October 11, 2012 at 8:09 pm #170853
Was looking through SAVE Award suggestions and saw this one:
The micropurchase threshold (GPC limit) of $3,000 is simply too small. A large number of purchases are slightly over $3,000 and they require a substantial investment of paperwork. By increasing the micropurchase threshold to $5,000 or even $10,000, a large amount of unnecessary contracting overhead can be eliminated, dramatically streamlining small government acquisitions.
What do you think? Is it realistic? Has it been done in the past?
October 11, 2012 at 11:45 pm #170871
Implementing this initiative not only makes sense, but would also go a long way to help improve small business goals, and expanding opportunities for small businesses and the use of simplified acquisition procedures.
With the recent Government Charge Card Abuse Prevention Act going into law, it will not be realistic. We can expect procurement officials to overreact, and take knee-jerk reactions to purchase card use my micro-managing these expenditures. I predict a significant drop in purchase card use in FY 2013 as a result, to the detriment of small businesses.
October 12, 2012 at 2:09 am #170869
Yes, raise it to $5000 and have it automatically adjusted on an annual basis according to inflation. Take it a step further and increase the certified cost or pricing data threshold from $700,000 to at least $1M and it adjusted on an annual basis according to inflation as well. All contracting thresholds should be adjusted on a basis like this and easily available and updates on a dedicated page on acquisition.gov, not just buried in the FAR.
October 12, 2012 at 1:25 pm #170867
I think it’s time to look at micro-purchase threshold, and in doing so, look at the rationale and justification behind how it was originally set. If the process for doing so makes sense and can be repeated, then use it. Otherwise, I agree that it needs to be tied to some type of economic indicator. That would make future adjustments a lot less painful.
October 12, 2012 at 3:13 pm #170865
MPL should Definitely be raised to $5,000. $10,000 seems to be a bit of stretch though.
October 12, 2012 at 3:38 pm #170863
This would be a good one for Guy Timberlake of the American Small Business Coalition to jump into as I definitely see this having a big impact, especially for small businesses as Jaime points out. In terms of purchase card spending to go down as a result of the new law, it is quite possible. However, there are technologies that are out there that can be supportive of these purchases to ensure that purchases aren’t questionable or detected as fraud. Level-3 processing is one that comes to mind as FTS writes about (http://www.governmentchargecard.us/)
October 12, 2012 at 4:13 pm #170861
Peter G. TuttleParticipant
Raising the micropurchase threshold to $10K is a great idea. We now have the technology to oversee and report on purchasing transactions in either real or near-real time. You no longer have to depend on hard-to-generate reports using stale forensic data. Will there still be abuse; sure? Today, depending on which software solutions you use, you can get to the bottom of potential abuse issues quickly and take decisive action.
October 15, 2012 at 2:18 pm #170859
As a smart pay cardholder, the paperwork involved in a micro purchase is something of horrific. It is true, it needs to be raised. A card holder can go into a local base Nish Servmart and spend 3K on toner cartridges alone! (NISH Servmarts are the “first” mandatory source a card holder must shop. Out in town “small business” is dead last. If NISH, then Ability One, DoD Emall, GSA Supply, GSA Advantage do not have what you want, then you have to “request” permission from your Credit Card office to purchase the item. Anything over the 3K goes to PR Builder and you “might” see your item within 90-120 days minimum, “IF” your justification is approved. IT and software (yes, this includes NON networked), forget it….an entire forest of trees has to be sacrificed for that monstrosity of a purchase. No less than 20 people on an email listing have to read and explore your request (whenever they get around to it), and if you have missed one “i” or “t”, the whole thing gets sent back to square one. If there are price changes in between the time you sent out the PR (obligated the money of course) and routed it, you will be notified sometime within 2-3 months that a “modification PR” is needed to adjust the price. Yesiree….and for that, you wait an additional 90-120 days from the time you submit the “modification PR”. (and of course, depending on the increase, your budget folks have to be notified you need some more $$). If the budget has gone dry, you are out of luck and yet again, have to go into PR Builder and zero out the request. You basically have wasted close to 90 days on the purchase of an item, you can no longer afford to purchase. I’m lovin’ it! NOT. If you work in a cubicle, no big deal, you can get pencils and paper till the cows come home. If you work semi industrial, I wish you luck.
October 17, 2012 at 7:35 pm #170857
An interesting question, and I must applaud all the replies, they all make sense and are of value. Pro-Cards have been a blessing as they reduce administrative expenses ( or so we are informed by the provider), but each agency/organization must develop a threshold limit that is workable for their particulr requirement, consider that in the private sector there are cards with limites of over 75,000.00 – not many, but they exist and they exist becasue the person using it is responsible for maintenance of large items – pipelines and transportation – and need to be able to get parts/services quickly and without several unanswered phone call/e-mails. We need to consider wht it is that the card was implemented to do – reduce costs administratively for the semi-regular or one off purchases made by an organization. These thresholds need to be reviewed regulry, a goodaudit by both Purchasing and Finance will determine the abuses and abusers, but also allow us to investigate other potential contracts and cost savings.
October 22, 2012 at 8:56 pm #170855
Neil, as a card holder, GS05, I would not want to be responsible for $75,000.00 limit on a gov credit card. Way above my pay grade in responsibility and besides, ordering supplies is not “all I do”, it’s a collateral duty.
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