Lawmakers push bill to improve charge-card shopping

Two senators introduced legislation Wednesday aimed at stemming wasteful spending by holders of government charge cards.

The bill, drafted by Sens. Susan Collins, R-Maine, and Russell Feingold, D-Wis., orders the Office of Management and Budget to ensure that agencies help purchase-card holders hone shopping skills. The legislation also would encourage the General Services Administration to secure bigger discounts for card purchases.

Purchase cards, which are designed to simplify the process of procuring supplies worth less than $2,500, have long been a magnet for fraud and misuse. Agencies have cited numerous instances where employees have used the cards to buy frivolous, non-work-related items, including designer briefcases, ski clothing, leather bomber jackets, Lego toy robots and a mounted deer head.

But Collins and Feingold introduced the 2004 Purchase Card Waste Elimination Act to address a separate problem: waste that occurs when government employees use charge cards with good intentions, but fail to get the best possible deals. Agencies have stepped up efforts to educate workers on proper use of cards. But they have done little to teach employees about available discounts or deals listed on the GSA schedule of pre-negotiated contracts, General Accounting Office auditors told the Senate Governmental Affairs Committee at a hearing Wednesday.

Charge-card holders and officials designated to approve purchases are often poorly trained, said Gregory Kutz, GAO's director of financial management and assurance. For example, at a Federal Aviation Administration field office, two-thirds of managers overseeing acquisitions and 38 percent of card holders went at least five years without any documented training.

Poor training leads to wasteful use of charge cards, Kutz said. At the Transportation Department, for instance, one purchase-card holder bought office supplies at prices 20 percent above those available on the GSA schedule, he testified. At the Agriculture Department, an employee used a purchase card to buy telecommunications services at 13 percent above the GSA price.

Under Collins and Feingold's bill, OMB officials would have to issue guidelines for agencies on analyzing purchase-card spending and negotiating discount agreements with companies. OMB would also need to help agencies facilitate better communication with card holders to ensure shoppers are aware of deals, and would need to provide Congress with annual progress reports.

In turn, agencies would need to submit to OMB periodic reports on efforts to promote smarter shopping. Agencies already compile quarterly reports on steps taken to monitor card use and prevent fraud.

The legislation also would require GSA to "actively pursue" point-of-sale discounts with large suppliers. GSA already does this to some extent, said Neal Fox, assistant commissioner of the agency's Office of Commercial Acquisition. Office Depot and Home Depot now offer walk-in discounts, thanks to those efforts, Fox testified. But Wal-Mart has rejected invitations to participate.

GSA also provides online training courses for card users, Fox told lawmakers. The SmartPay program teaches card holders about ethics. GSA is in the process of adding online lessons on efficient shopping techniques, including ways of comparing prices.

The Pentagon is looking to GSA to take the lead on negotiating charge-card deals, said Col. William Kelley, program director for the Defense Department's Data Mining Division. "I do not believe we want commercial vendors to have to negotiate point-of-sale discounts and other discount agreements on purchase cards from a multitude of federal agencies."