Section I: Purchase Charge Card Program Overview

2. Why does the U.S. Government have a charge card program?

The GSA SmartPay® 2 Purchase Charge Card program provides the U.S. Government with an effective tool for conducting purchase, travel, and vehicle fleet operations in support of each agency/organization's mission. Government charge card usage provides streamlined, best-practice processes that are consistent with private industry standards. Here are some of the benefits of the GSA SmartPay® 2 program:

• Administrative Savings. The U.S. Government saves approximately $1.3 billion per year through administrative savings with the charge card instead of traditional purchase order-type transactions (this figure is based upon a 1994 study by the Purchase Charge Card Council, which concluded that $53.77 in savings is achieved each time a Purchase Charge Card is used instead of a written purchase order).
• Refunds. The GSA SmartPay® 2 Purchase Charge Cards provide refunds to agencies based upon dollar volume of transactions. In fiscal year 2007, refunds totaled over $166 million.
• Electronic Access to Data. . The GSA SmartPay® 2 Contractors' Electronic Access Systems (EAS) provide agencies with accurate, comprehensive transaction detail with a few clicks of a mouse button.
• Safety. The charge cards eliminate the need for agency imprest funds or cash.
• Worldwide Acceptance. The GSA SmartPay® 2 Purchase Charge Cards provide greater access to merchants because they are accepted worldwide.

The Purchase Charge Card is used to purchase supplies and services in accordance with the Federal Acquisition Regulation (FAR). The Purchase Charge Card is the preferred procurement and payment tool for micro-purchases, as prescribed in FAR 13.2. A "micro-purchase" is an acquisition of supplies or services in which the aggregate amount does not exceed $3,000, except in the case of construction where the limit is $2,000. The Purchase Charge Card may be used as an ordering and payment mechanism, not a contracting mechanism, for purchases above the micro-purchase threshold. When used as an ordering and payment mechanism, contractors may bill against the Purchase Charge Card. When the order is shipped, the contractor bills the Purchase Charge Card account instead of issuing an invoice directly to the agency/organization.

To allow agencies/organizations the maximum latitude, the GSA SmartPay® 2 Master Contract excludes only a few categories of purchases. They are:

• Long-term rental or lease of land or buildings;
• Travel or travel-related expenses (excluding conference rooms, meeting spaces and local transportation services such as Metro fare cards, subway tokens, etc.);
• Cash advances;