1. 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

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

3. 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.

4. 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

5. 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?

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

7. Federal Acquisition Service 6 What would happen if banks lost 5 - 10% of their total annual card spend overnight? Stay tuned… and now a word from GSA SmartPay® 1

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

9. 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.

10. 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.

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

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

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

14. 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

15. 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

16. 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.)

17. Federal Acquisition Service 16  The current GSA SmartPay® contract expires on November 28, 2008.  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

18. Federal Acquisition Service 17 Transition Timeline

19. 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?

20. 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.

21. 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

22. 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

23. 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.)

24. 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

25. 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

26. 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”

27. 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

28. 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….

29. Federal Acquisition Service 28 David J. Shea, CPCM, PMP david.shea@gsa.gov (703) 605-2867 Please provide your feedback and thoughts about the current and future program at: www.gsa.gov/gsasmartpay, under “GSA SmartPay® Program Feedback Form”. This presentation will be posted at: Q & A www.gsa.gov/gsasmartpay