and effort making all the purchases for the agency. This administrative burden and time commitment on agency contracting professionals was a major factor that led the government to develop the purchase card program. In order to fix these issues, the government implemented the purchase card program to save time and reduce costs by allowing personnel outside of the contracting office to make purchases under the micro-purchase threshold. This new program would not only help focus the agency procurement office on larger and more complex purchases, but it would also reduce, by law, the competition procedures required for other purchases. With the swipe of a card, government employees at the user level could go out and buy small-dollar items needed to accomplish their agency’s mission without burdening contracting officers and their teams in the agency procurement office.
B. Creation and Implementation of the Government Purchase Card Program
During the 1980s, the U.S. government began devising ways to reduce administrative burdens related to small-dollar purchases. This started in 1982, with the Reagan administration’s issuance of Executive Order (EO) 12352, which specifically directed executive agencies to “[e]stablish programs to reduce administrative costs and other burdens which the procurement function imposes on the Federal Government and the private sector.” Following the EO, several agencies participated in the Department of Commerce’s pilot program, which evaluated the feasibility of allowing non-procurement personnel to acquire goods and services with commercial credit cards. The success of the pilot program led the Office of Management and Budget (OMB) to request the GSA to manage and expand the availability of government purchases cards throughout the executive agencies.
However, the expected widespread use of the GSA’s purchase card program failed to materialize. This lack of expansion led the Clinton administration to establish the National Performance Review (NPR) in 1993 to conduct a six-month review of government procedures and identify ways to improve efficiency and implement cost-savings throughout government operations. The NPR published a separate procurement-specific report where it estimated that the government would realize annual savings of $180 million in administrative costs if the purchase card was used in half of the simplified acquisitions going forward. In the same report, the NPR recommended that the Federal Acquisition Regulation (FAR) be amended to promote the use of government credit cards to make small-dollar purchases.
The NPR recommendations sparked reform efforts in both the legislative and executive branches. Congress wasted no time by implementing, within a year of the review, several of the NPR’s purchase card program recommendations by passing the Federal Acquisition Streamlining Act (FASA). Among other things, FASA established and set the micro-purchase threshold at $2,500. If the cardholder views the purchase as reasonable and under the established threshold, the purchase card allowed them to skip the lengthy competition requirements and acquire the needed supply or service immediately with the swipe of a credit card. Ultimately, these streamlined methods lowered the administrative burdens on procurement officials that were associated with acquiring small-dollar goods and services, allowing them to focus their efforts on more complex contracts.
The Clinton administration followed Congress’s lead by issuing EO 12931 in 1994 to implement the NPR’s recommendations. The EO required agencies to increase use of government purchase cards and to delegate the micro-purchase authority down to the end-user level, allowing the personnel needing the supplies or services to use the purchase card to quickly and efficiently make the purchase instead of waiting for the contracting activity to procure the requirement. Also in 1994, the FAR Council amended the FAR to establish the purchase card as the preferred method for micro-purchases.
Agency compliance with these reforms led to a proliferation of government purchase card use between FY 1993 and 2011. The amount of money spent with government purchase cards increased from $527 million in 1993 to $19.5 billion in 2011. The flexibility of the purchase card allowed (and continues to allow) cardholders to purchase necessary, mission-essential supplies and services rapidly and effectively from a vendor with the swipe of a credit card.
C. Fraud, Waste, and Abuse and the Government Charge Card Abuse Prevention Act of 2012 and Beyond
During the early years of the federal government’s use of the purchase card program, there were few controls placed over purchases made by cardholders. The ease and convenience of making micro-purchases with a government credit card, combined with the lack of adequate controls over the program, led to widespread fraud, waste, and abuse of taxpayer dollars. The government responded to these issues throughout the 2000s and early 2010s by initiating audits of purchase card programs conducted by the General Accounting Office (GAO) and agency inspectors general (IGs) across the executive branch.
These audits identified several cases where cardholders wasted taxpayer dollars by severely abusing the government purchase card. Government purchasers were using their cards to purchase personal items, such as jewelry and clothing. This abuse was compounded by agency inability to properly document and account for cardholder purchases. Audits showed that government purchase cards were used without being properly accounted for in agency property books and many items went missing.
The audits also identified that cardholders were not making purchases from statutorily-mandated sources of supplies and services. Instead of buying supplies or services from Federal Prison Industries, Inc. (FPI) or AbilityOne, cardholders were buying from commercial sources, including high-end commercial sources.
Auditors also identified that cardholders were “splitting” purchases to get around the micro-purchase threshold. A split purchase occurs when a requirement is separated into smaller purchases to keep the transactions under the micro-purchase threshold or circumvent formal contracting and competition requirements. This practice violates the FAR and is considered an unauthorized purchase because the entire requirement exceeds the cardholder’s authorized limit.
Congress reacted to these issues by passing the Government Charge Card Abuse Prevention Act of 2012 to place internal controls and reporting requirements regarding the government purchase card program. The Act implemented different provisions for civilian agencies and the DoD, but each functionally shares the same requirements. The Act requires that “[t]he executive agency uses effective systems, techniques, and technologies to prevent or identify illegal, improper, or erroneous purchases.” The Act specifically requires cardholders to reconcile the purchases on their card statements with receipts and supporting documentation. It also requires that those involved in the purchase card program be appropriately trained on how to properly use the purchase card. Additionally, the Act requires the agency IG to assess its agency’s purchase card program to “identify and analyze risks of illegal, improper, or erroneous purchases” to establish “the scope, frequency, and number of periodic audits.” The IG is also required to audit purchase card transactions as needed.
Since the implementation of the Government Charge Card Abuse Prevention Act, the GAO and the Council of the Inspectors General on Integrity and Efficiency (CIGIE) issued separate reports assessing agency compliance with the Act. The CIGIE report was a compilation of FY 2017 purchase data audits from twenty agency IG reports. The IGs sampled 1255 “high risk” transactions and issued and sent reports to CIGIE. 501 of these transactions did not comply with government purchase card policies. These IG reports did not find evidence of fraudulent behavior, but they did identify:
[W]eaknesses in certain areas—such as policy, monitoring, and training—that reduced program efficiency and increased the risk of unauthorized purchases on Government purchase cards. The [Office of Inspectors General] found that agencies’ cardholders need additional training in properly using their cards; agencies need to develop additional policies and procedures for the cards; and approving officials need to better review transactions.
The policy, monitoring, and training issues identified in the CIGIE report persist to this day.
III. The DoD’s Government Purchase Card Program
Understanding the regulatory background behind the establishment and implementation of the DoD’s government purchase card program is critical to analyzing the program and identifying ways to improve it. As the following sections will demonstrate, the FAR, Defense Acquisition Regulation Supplement (DFARS), Appendix B of OMB Circular A-123, and the establish, operate, and oversee the government purchase card program in the DoD.
A. Requirements of the FAR and DFARS
The FAR only provides general guidance on the rules and requirements of the government purchase card program. As discussed earlier, the FAR establishes a preference for purchases made under the micro-purchase threshold to be made with the government purchase card. One might expect to find detailed guidance on the government purchase card program at FAR 13.301, but they would be disappointed to find that the FAR only touches on the program at a macro level. This FAR subpart authorizes contracting officers and cardholders authorized by FAR 1.603-3 to use the government purchase card to buy supplies, services, and construction. The FAR then requires agencies using government purchase cards to “establish procedures for use and control of the card.” The only other guidance the FAR provides agencies in using the purchase card program is that the cards should not be limited to micro-purchases, but should be used to “[p]lace a task or delivery order” when authorized and to pay for contracts where the contractor agrees to accept the purchase card as payment. The FAR provides a regulatory framework for the government purchase card but passes the intricacies of establishing, operating, and overseeing the program to each individual agency.
The DFARS does not provide much more guidance than the FAR to demystify the rules regarding the government purchase card program. DFARS 213.301 instructs the reader to “[f]ollow the procedures at PGI [(Procedures, Guidance, and Information)] 213.301 for authorizing, establishing, and operating a Governmentwide commercial purchase card program.” Despite the preceding guidance, neither DFARS 213.301 nor DFARS PGI 213.301 provide any guidance on how to establish or manage a government purchase card program. Both regulations direct those looking for specific guidance on the government purchase card program to the “Department of Defense Government Charge Card Guidebook for Establishing and Managing Purchase, Travel, and Fuel Card Programs.” While the DFARS and DFARS PGI do not provide any guidance on how to establish, operate, or oversee the government purchase card program, they both legitimize the Government Charge Card Guidebook as the primary purchase card authority within the DoD.
B. Requirements of Appendix B of OMB Circular A-123
While the FAR and DFARS provide general guidelines regarding the government purchase card program, the Government Charge Card Abuse Prevention Act of 2012 required the OMB to provide guidance on implementation of the Act’s requirements. The OMB issued that guidance within Appendix B of the OMB Circular No. A-123. The purpose of Appendix B is to establish baseline requirements for all executive agency government purchase card programs. Before becoming a stakeholder in the purchase card program, personnel must complete all required training which currently consists of one online course that teaches a general overview of roles and responsibilities. The cardholder must reconcile their purchases with the monthly statement, and the approving official must approve those transactions no later than thirty days after the billing cycle ends. These guidelines require the agency to develop a Charge Card Management Program to properly implement the guidance in Appendix B and update the program within a year of any changes in the law or every two years unless needed based on findings from an IG report. Appendix B also requires that purchases made with the purchase card are not charged state sales tax. The guidance continues by requiring the agency to identify purchases as government property and properly account for them by using agency procedures.
Appendix B recommends some best practices regarding the type of documentation that should accompany a purchase. For example, it recommends that cardholders should document purchases if their agency procedures do not require written requests or pre-approval of purchases. Appendix B continues by stating that policy should require approval prior to purchase when a cardholder makes a purchase without a request.
C. Requirements of the DoD Government Charge Card Guidebook
The DoD Government Charge Card Guidebook satisfies the Charge Card Management Program requirement from Appendix B. The policies and procedures set forth are used by contracting activities within the DoD to establish and maintain their specific government purchase card programs. One of these critical management controls is a requirement to review all billing accounts and their associated cards at least once a year. The Guidebook requires personnel involved in the purchase program to complete one online course, “CLG 0010: DoD Governmentwide Commercial Purchase Card Overview,” developed by the Defense Acquisition University. It describes the different prohibited purchases that cardholders are unauthorized to purchase. The Guidebook also defines the roles and responsibilities of the different stakeholders within the government purchase card program. The Army, Air Force, and Navy each have their own policies and procedures in accordance with the DoD Guidebook. There are three major stakeholders in the government purchase card program: the Agency/Organization Program Coordinator (A/OPC), the A/BO, and the cardholder.
The A/OPC possesses overall responsibility for managing the purchase card program. In the author’s experience, an A/OPC generally works in the installation contracting command and is responsible for establishing cardholder and billing accounts for the installation. The A/OPC is also responsible for establishing and maintaining the training required for the program. Other potential A/OPC duties include conducting compliance reviews and monitoring transactions of their established billing accounts, although these are not mandatory responsibilities set forth in the Guidebook.
Next, the A/BO must ensure that all the cardholder transactions within their billing account are “legal, proper, mission essential, and correct in accordance with Government rules and regulations.” The A/BO is generally responsible for several cardholders and must approve and review their statements and reconcile them when the cardholder fails to do so. However, A/BOs are only required to review cardholder statements at the end of the billing cycle, not before a purchase is made.
Cardholders are the personnel that swipe the government purchase cards and acquire the supplies or services necessary to meet agency mission requirements. Micro-purchase authority is delegated to cardholders in writing, allowing them to spend appropriated funds with their purchase cards. This responsibility is not to be taken lightly, as these personnel are entrusted with “acting on behalf of the American taxpayer.” Cardholders are required to make sure that all their purchases are “proper, legal, and reasonable, and satisfy a bona fide need.” Cardholders must maintain files and records and obtain supporting documentation, such as receipts, as required by their program guidance.
IV. Illustrative Hypothetical Scenarios
Despite the successes of the Government Charge Card Abuse Prevention Act of 2012, there are still several issues that permeate the DoD’s government purchase card program. This Note will demonstrate these issues by using hypothetical scenarios to show the ease in which these situations can occur during daily operation. The setting for these hypotheticals is a Continental United States (CONUS) installation belonging to any of the service branches within the DoD. For comparative ease, Army unit and rank structure will be used. The service branch’s government purchase card program implements and complies with the guidance set forth in Appendix B of OMB Circular A-123 and the DoD Government Charge Card Guidebook for Establishing and Managing Purchase, Travel and Fuel Card Programs with no significant deviations. All of the personnel involved in government purchase card program have been properly trained in accordance with the above guidelines and guidebook. Three hypothetical scenarios follow with commentary on the issues presented in each scenario.
A. Hypothetical Scenario One: The Cardholder’s Rater Directs a Prohibited Purchase
This scenario begins the same way all government purchase card purchases do, with the realization that the mission requires a purchase. Here, the mission happens to be the execution of the unit’s military ball. The venue is reserved at a banquet hall in a downtown hotel located in the closest city to the installation. Based on the price of the venue rental, the unit logistics officer (also the action officer assigned to plan the event) proposes a ticket price of $30 each for the enlisted personnel and $50 each for the officers. The unit commander approves the proposed ticket price, and the ticket information is disseminated to the entire unit.
Unfortunately, due to poor planning, the cost of individual meals is not included in the price for the venue rental. To cover all the expenses from the rental and the meals, the updated ticket prices would need to be increased to $50 per enlisted ticket and $70 per officer ticket, for a total of $11,000. The unit commander, understandably upset at this turn of events, tells the logistics officer that they are not going to increase the prices of the tickets and to find a way to fund the meals.
Luckily for the logistics officer, the unit’s cardholder is rated by the logistics officer because the cardholder is a direct subordinate. Embarrassed and desperate to fix the situation (because the unit commander is the logistics officer’s senior rater), the logistics officer tells the cardholder to use the government purchase card to pay for the meals. The cardholder hesitantly makes two transactions to pay for the meals, despite vaguely remembering food being on the prohibited purchases list from purchase card training, because the cardholder’s evaluation is due next month, and the cardholder is afraid that delaying or questioning the food purchase will have a negative impact on the upcoming evaluation.
There are multiple problems raised in this scenario. The first major issue is that the cardholder committed a split purchase when they made two transactions to pay for the meals. The purchase exceeds the $10,000 micro-purchase threshold and the cardholder could only pay the full amount by making two transactions. Not only was the purchase split, but it was made for a prohibited purchase. This scenario implicates inadequate training based on the cardholder not quite remembering whether food is a prohibited purchase. But underlying the entire scenario is the pressure that superior officers can exert over cardholders. These personnel may not be familiar with every nuance of the rules and regulations of the government purchase card program. The program places the responsibility on the cardholder to inform their superiors that a purchase is unauthorized. In this situation, instead of falling victim to pressure from a superior, the cardholder should have reviewed the installation purchase card policy or consulted with their A/BO to ensure compliance with that policy.
B. Hypothetical Scenario Two: Commercial Products from Non-Mandatory Sources
This scenario involves a situation where a cardholder makes several purchases that are either available at AbilityOne or through the military supply system. A unit is preparing for a change of command at the company level. As a part of the preparation, there will be a change of command inventory, where all the property belonging to the unit must be inventoried to determine whether any components or sub-components are missing. During pre-inventories, a hammer is identified as missing. The unit asks the government purchase card holder if they can buy them a hammer as a replacement. The cardholder agrees and goes to Home Depot to purchase a new hammer to replace the missing hammer.
As a part of the change of command inventories, the outgoing unit commander wants to simultaneously clean the motorpool while inspecting the equipment. The commander tells their supply personnel that the unit needs one hundred garbage bags and ten reams of copy paper in preparation for the motorpool cleanup and change of command inventories. The supply personnel go to the same cardholder and submit a purchase card request for the garbage bags and reams of paper. The cardholder makes the purchases at the local Walmart.
At the end of the billing cycle, the A/BO sees these purchases and calls the cardholder to ask for bona fide need justification for the hammer, the garbage bags, and the copy paper. The A/BO then asks if the cardholder looked for the supplies in the supply system or from an AbilityOne vendor before making the purchase at Home Depot and Walmart. The cardholder says that the outgoing commander does not want to have a financial liability investigation of property loss (FLIPL) and that the supplies were needed quickly and other methods would have taken too long. The A/BO, not wanting to cause trouble for themselves and the cardholder, approves and certifies the purchases.
This scenario highlights several issues that happen while using government purchase cards. First, it identifies the mission essential or bona fide need requirement that cardholders must adhere to. In this scenario, there was not an urgent or compelling need to purchase these supplies with the government purchase card. The cardholder should have ordered the supplies through the military supply system or purchased them from an AbilityOne retailer but decided instead to purchase the items from two large box stores. The other problem this hypothetical presents is the efficiency lost when A/BO’s are only required to review purchases at the end of the billing cycle. Here, the A/BO was put in an uncomfortable situation when determining that the purchases were not mission-essential, creating an ethical dilemma on whether to authorize the purchase or dispute it as unauthorized.
C. Hypothetical Scenario Three: A/BO Fails to Properly Review Purchases
This scenario involves a situation where the A/BO does not properly execute their duties within the government purchase card program. The A/BO is responsible for reviewing and certifying each of their seven cardholder’s purchases monthly by comparing each cardholder’s bank statements with the purchase receipts. One of the billing accounts on the installation recently replaced their A/BO because the previous A/BO was assigned to a new duty station. The billing account and A/BO reside in the logistics section of a brigade combat team-sized unit with one of the seven government purchase cards assigned to each of the seven subordinate battalion-sized units.
Although the new A/BO completed the mandatory online training for their new position, the A/BO is overwhelmed by all the rules and regulations surrounding the government purchase card program. The A/BO is a junior officer that is new to the military, and their role as A/BO is an additional duty. Because the A/BO is trying to figure out how to do their main job, understanding the requirements and ramifications of violating the government purchase card program is troubling them. The A/BO understands how to certify purchases but does not grasp how to carefully review purchases at the end of the billing cycle. Without matching the purchases to requests and receipts, the A/BO certifies their cardholder’s statements, missing questionable purchases and failing to highlight discrepancies.
At the end of the year, the A/OPC audits the A/BO’s billing account. There are numerous questionable purchases on several of the A/BO’s cardholder accounts. When asked to see documentation for these questionable purchases, the A/BO admits that there is no available documenation. The A/OPC suspends the billing account and submits a report to the installation IG to investigate the billing account for any fraud, waste, and abuse.
This scenario demonstrates a general lack of training and understanding of the policies and procedures of the government purchase card program. The A/BO completed the mandatory training but was unsure how to properly review and certify cardholder statements at the end of the billing cycle. The A/BO should have gone to the A/OPC to clarify roles and responsibilities and develop a better understanding for the requirements of the government purchase card program. Receiving this guidance and on-the-job training would have helped the A/BO better understand how to manange their cardholder accounts and ensure that cardholders comply with the program’s requirements.
V. A Solution to Reduce Improper Purchasing Practices
Improper use of the government purchase card is still happening today. There are simple changes that the DoD can make to reduce the number of improper purchases that presently occur across the service components. First and foremost, the DoD should institute a requirement that all purchases must be approved by an A/BO before the purchase is made. Second, the DoD should direct the service components to develop an in-person course to teach A/BOs how to properly approve and manage their billing accounts.
These recommendations can be incorporated into law or policy in several different ways. The first way would be for Congress to include the updated requirements in the annual NDAA. Including the requirements into the NDAA would eventually require the DFARS to be updated to reflect the changed requirements from the NDAA. Another way to implement these changes is through presidential issuance of an EO. An EO would either instruct the executive agencies to enact the requirements or instruct OMB to issue guidance on how to change the government purchase card program. Finally, the most practical and immediate way to effectuate this change across the DoD would be for DoD leadership to amend its Government Charge Card Guidebook by adding the requirements as new DoD policy.
A. Require A/BOs to Pre-approve Purchases
The DoD Guidebook only requires A/BOs to review and certify cardholder purchases at the end of each billing cycle. Requiring that A/BO’s approve each transaction before the cardholder makes a purchase should reduce the number of improper purchases throughout the program. A/BOs provide a level of objectivity, based on generally being removed from the cardholder’s chain of command, that would allow them to identify and reject more improper purchases. Objective freedom allows A/BOs to proactively identify improper purchase attempts and subsequently provides the A/BO an opportunity to conduct corrective training for cardholders to learn how to make proper purchases and improve the institutional knowledge within the government purchase card program.
The hallmark of the government purchase card program has been the efficiency gained by reducing the administrative burdens associated with making small-dollar purchases. Government procurement policy has several procurement objectives: “(1) competition; (2) integrity; (3) transparency; (4) efficiency; (5) customer satisfaction; (6) best value; (7) wealth distribution; (8) risk avoidance; and (9) uniformity.” Although IG audits have already provided some reform to increase transparency of the program, the purchase card continues to value efficiency over integrity. The program requires proper supervisory review of cardholder purchases to maintain the level of integrity expected of government officials spending taxpayer dollars. A/BO pre-approvals provide an extra layer of checks on improper purchases before the cardholder can make the purchase. This additional step in the purchasing process increases the purchase card program’s integrity in exchange for only a small amount of the program’s efficiency.
Adding a requirement for A/BOs to pre-approve purchases is consistent with the goal of eliminating administrative burdens in the purchase card program. Addressing improper or erroneous purchases after the fact can be more time-consuming and account for additional administrative burdens on end-users in the form of A/OPC audits and IG investigations. The instances of improper purchases will likely decrease when a culture of accountability and teamwork is developed across the entire billing account based on a required A/BO pre-approval process for cardholder purchases.
To further prevent undue delays in using the purchase card for mission requirements, the DoD should develop an exemption process to the proposed pre-approval requirement. This exemption would be for requirements that need to be purchased immediately when the A/BO is unable to be contacted within a reasonable time for pre-approval. In these instances, a person with command authority would be allowed to sign a memorandum stating the bona fide need for the supply and services and the urgency of the purchase. These signed memoranda would need to be sent to the A/BO as soon as practicable to ensure that the A/BO retains proper documentation throughout the billing account. These exemptions would be the exception and not the rule and would allow the government purchase card program to maximize its efficiency while maintaining an adequate level of review to increase the integrity of the program.
B. Bring Practical Training to the Purchase Card Program Participants
One of the most glaring issues facing the government purchase card program is a lack of adequate, thorough, government purchase card program training that provides participants enough information to fully understand the requirements of the program. Currently, the DoD only requires completion of one online training course before joining the program. Some programs also require new members of the purchase card program to attend a one or two day in-person class run by the A/OPC at the installation contracting command. Even with the in-person training, many cardholders still do not understand the requirements and the processes necessary to avoid violating the rules of the government purchase card program. By not providing a basic understanding of purchasing policies and program restrictions, these minimal training requirements can lead cardholders to make errors while actually using the card in practice.
To close this gap, the DoD should direct and fund each service component to develop a one-week course dedicated to the proper use of the government purchase card and proper management of the program. In conjunction with the annual online refresher course, this course would be geared towards A/BOs and would assist them in understanding what purchases are unauthorized and how to properly document their cardholder’s purchases. This course would be executed best by use of Mobile Training Teams (MTTs) that would travel to installations to bring the training to the end-user instead of relying on the initiative of the unit to send the A/BOs on Temporary Duty Assignment (TDY) to a central training location.
It is naïve to believe that all A/BOs will be able to attend the MTT before starting their duties as an A/BO. In these cases, the DoD should implement a requirement for A/OPCs to conduct a monthly review of billing accounts that do not yet have an A/BO trained by the MTT. This review will be a small sample of purchases to ensure that the A/BO is reviewing requests before the cardholder makes a purchase and is requiring proper documentation from their cardholders to prevent improper purchases. This process allows the A/OPC to be more involved in the program outside of their required annual audit function and also gives them an opportunity to provide on the job training to A/BOs and cardholders. In addition to an increased audit requirement by the A/OPC for untrained A/BOs, the DoD should institute a “Three Strike” rule when an A/OPC identifies an improper purchase. Since the A/OPC usually works at the installation contracting activity, they have the authority to suspend billing accounts during their required management of the billing account. Allowing untrained A/BOs and cardholders to make mistakes gives the A/OPC the opportunity to provide on-the-job training before taking away an important means to acquire supplies and services by suspending the account after the first error. After the first and second instance of improper purchase practices (ex. unauthorized purchases, undocumented purchases, lack of A/BO approval), a third violation would grant the A/OPC the discretion to either suspend all the A/BO’s cardholder accounts or just the specific cardholder’s account for a specified amount of time.
VI. The Future of the Government Purchase Card Program
The information discussed above is a cautionary look at the past and future of the government purchase card program. Congress and the GSA have recently been trying to expedite the process in which the government acquires commercial products and commercial services. In the FY 2018 NDAA, Congress directed the GSA to assess the viability of an electronic commercial platform. GSA chose to pursue existing commercial marketplaces, such as Amazon, based on the idea that purchasers are familiar with how to use them through their own personal experience. Although Congress allowed purchases up to the simplified acquisition threshold in the NDAA, GSA decided to restrict purchases to the micro-purchase threshold. GSA has even recommended that the micro-purchase threshold be increased for any purchase on a GSA approved e-commerce platform.
These GSA e-commerce initiatives will undoubtedly make purchasing easier and more efficient. But recall the beginning of the government purchase card program. Increased ease and efficiency of e-commerce has the potential to replicate the issues of improper use throughout the history of the purchase card program. GSA will have to be very careful in the types of commercial products and commercial services for sale on their e-commerce platforms. As demonstrated in one of the earlier hypotheticals, the ease of purchasing commercial products from box stores and now emerging e-commerce platforms may lead cardholders to continue to circumvent purchasing from mandatory sources, like AbilityOne.
These government purchase card program issues are amplified when considering the ease in which cardholders will be able to make purchases on an e-commerce platform. This bolsters the argument that A/BOs should be required to approve all cardholder purchases before the purchase is made to ensure that cardholders are not abusing the e-commerce platform. Cardholders, without proper training and supervision, will only have more access to improperly use the purchase card with the emergence of an e-commerce platform.
VII. Conclusion
The government purchase card program continues to have issues with training and supervision. Unauthorized and unnecessary purchases made with government purchase cards waste taxpayer dollars. The DoD can reduce the risk of improper purchases by requiring A/BOs to approve their cardholders purchases prior to swiping the card. The DoD can also ensure that its government purchase card personnel are properly trained by designing a training program that provides practical experience and instruction on how to manage a purchase card program. These simple policy changes have the potential to reduce improper use of purchase cards while only adding a minimal administrative burden on the government purchase card participants.
