07-10

Procurement Information Circular


September 26, 2007

PURCHASE CARD ACCOUNT MANAGEMENT

 

PURPOSE:  To update guidance on purchase card account reviews and restrictions on purchase of gifts, food, clothing, and certain information technology.

 

BACKGROUND:  The NASA FAR Supplement (NFS) section 1813.301, Governmentwide commercial purchase card, provides overall guidance, procedures, and limitations for carrying out the purchase card program.  Each Center has established administrative and operating procedures and management controls for its purchase card program within the limitations of the FAR and the NFS.   The NASA Office of Inspector General (OIG) performed an audit of NASA’s purchase card program (IG-03-025).  This audit found that the purchase card program was managed effectively and that management had established reasonable controls over the program.  Additional guidance for increasing controls over purchase card accounts and restrictions on the purchase of gifts, food, and clothing was issued as PIC 03-20, to further reduce the potential risks from inappropriate use of the purchase card. This PIC incorporates that guidance unchanged and adds new restrictions on information technology purchases, as directed by the Chief Information Officer.

 

GUIDANCE:

   A.  Cardholder Information:  Each Center purchase card program coordinator (CAPC) is responsible for establishing and updating cardholder accounts with the purchase card provider, Bank of America (BoA).  The CAPC must maintain a record of the each cardholder’s designation, credit and purchase limitations, purchase card training; and any changes to the cardholder’s limitations. 

 

   B.  Account Reviews:  Each cardholder written delegation from the procurement officer or deputy procurement officer must have a single-purchase dollar limit and a monthly cumulative dollar purchase limit.  These purchase limitations must be reviewed by the cardholders’ approving official on a routine basis to ensure that they continue to meet the organizational need.  At a minimum, this review must be completed prior to renewal of the purchase card.  Annual reviews are encouraged.  The approving official must advise the CAPC of any changes to the cardholder’s limitations. 

 

         The CAPC should review cardholder accounts on an annual basis to identify accounts that are infrequently used and to confirm continued need.  Cards no longer required must be cancelled.  Additionally, routine review of credit limitations reported by BoA should be accomplished to ensure that the limitations are consistent with the limits requested.

 

   C.  Suspected Fraudulent Purchases:  In addition to notifying the BoA of suspected fraudulent transactions, cardholders are required to notify the NASA OIG in accordance with NPD 9800.1, NASA Office of Inspector General Programs.  Center training should address this requirement.

 

   D.  Restricted Purchases:  Generally, absent statutory authority, the use of appropriated funds for the purchase of gifts, clothing, and food is prohibited.  In addition, NASA has restricted certain information technology purchases.

 

         Gifts – Appropriated funds may not be used for personal gifts, unless there is specific statutory authority.  68 Comp. Gen. 226 (1989).  Items in the nature of gifts can rarely be justified as a necessary expense in carrying out the purpose of the Agency’s appropriation.  It makes no difference whether the “gift items” are given to federal employees or to others.  Generally, items given with the purpose of increasing morale or enhancing program support are not considered a necessary expense.  Documentation to support the purchase of personal gifts must clearly demonstrate how the item qualifies as a necessary expense.  Advice from the Center legal office should be sought when the purchase of gifts is being considered.

 

         Clothing -- The General Accounting Office (GAO) considers clothing to be the employee’s personal expense and has stated, “every employee of the government is required to present himself for duty properly attired according to the requirements of his position.”  63 Comp. Gen. 245 (1984).  The GAO in Comp. Gen Decision B-289683, October 7, 2002, states that under 5 U.S.C. section 7903, an agency may procure special clothing “for the protection of personnel in the performance of their assigned tasks.  In order for an item to be authorized by 5 U.S.C. section 7903, it must satisfy three tests: (1) the item must be “special” and not part of the ordinary and usual furnishing an employee may reasonably be expected to provide for himself; (2) the item must be for the benefit of the government, that is, essential to the safe and successful accomplishment of the work, and not solely for the protection of the employee, and (3) the employee must be engaged in hazardous duty.”  The GAO further states that under section 668 of title 29 U.S.C., protective clothing may be furnished by the government if the agency determines that is it necessary in order to satisfy OSHA standards promulgated by the Secretary of Labor.

 

         Documentation to support the purchase of clothing must clearly demonstrate how the item meets the above tests.  Advice from the Center legal office should be sought when the purchase of clothing is being considered.

 

         Food -- In Comp. Gen. Decision B-270199, August 6, 1996, the GAO states “In general, appropriated funds are not available to provide food to government employees at their official duty stations, unless specific authority exists. 72 Comp. Gen. 178 (1993).  Feeding oneself is a personal expense which a government employee is expected to bear from his or her salary.  65 Comp. Gen. 738, 739 (1986).”

 

         There are some statutory authorities that, in certain circumstances, permit the use of appropriated funds to pay for meals and light refreshments.  Food may be provided for employees as a necessary expense under the Government Employees Training Act, 5 U.S.C. sec. 4109, when provision of that food is necessary to achieve the objectives of the training program.  Generally, provision of food under section 4109 requires a determination that provision of the food is necessary in order for the employees to obtain the full benefit of the training.  B-247966, June 16, 1993.  For example, the design of the training requires maximum interaction and communication among participants such as “working sessions” at which either problem assignments are discussed or speakers are heard.

 

         Food expenses may be payable in connection with the attendance of government employees at meetings and conferences under 5 U.S.C. sec. 4110 (1994).  A threshold test for application of section 4110 is whether the food was provided at a formal conference or meeting involving topical matters of general interest to governmental and nongovernmental participants, rather than at a routine business meeting primarily involving day-to-day agency operations and concerns.  68 Comp. Gen. 604, 605 (1989).

 

         The provision of modest refreshments at an awards ceremony may be an appropriate expense under the Government Employees Incentive Awards Act, 5 U.S.C. sec. 4501-4506 (1994).  However, if the awards event is combined with another event, such as a retirement, the food expenses may not be payable with appropriated funds.

 

         Documentation to support the purchase of food must clearly demonstrate how the item meets the above exceptions.  Advice from the Center legal office should be sought when the purchase of food is being considered.

 

         Certain Information Technology -- Except for the Outsourcing Desktop Initiative (ODIN) contract, Government Purchase Cards may not be used for the acquisition of cell phones, Personal Data Assistants (PDA's), pagers, cellular internet services, computer desktops, and workstations without the express written approval from the Office of the Center Chief Information Officer (OCIO).   This policy is in accordance with the letter from the Associate Administrator, subject "Mission Focus Review (MFR) Decision Memorandum for Phase 1 Recommendations 7, 100, and 137", dated July 9, 2007.  All questions about definitions of these terms will be referred to the Center OCIO.

 

         Center training should address these restricted purchases in addition to purchases restricted by Center policies.

 

CANCELLATION:  PIC 03-20 is hereby cancelled.

 

EFFECTIVE DATE:  This PIC is effective as dated and will remain in effect until canceled or superseded.

 

HEADQUARTERS CONTACT:  Patrick Flynn, Contract Management Division, (202) 358-0640, email: patrick.flynn@nasa.gov.

 

 

 

James Balinskas

Director, Contract Management Division

 

DISTRIBUTION:

   PIC List