U.S. Government Use of Commercial Card Technology: A Case for Change in Military Card Distribution Policy
DEFENSE ACQUISITION UNIV FT BELVOIR VA
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The U.S. Government has used bank commercial card technology since the 1980s to simplify and reduce the cost of the process to acquire goods and services. The term commercial cards includes purchase, travel, and fleet cards. Generally, purchase cards are used to acquire low-value, nontravel-related goods and services travel cards are used to facilitate employee travel on government business, e.g., airfare, hotels, and auto rentals and fleet cards are used to support employee purchases of fuel and other automotive services for government vehicles. The benefits derived from card use vary by type of card, manner of card use, and degree of integration with the procedural and technological fabric of the acquisition process. Purchase cards reduce or eliminate the paperwork associated with requisitions, purchase orders, invoices, and payments. The General Services Administration GSA estimates that purchases under 2,500 account for only 2 percent of total Federal Government spending but 85 percent of total procurement transaction volume GSA, 2007. The purpose of this article is to identify the underlying dynamics associated with commercial card spending by the U.S. Government and its impact on governmental efficiency and cost savings. Since the military services and defense agencies comprise a significant component of government commercial card use, special attention will be given to their role in commercial card use trends. Finally, recommendations to enhance commercial card spending will be proposed.
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies