Jun 7, 2018

By Wayne Simpson, CFCM, CSCM

House Moves to Prevent Abuse and Misuse of SmartPay Program’s Largest User

On May 21, 2018, after 40 minutes of floor debate, the U.S. House of Representatives considered under the suspension of the rules, and passed H.R. 5215, the “Veterans Affairs Purchase Card Misuse Mitigation Act” by voice vote.  The bill was sent to the Senate May 22, 2018, for consideration.

H.R. 5215 amends Title 38 of the United States Code to direct the Secretary of Veterans Affairs to prohibit U.S. Department of Veterans Affairs (VA) personnel found to have knowingly misused VA purchase cards from serving as purchase card holders or purchase card approving officials.  This prohibition is in addition to any other applicable penalties.

For purposes of the Act, “misuse” means (1) splitting purchases; (2) exceeding applicable purchase card limits or purchase thresholds; (3) purchasing an unauthorized item; (4) using a purchase card without being an authorized purchase card holder; or (5) violating ethics standards.

Purchase card spending will undoubtedly increase in the current and subsequent fiscal years due to recent changes in Federal law.  On March 22, 2018, VA issued a Class Deviation to the Federal Acquisition Regulation (FAR) implementing and increasing the new micro-purchase threshold (MPT) and the new simplified acquisition threshold (SAT) effective immediately.  The MPT increased from $3,5001 to $10,000 for products, while the SAT increased from $150,000 to $250,000.  MPT and SAT increases were authorized by Sections 805 and 806 of the National Defense Authorization Act (Public Law 115-91) signed by President Trump December 12, 2017.

In Fiscal Year 2017, the most recent data available for the 24 Federal departments and agencies covered by the Chief Financial Officers Act2, VA was the largest user of the General Services Administration (GSA) SmartPay3 (Governmentwide purchase card) Program, in terms of total transactions and total dollars spent, even outspending the Department of Defense and its independent agencies.

VA spent over $14.2 Billion using SmartPay in 7,385,210 transactions (665,395 with VA’s Prime Vendor Programs, and 6,719,815 with ordinary vendors).  VA accounts for a significant portion of the total SmartPay purchasing spend of the 24 CFO Act departments and agencies for Fiscal Year 2017.  The total spend/transactions of the 24 CFO Act departments and agencies totaled $18.114 Billion, with 18,549,144 transactions.  VA’s SmartPay spend accounts for approximately 39.7% of all SmartPay Transactions and approximately 56.5% of total SmartPay dollars for the 24 CFO Act departments and agencies.

 

   VA Use of SmartPay Fiscal Year 20174

 

NUMBERED NOTES

1The micro-purchase threshold remains at $2,500 for services; $2,000 for construction; and there are higher thresholds for certain other acquisitions in support of peacekeeping missions and disaster recovery when authorized by agency heads.
2Chief Financial Officers Act of 1990, Public Law 101-576
3The GSA SmartPay Program is the world’s largest government charge card and commercial payment solutions program, providing services to more than 560 Federal agencies, organizations, and Native American tribal governments. GSA SmartPay payment solutions enable authorized government employees to make purchases on behalf of the Federal Government in support of their agency/organization’s mission. Administrative savings using SmartPay are estimated at $1.7 Billion annually, with Federal agencies earning over $3 Billion in rebates using the Program.
4Source: Federal Procurement Data System-Next Generation (FPDS-NG)

 

About the Author:

Wayne Simpson
Consultant
Wayne Simpson is retired from the U.S. Department of Veterans Affairs (VA) after 38 years of federal service. He served as the Executive Assistant to VA’s Deputy Assistant Secretary for Acquisition and Logistics where he was the primary staff advisor to the Deputy Assistant Secretary, who serves concurrently as VA’s Senior Procurement Executive and Debarring Official.

 

 

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