Federal Acquisition Service U.S. General Services Administration David J. Shea, CPCM, PMP Director, GSA SmartPay® MasterCard Public Sector Forum March 13, 2007 Transitioning to GSA SmartPay® 2

Federal Acquisition Service 1 Agenda Recap from Last Year’s Forum What would happen? Program Overview Program Benefits Transition to GSA SmartPay® 2 GSA SmartPay® 2 Improvements Impacts of the Transition What needs to be Done – A Sampling What GSA is Doing Q&A

Federal Acquisition Service 2 Recap from Last Year’s Forum  “Future of the Government Charge Card” - A “why is that?” discussion of government charge card service capabilities not keeping pace with commercial and individual charge card services.

Federal Acquisition Service 3 3 In FY 2005, on average, how many card transactions occurred each minute? In FY 2005, on average, how much card spend occurred each minute? 742 card transactions per minute $199,933 in card spend per minute Administrative savings and efficiency gains were estimated at $1.4 billion in administrative processing cost avoidance in FY05 for purchase cards alone

Federal Acquisition Service 4 What would happen if the government had to find a new way to handle 98 million transactions… …with the current lack of contracting and other specialists?

Federal Acquisition Service 5 What would happen if $26 billion in government purchases, travel transactions, and fuel/maintenance stopped?

Federal Acquisition Service 6 What would happen if banks lost % of their total annual card spend overnight? Stay tuned… and now a word from GSA SmartPay® 1

Federal Acquisition Service 7 Cliffhanger  We interrupt this program for a word from our “sponsor” the current GSA SmartPay® Program.

Federal Acquisition Service 8 Program Overview  GSA SmartPay®, established in 1998, is the federal government charge card program that serves over 350 federal agencies, organizations, and Native American tribal governments.  One GSA Master Contract with five banks provides card products and services to all 350 agencies and tribes.  The GSA SmartPay® program is the largest government charge card program in the world.

Federal Acquisition Service 9 Program Overview (cont.)  In FY06 alone:  Total program spend was over $26.5 billion, a 6.4% increase over FY05.  Over 98 million transactions were processed through 2.9 million cards.  Over $156 million was received by the government in refunds.  The top ten customers account for over 90% of program spend.

Federal Acquisition Service 10 Program Overview (cont.) FY06: approximately $17.8 billion in spend; 25 million transactions; 299,000 cardholders

Federal Acquisition Service 11 Program Overview (cont.) FY06: approximately $7 billion in spend; 41 million transactions; 2 million cardholders

Federal Acquisition Service 12 Program Overview (cont.) FY06: approximately $1.8 billion in spend; 32 million transactions; 659,000 cards

Federal Acquisition Service 13 Selected Program Benefits Agencies Banks Associations Mission support Secure, efficient procurement and payment tool Est. $1.7 billion administrative cost avoidance in FY06 Access to City Pair Program; est. $3.6 billion in govt-wide travel savings in FY06 Rebates based on spend, payment speed POS discounts Electronic transaction data enables better reporting, oversight Assist U.S. Government in addressing its business problems – expanding markets One Master Contract streamlines procurement and management efforts $26.5 billion in spend in FY06 Assist U.S. government in addressing its business challenges $26.5 billion in spend in FY06

Federal Acquisition Service 14  Increased security requirements – increased emphasis on security around Personally Identifiable Information (PII) and card transaction data to minimize risk to individual cardholders and to agencies.  Increased data requirements – more focus on Level 3 data, which provides better insight into the program for both agencies and GSA SmartPay®.  Improved program technology – increased flexibility of EAS systems in reporting and account management capabilities. Transaction monitoring to detect misuse, fraud, waste, and abuse GSA SmartPay® 2 Improvements

Federal Acquisition Service 15  New or Improved Products:  Contactless cards – faster point-of-sale transactions  Debit cards – help to control the amount of outstanding credit with cardholders.  Pre-paid (stored value) cards – can be issued with required value on short notice.  Cardless accounts – provide established vendor-specific charge accounts without physical cards.  Travelers and convenience checks – improved ability to issue and reconcile checks online such as: Electronic transaction record must include merchant name Online imaging of cleared checks GSA SmartPay® 2 Improvements (cont.)

Federal Acquisition Service 16  The current GSA SmartPay® contract expires on November 28,  Acquisition for GSA SmartPay® 2 (SP2), the successor contract, is well underway. Several agency customers are involved in the source selection process.  The period of performance of the SP2 master contract is 10+ years. Transition to GSA SmartPay® 2

Federal Acquisition Service 17 Transition Timeline

Federal Acquisition Service 18 Impacts of the Transition  While SP2 includes a number of improvements, the effort involved in the transition is not to be underestimated.  How would your organization, company, or association be affected if the world’s largest government charge card program went “down” or was significantly impaired?  Would you be concerned?

Federal Acquisition Service 19 Impacts of the Transition (cont.)  You bet.  That’s what we’re facing if the transition doesn’t go smoothly. Agencies have come to rely on charge card services – similar to utility services.  The transition (convergence) includes the re-issuance of over 3 million new cards across 350 organizations – in a relatively short time. And card issuance is of minor complexity compared to other issues.  Fortunately, 10 agencies represent roughly 90% of the business. Unfortunately, these organizations are huge, complex organizations.  It is not possible to predict what banks/organizations will win which agencies’ business.

Federal Acquisition Service 20  During the planning phase, agencies will need to:  Define program needs  Develop SP2 task order requests  Evaluate, negotiate and award task order(s)  Obtain current cardholder data; “cleanse” the data to verify names, addresses, etc. Cardholder purchase limits should also be reviewed.  Define / update the program hierarchy What Needs to be Done – An Overview

Federal Acquisition Service 21 What Needs to be Done – An Overview  During the management phase, agencies will work with the selected bank to:  Establish interfaces with agency systems as required  Deploy the EAS  Train users on the EAS

Federal Acquisition Service 22  Agencies will also need to:  Communicate with A/OPCs and cardholders regularly throughout the transition to let them know what’s coming  Close-out their existing task orders and reconcile old accounts What Needs to be Done – An Overview (cont.)

Federal Acquisition Service 23 Common Sense Tips For Agencies  - Ensure key executives are on-board  - Communicate, communicate, communicate – at all levels (management, A/OPCs, cardholders, finance, procurement and IT staffs)  - With few exceptions, government agencies have not managed a charge card transition for 8+ years  - Seek out agency personnel who successfully worked through last transition.  - Ensure any interface requirements have been thoroughly and accurately documented -- After the SP2 awards and kick-off conference, work closely with your new bank -- Remember, the GSA SmartPay Program Office is here to help

Federal Acquisition Service 24 What GSA is Doing – A Sampling  The GSA SmartPay® program office is developing tools to support agencies in their transition planning efforts:  Transition Quick Reference Guide  Transition Executive Briefing  Pre- and Post- Award Checklists  FAQs

Federal Acquisition Service 25 What GSA is Doing – A Sampling (Continued)  Communications Plan Template  Agency/Organization Needs Assessment  Sample task order Statement of Work (SOW)  Frequent meetings w/ A/OPCs  EAS testing (includes 508 compliance)  Transition “Boot Camp”

Federal Acquisition Service 26 What GSA is Doing – A Sampling (Continued)  One-on-One Meetings with agencies as requested  Briefings to CAO, CFO Councils, etc.  “Certifying” in coordination with agencies when an SP2 bank is ready to go live  Developing continuity of services plans  Develop transition progress metrics

Federal Acquisition Service 27 Transition in Closing  What appropriate actions are YOU taking now to get ready?  The eyes of the world are upon us.  If successful, people will wonder why Shea made all the fuss….

Federal Acquisition Service 28 David J. Shea, CPCM, PMP (703) Please provide your feedback and thoughts about the current and future program at: under “GSA SmartPay® Program Feedback Form”. This presentation will be posted at: Q & A