U.S. General Services Administration Federal Acquisition Service GSA SmartPay® Saves Innovative Payment Solutions Joline McDonald Office of Charge Card Management General Services Administration 2013 GSA SmartPay Training Forum July 29 through July 31

Federal Acquisition Service 2 Legislative and Regulatory Environment

Federal Acquisition Service 3 Government Charge Card Abuse Prevention Act of 2011 On October 5, 2012, President Obama signed the Government Charge Card Abuse Prevention Act of 2011 (Public Law ):  All executive agencies are required to comply**  Most requirements are addressed in existing OMB Circular A-123, Appendix B guidance  There are additional Inspector General requirements not addressed in the OMB Circular ** The Department of Defense has separate requirements in PL for Purchase Card only.

Federal Acquisition Service 4 OMB Memorandum M – To help agencies comply with P.L , the Office of Management and Budget (OMB) released OMB Memo M-13-21, Implementation of Charge Card Abuse and Prevention Act. The memo provides supplemental guidance to the OMB Circular A- 123, Appendix B in the following areas:  Requires all Federal agencies to establish certain safeguards and internal controls for the Government charge card program  Reports on purchase and integrated card violations, and establishes penalties for violators, including dismissal when circumstances warrant (purchase transactions only)  Increases oversight by requiring that each agency Inspector General (IG) periodically conduct risk assessments and audits to identify fraud and improper use of the Government charge cards

Federal Acquisition Service 5 Treasury Financial Manual Update OCCM worked with the Department of the Treasury to update the Purchase Card Guidance, which includes the following updates for agencies:  Procedures should encourage the use of cards as a method of contract payment (in accordance with FAR Part )  Review procedures must include data mining  Take steps to maximize sales and productivity refunds  Increase the use of strategic sourcing programs  Review accounts payable files and analyze spending patterns to find opportunities for savings

Federal Acquisition Service 6 Executive Order Executive Order (EO) “Promoting Efficient Spending” was issued November 9, 2011 to reduce government spending. Agencies are directed to:  Promote cost cutting and spend reduction policies  Reduce costs by 20% from FY 2010 levels  Reduce printing and encourage use of electronic documentation  Improve agency fleet performance

Federal Acquisition Service 7 Improper Payments Elimination and Recovery Improvement Act of 2012 In accordance with the Public Law , agencies must take steps to actively mitigate improper payments, fraud, waste, and abuse.  Verify vendors are eligible to receive government payments (including contracts) on Do Not Pay list Next Steps OCCM is working with OMB and the Department of the Treasury to explore the applicability of the Do Not Pay list to charge card transactions.

Federal Acquisition Service 8 Looking for Potential Savings?

Federal Acquisition Service 9 GSA SmartPay Savings Calculator OCCM developed the GSA SmartPay Savings Calculator to be an interactive tool for agencies to estimate the impact of transferring spend to GSA SmartPay payment solutions:  The tool is designed to enhance and support leadership payment decision making  Provides estimates for potential savings based on increased utilization  Please note that the tool assumes any generated refunds are provided directly to the agency

Federal Acquisition Service 10 GSA SmartPay Savings Calculator  On the left, enter current spend by program, the average sales refund percentage,and total contract spend  On the right, enter current grant spend, local travel subsidy, and estimate percentage to be migrated  The Spend Breakdown graph reflects the current total GSA SmartPay spend compared with potential migrated spend  The Refund Breakdown graph reflects the current average sales refund percentage compared with potential refunds based on migrated spend

Federal Acquisition Service 11 Accounts Payable File Review The Accounts Payable File Review (A/P File Review) is a no-cost tool for agencies to help identify opportunities to leverage GSA SmartPay solutions as methods of payment to increase process efficiencies, cost savings, and refunds. Benefits may include:  Greater visibility into agency spend and available payment mechanisms  Payment and process efficiencies realized  Opportunities identified for increasing refunds earned

Federal Acquisition Service 12 A/P File Review Inputs To initiate the A/P File Review process, customers agencies must provide GSA SmartPay contract banks with at least one year of accounts payable information. This includes, but may not be limited to the following:  Information that includes payment date  Vendor information including name, address, and identification  Cost center and expense codes

Federal Acquisition Service 13 A/P File Review Outputs Following A/P File Review analysis of available agency data and information, the GSA SmartPay contract bank will provide the following to the customer agency:  Industry best practices and benchmarks  Recommendations for how to close gaps and increase use of GSA SmartPay solutions  A list of key vendors that the agency does business with but do not accept cards  Agency action plan

Federal Acquisition Service 14 Examples of Cost Savings Identified (1) Inconsistent card use at a large government agency resulted in missed refund opportunities. Agency implemented bank recommendations:  Reduced check spend by migration to card spend  Increased spend from approximately $1M to more than $40M in 5 years (2) State/local government entity had gaps in card use and manual payment mechanisms:  Increased card usage by more than 100%  Realized more than $1M in cost savings annually

Federal Acquisition Service 15 Innovative SmartPay Solutions

Federal Acquisition Service 16 Innovative Payment Solutions The GSA SmartPay 2 master contract includes traditional magnetic stripe charge card solutions, but also a broad range of innovative carded and non- carded solutions that can improve security, control, and transparency, and increase refunds earned:  Innovative Charge Card Products  Cardless Solutions  Secure Chip Cards  Foreign Currency Cards Innovative Charge Cards Cardless Solutions Secure Chip Cards Foreign Currency Cards

Federal Acquisition Service 17 Stored Value Cards Customers can use a single value load or card can be reloaded with a specified amount on a recurring basis. Benefits for using Stored Value Cards may include:  Immediate fund availability and flexibility  PIN number can be assigned for ATM withdrawals  Enhanced internal controls  No credit check required  Cardholder has online access to review balance and transaction history Innovative Charge Cards Cardless Solutions Secure Chip Cards Foreign Currency Cards

Federal Acquisition Service 18 Declining Balance Cards Declining Balance Cards function similarly to traditional plastic charge cards, however spending limits can be set to not refresh monthly. Benefits may include:  Financial flexibility and security  Reduction of administrative fees  Viable option for employees who cannot be issued a charge card  Safe alternative to cash and paper checks Innovative Charge Cards Cardless Solutions Secure Chip Cards Foreign Currency Cards

Federal Acquisition Service 19 Virtual Cards ( aka Ghost Cards) A virtual account number is assigned to a single vendor, which allows authorized agency personnel to purchase from this vendor without having to use multiple cards or accounts. Benefits may include:  Reduces number of open accounts  Allows for multiple users  Allows for a high level of control  Reduces the risk of lost or stolen cards Innovative Charge Cards Cardless Solutions Secure Chip Cards Foreign Currency Cards

Federal Acquisition Service 20 Single Use Accounts Users have access to a virtual account number for use during a specific time period, for a limited dollar amount, and/or for a specific vendor. Benefits for using Single Use Accounts may include:  Accounts can be activated in real time  Disposable, one-time use account numbers may reduce the risk of fraud and abuse  Reduces the need for convenience checks  Increased oversight of spend  Seamless reconciliation Innovative Charge Cards Cardless Solutions Secure Chip Cards Foreign Currency Cards

Federal Acquisition Service 21 Electronic Invoice and Payment Agencies and merchants can manage an entire invoice and payment cycle online, eliminating the need for cumbersome processes associated with paper-based systems. Benefits may include:  Increased visibility and control over invoice tracking  Ability to pay merchants that traditionally do not accept carded payments for high dollar transactions  Improved cash-flow visibility and accelerated payment settlement  Reduces number of late payments Innovative Charge Cards Cardless Solutions Secure Chip Cards Foreign Currency Cards

Federal Acquisition Service 22 Contact and Contactless Chips Charge Cards with security chips can be an effective tool for customers that need enhanced security for transactions. Using cards with imbedded microchips may have the following benefits:  Used for highly secure data transmission  Greater worldwide interoperability and enhanced security and protection  Advanced tamper-proof chip technology Innovative Charge Cards Cardless Solutions Secure Chip Cards Foreign Currency Cards

Federal Acquisition Service 23 Foreign Currency Cards This solution is designed for agencies with foreign operations or those that may deploy personnel internationally for extended period as funds spent are billed and paid with local currency.  Elimination of foreign currency exchange fees  Availability to issue cards in predefined global locations  Foreign currency cards allow for customer support in the local language Innovative Charge Cards Cardless Solutions Secure Chip Cards Foreign Currency Cards

Federal Acquisition Service 24 Innovative Applications (1) Grants Payment Solutions OCCM is working with customer agencies to develop and test a GSA SmartPay grants payment solution, which could result in:  Increased refunds based on increased volume  Enhanced ability to track grant activity, helping to mitigate fraud, abuse, and erroneous payments  Increased internal controls such as Merchant Category Code (MCC) blocking  Streamlined grants payment processes to reduce administrative processing costs

Federal Acquisition Service 25 Innovative Applications (2) Transit Benefit and Subsidies Payment Benefits for using a GSA SmartPay solution for transit subsidy payments, such as the Department of Health and Human Services Go!card, could include:  Limited to transit provider MCC code only  Automated distribution and receipt of benefits through reloadable fare media  Increased internal controls and accountability  Avoids costs as participants only spend what is needed monthly, also use or lose monthly benefit for better spend control

Federal Acquisition Service 26 Innovative Applications (3) Utilities Payment GSA SmartPay Program solutions may be used for payments to utility companies. For instance, through its Payment Card program, the Department of State pays utility bills with a GSA SmartPay solution. Benefits may include the following:  Potential to earn refunds on a recurring expense  Increase level of data available to help track energy use and expenditures  Identify high energy usage programs and helps facilities and operations identify potential issues

Federal Acquisition Service 27 What Can You Do To Get Started – Finding Potential Savings

Federal Acquisition Service 28 The Purchase Card and the FAR In accordance with the Federal Acquisition Regulation (FAR), agency procedures should not limit the use of the Purchase Card to micro-purchases. Rather, agency procedures should encourage the use of the Purchase Card in greater dollar amounts by contracting officers to place orders and to pay for purchases against contacts under part 8 procedures when authorized, and to place orders and/or make payment under other contractual instruments, when agreed to by the contractor (FAR Part ). Purchase Travel Fleet

Federal Acquisition Service 29 Contract Payments Tools such as an A/P File Review and/or the GSA SmartPay Savings Calculator can help identify areas to migrate spend to maximize cost savings and refunds.  Review how your agency pays against existing contracts and spend through those contracts  Review your agency’s policies on payments against contracts Purchase Travel Fleet Savings Calculator Utilize the GSA SmartPay Savings Calculator to determine potential additional refunds earned by moving all or a portion of the payments to a GSA SmartPay solution.

Federal Acquisition Service 30 Federal Strategic Sourcing OMB established the Federal Strategic Sourcing Initiative (FSSI) Governance Council and anticipates that there will be additional strategic sourcing opportunities available in the near future:  Review payments made outside of FSSI contracts that could be moved to an FSSI vehicle (could be determined with an A/P File Review)  Determine additional potential savings, refunds, and point of sale discounts that could be received by moving to FSSI vehicles  Utilize FSSI Implementation Kit Purchase Travel Fleet

Federal Acquisition Service 31 Improving Travel Card Use Compliance Improving GSA SmartPay Travel Card use when employees travel could be an effective way to increase refunds earned and improve enhance internal controls.  A/OPCs should develop a plan for enforcing travel card use policies within agencies  What are some of your agency’s best practices? Purchase Travel Fleet

Federal Acquisition Service 32 Innovative Fleet Solutions GSA SmartPay solutions can be designed to streamline Fleet payment processes and enhance data collection. Solutions include but are not limited to:  GPS/Telematics: GPS technology used to associate transactions to GPS coordinates for increased transparency to help mitigate fraud and abuse  Fuel Advisors: Designed to help bulk fuel purchasers find best available prices based on unique consumption patterns and low cost sources  Corporate Payment Solutions: Designed to help pay for services outside of traditional fleet transactions, including short term car rentals Purchase Travel Fleet

Federal Acquisition Service 33 Resources

Federal Acquisition Service 34 Available Resources for Innovation There are a number of available resources for agencies to explore increased use of GSA SmartPay solutions to help address agency payment challenges. These include, but are not limited to:  “GSA SmartPay Saves” communications campaign and website  Innovative solutions brochures  Contractor banks resources, including brochures and/or classes

Federal Acquisition Service 35 GSA SmartPay Website and Blog What's New Program Statistics New Legislation State Tax Information Managing Your Program GSA SmartBlog Accepting GSA SmartPay® Cards Online Training for Cardholders and A/OPCs

Federal Acquisition Service 36 General Contact Information GSA Contact Information:  GSA SmartPay Program Support ( Helpline: (703) Bank Contact Information:  Citibank ( Customer Service: (800)  JP Morgan Chase ( Customer Service: (888)  U.S. Bank ( Customer Service: (888)

Federal Acquisition Service 37 Additional GSA SmartPay Courses GSA SmartPay 2 Program Update Conduct Effective Oversight of Your GSA SmartPay Program GSA SmartPay 2 Master Contract Basics GSA SmartPay Saves: Innovative Payment Solutions GSA SmartPay Purchase Management Essentials GSA SmartPay Travel Management Essentials GSA SmartPay Fleet Management Essentials GSA SmartTax: What You Should Know About State Taxes GSA SmartPay Website

Federal Acquisition Service 38 Audience Questions

Federal Acquisition Service 39 Thank you for your time and attention! Contact Information Joline McDonald Please provide your feedback and thoughts on our website, available at Don’t forget to visit the GSA SmartBlog at: