Senate approves measure to strengthen purchase card oversight

The Senate on Tuesday approved bipartisan legislation to increase oversight and training for the use of federal purchase cards, in an effort to rein in reported spending abuses and boost the utilization of small businesses in government micro-purchases. But prospects for similar legislation to pass in the House are murky.

The bill (S. 457) addresses the use of credit cards provided by agencies that are designed to streamline government shopping by allowing approved employees to pay up to $2,500 for normal purchases of goods and services, or up to $15,000 in emergencies.

The Senate-passed legislation would require the Office of Management and Budget to issue guidelines for analyzing card use and assessing the practices of individual users, as well as for negotiating discounts from major vendors and identifying opportunities to channel card use toward small businesses.

It also calls on the General Services Administration to collect better data on use of the cards and to pursue point-of-sale discounts. Agency heads would be required to submit annual reports to OMB on card use, with OMB reporting to congressional oversight committees.

Sens. Susan Collins, R-Maine, and Russ Feingold, D-Wis., sponsored the bill, which is similar to legislation they introduced in 2004 that failed to move beyond the Senate Homeland Security and Governmental Affairs Committee.

In a statement announcing Tuesday's vote, Collins, who chairs that committee, said, "The American people have the right to expect the federal government to spend their tax dollars carefully and wisely." She said information obtained as a result of the bill "should prove invaluable in helping to better regulate and track the use of these cards, which account for billions of dollars of government spending."

Feingold focused on fraud associated with the cards, saying, "The abuses of the government credit card program, including the purchase of designer luggage, surgical enhancements, two cars and a motorbike, need to be stopped."

But Rep. Tom Davis, R-Va., chairman of the House Government Reform Committee, has long opposed extensive regulation of the purchase cards. Arguing that the program saves far more in administrative costs by simplifying the purchase of small routine items than it costs in fraudulent use, he consistently has supported raising the ceiling on the size of purchases that can be made with the cards, and has opposed requiring credit checks on employees eligible to receive them.

Legislation that would correspond to the Senate-passed bill has not been presented in the House.

"We plan to give this a careful look to see whether current management reforms are taking care of the remaining challenges in this area or if legislative intervention is necessary," said Robert White, a spokesman for Davis.

The inclusion of provisions to support small businesses is new to the Senate legislation, and received a warm welcome from Sen. Olympia Snowe, R.-Maine, chairwoman of the Senate Small Business and Entrepreneurship Committee.

"Federal agencies spend $16 billion each year through credit card orders that are not subject to federal competitive requirements, which leaves me concerned about fair small business participation in these purchases," Snowe said in a statement. The Senate bill would apply a 1953 Small Business Act goal that calls for 23 percent of government purchases to be made from small businesses.