Fantastic Plastic

irefighters at the Bureau of Land Management brought an unlikely weapon into battle against the wildfires that raged across Western states last summer: the Interior Department's integrated MasterCard. The card-used for travel, fleet and purchase expenses-gave fire crews quick access to supplies and lodging, according to Debbie Tuchek, a purchasing agent in BLM's Lewistown, Mont., office. "We needed the capacity to pay vendors immediately so they could provide us with more supplies," she says. "The faster the vendors can respond, the faster the fire gets put out." For Interior employees who work in remote rural areas, the integrated charge card and its accompanying convenience checks, which can be used to pay mom-and-pop vendors who don't accept plastic, seem heaven-sent. "[The card] helped our maintenance program get done a whole lot faster," says John Fleharty, who drives hundreds of miles across northern Montana to maintain BLM campgrounds. Before the card was rolled out, Fleharty had to fill out a purchase order and get approval from Tuchek back in Lewistown before buying a spare part, a process that could take an hour or more. Now, he just buys the parts he needs in the closest town. The card has been a hit with most Interior employees since its debut in November 1998. Carried by 54,700 of the department's 66,000 employees, the card allows all purchase and fleet transactions to be centrally billed to the department, reducing employees' need for reimbursement. At the Bureau of Reclamation, the employees' union demanded that central billing be extended to all routine travel expenses paid for with the card, including hotel, car rental and even parking. Reclamation employees need only be reimbursed for food and incidental expenses after a trip. So far, Reclamation is the only Interior agency to use central billing for purchases, fleet and travel expenses. Central billing allows Interior to pay quickly, earning the department more than $9 million in rebates from its card vendor, Bank of America, since December 1998. Because federal agencies usually are exempt from state taxes, the billing technique also has saved Interior millions in state levies. Like all purchase cards, the integrated card frees procurement officers to focus on more sophisticated acquisitions, a significant benefit since Interior's acquisition workforce shrunk by 25 percent in the mid-1990s. By folding purchase, travel and fleet expenses into one card, the Interior procurement shop can track agency spending in three major areas. Armed with this data, Interior can demonstrate its purchasing power to win better deals from vendors. In light of these advantages, it's easy to see why the Commerce, Housing and Urban Development and Defense departments are studying Interior's integrated card. All agencies have had the option to integrate since February 1998, when the General Services Administration's Federal Supply Service awarded a new 10-year purchase card contract to five banks, including Bank of America. Most never tried, in part because pooling the three areas requires a redesign of accounting and billing systems. "Anybody could combine cards, but they had to change their whole process to make this thing work," says Kenneth Oscar, acting assistant secretary of the Army and a judge for the Business Solutions in the Public Interest Awards. "Every single agency was doing business one way, and [Interior] was able to break out of that mold and come up with a new way of doing things." But in November 1997, when Interior officials first met to discuss the features they wanted under the new purchase card contract, no one suggested combining the three cards, according to Debra Sonderman, director of the department's office of acquisition and property management. The idea came from agency cardholders, who, in a survey conducted by Sonderman's group, made clear that they wanted to carry fewer cards. Cardholders also said Interior often was late in reimbursing them for travel and fleet expenses, making it difficult for them to pay their bills on time. For these reasons-and the potential savings from rebates and exemptions from state taxes-Interior decided to integrate its cards and use central billing where possible. After meeting with Bank of America officials, Interior committed to the integrated card in June 1998. The card's requirements placed unique burdens on the accounting and billing systems of both organizations. For example, Interior wanted to implement central billing for purchases and fleet expenses, but retain individual billing on most travel expenses. Interior also needed daily invoices from the bank so it could pay bills early and be eligible for rebates. To provide these features, Bank of America had to design a new system, the Electronic Access Government Ledger System (EAGLS). "We thought we were buying a fairly standard commercial service, and it turned out that we were involved in a systems development project," says Sonderman. While EAGLS was ready for the card's launch in late November 1998, the system still had some bugs. It sometimes routed bills to the wrong bureau within Interior and wasn't able to send invoices to the department until January, according to Sonderman and John Stabler, project manager for bank cards system support with Interior's National Business Center in Denver. The kinks were ironed out by early 1999, and EAGLS started providing daily invoices and allowing cardholders and their finance offices to ensure that bills are going to the right funding category. Through its diversion accounts feature, EAGLS allows Interior to centrally bill some expenses and use individual billing for others. EAGLS is linked to Interior's main accounting system through an interface designed by Stabler. Bank of America designed EAGLS to match up with this single accounting system, which handles 98 percent of all nonpayroll financial transactions at Interior. For departments with multiple accounting systems-the Defense Department has 35-aligning them with a bank's system could take more work, according to Sonderman and Stabler. "That's the big advantage [Interior] had-we were already on [a single] accounting system," Stabler says. "It made sense to do [the card program] at the department level, so it wouldn't have to be repeated at every bureau." Beyond integrating systems, Interior had to replace the numerous methods used for handling fleet, travel and purchase card expenses across the department with a single process based on EAGLS. The department also had to decide which expenses to bill centrally, a sensitive question since the government is wary of being charged for things it shouldn't pay for, such as movies or room service. Interior took a risk-based approach to central billing, according to Sonderman. If employees charge the department for unauthorized expenses, they can have their credit limits cut or lose card privileges altogether. At the Bureau of Reclamation, where employees have centrally billed most travel expenses since the program's launch, officials developed procedures to keep things aboveboard. Reclamation employees use the integrated card to pay for lodging, but must use cash or a personal credit card if they want to watch a video or get room service. To make sure employees aren't abusing their card privileges, the bureau created new disciplinary measures for late payments, says Sonderman. Departmentwide, reviewing officials use EAGLS to check and certify employees' accounts every six months. The Bureau of Reclamation pilot has been a slam-dunk, according to Sonderman. "Reclamation has done a fabulous job of implementing this program," she says. "Their delinquency rate [on payments] has been below 1 percent throughout." Despite the success of central billing for travel at Reclamation, Sonderman and others have put off extending the practice across the department, in part to develop a single method for managing travel throughout Interior, she says. By next year, Sonderman hopes a few more bureaus will bill centrally for travel expenses. As the integrated card program matures, Sonderman's core group of 15 to 20 people representing Interior bureaus and program areas continues to meet every month. Having employees from accounting, procurement, property, and budget at the same table helped Interior devise a card that works for everyone, says Sonderman. "You have to work horizontally across the organization," she says. "You can't just work in traditional administrative stovepipes." The partnership between Interior's accounting and procurement shops has been crucial to the program's success, adds Sonderman. "The collaboration between finance and acquisition is really different here than the way it is in other agencies," she says. "I asked so many people [in other agencies] why they didn't consider [the integrated card option], and it was, 'Oh, I'm acquisition, I don't talk to finance,' or vice versa." Interior employees also have rallied behind the card. The union for Bureau of Reclamation employees, the National Federation of Federal Employees, supported stiffer penalties for delinquent billpayers and worked to make sure employees understood the rules of the new card, so central billing came off without a hitch. "When you have the support of employees, there are an awful lot of things you can do," says Sonderman.