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					         U.S. General Services Administration




What’s New with
GSA SmartPay®?
         May 2006
                   Agenda
•   Welcome
•   Program Overview
•   GSA SmartPay® 2
•   Transition
•   GSA SmartPay® Program Management
•   What Does This Mean for Me
•   Questions and Answers




                                       2
            Program Overview

• Original GSA SmartPay® established in 1998
• Enables agencies to obtain Purchase, Travel, Fleet, and
  Integrated Charge Cards, through a 10 year Master
  Contract (5 year base, 5 one-year options) with five
  banks: Citibank, Bank of America, JP Morgan Chase,
  U.S. Bank, and Mellon (purchase only)
• Provides program service to over 350 Federal agencies,
  organizations, and Native American tribal governments


                                                       3
             Program Overview

• Over 92 million purchase, travel, and fleet transactions
  processed in Fiscal Year 2005 through 2.6 million cards
• Total program spend of nearly $25 billion in FY 2005
• Earnings of over $118 million in agency refunds in FY
  2005
• Existing contracts end November 2008
• Recompetition effort under way (“GSA SmartPay® 2”)



                                                         4
               Program Overview
Why Cards?
• Administrative savings and efficiency, estimated at $1.4 billion in
  administrative processing cost avoidance in FY05 for purchase
  cards alone
• Rebates based on dollar volume and payment performance
• Worldwide acceptance
• Access to merchants offering Point-of-Sale discounts, including
  Office Depot, Home Depot, etc.
    – See www.gsa.gov/gsasmartpay Emergency Charge Card Use
      Information for further details (click on the “merchants” hyperlink)
• Travel card accesses City Pair Program – discounted fares on
  airlines, bus, train
    – 72 percent average discount off comparable commercial fares; total
      savings from this is anticipated to be more than $2.8 billion in FY06
      alone
• Provides electronic transaction data, enabling better reporting

                                                                             5
                  Program Overview
                                                            Sp end
                                                            (b illio ns)
              Purchase Card                                 Transact io ns
                                                            (millio ns)
            Program 1999-2005                               Card ho ld ers
                                                            (t ho usand s)

           30                                                        900

           25                                                        750

           20                                                        600

           15                                                        450

           10                                                        300

            5                                                        150

            0                                                        0
                1999 2000 2001 2002 2003 2004 2005

FY05 - $17 billion in spend; 26 million transactions; 300 thousand cardholders

                                                                             6
                 Program Overview
                                                          Spend
                                                          (billions)
              Travel Card                                 Transact ions
                                                          (t en millions)
           Program 1999-2005                              Cardholders
                                                          (millions)

        10.0                                                         4
                                                                     3.5
         8.0
                                                                     3

         6.0                                                         2.5
                                                                     2
         4.0                                                         1.5
                                                                     1
         2.0
                                                                     0.5
         0.0                                                         0
               1999 2000 2001 2002 2003 2004 2005

FY05 - $7 billion in spend; 43 million transactions; 1.9 million cardholders

                                                                            7
       Program Overview
                                            Sp end
    Fleet Card                              (b illio ns)

Program 1999-2005                           Transact io ns
                                            (t en millio ns)

3.0                                                    900

2.5                                                    750

2.0                                                    600

1.5                                                    450

1.0                                                    300

0.5                                                    150

0.0                                                    0
      1999 2000 2001 2002 2003 2004 2005

 FY05 - $1 billion in spend; 24 million transactions

                                                               8
                                Program Overview
                                                 Government-Wide Delinquency Trends
                                                   Individually Billed Travel Accounts


25%




20%         20%

                    18%
                                                                                                                                      CY
        16%                                                                                                                            2000
15%                                                                                                                                    2001
                                14%
                                                                                                                12%                    2002
        13%                                12%                                                                              13%        2003
                                                                                                     10%
                                                   11%                                                                                 2004
       10%          11%                                                                        9%
10%                                                                      9%                                                 10%        2005
                                                                                    8%                              10%
        9%          9%                                      8%                                           10%
                            7%                                                                                              8%
                                                                                   7%
                    7%                6%                                                       8%                           7%
                                                                                                         6%
        6%                                       5%                                                             7%
                           5%                                      7%              6%                     5%
                    5%                                     6%
5%                                                                                        6%
                                                             4%      4%                             4%           5%
                            4%                                                                                              4%
                    4%                 4%        4%         3%       4%       4%              4%                3%
                                                                    3%        3% 3%            3%         3%
                            3%        3%                  3%                             3%                    3%
                                                  3%

0%
      JAN         FEB     MAR         APR        MAY      JUN      JUL         AUG        SEP        OCT       NOV        DEC



                          Average delinquency rate was 3.35% in FY05,
                             close to that of corporate card programs                                                             9
                 GSA SmartPay® 2
Future Program Development
The GSA SmartPay® team has conducted extensive industry
and customer research including:

•   Customer survey (437 respondents)
•   91 stakeholder interviews
•   4 focus groups
•   10 panel discussions
•   Request for Information (RFI) and
•   Industry meetings




                                                          10
                 GSA SmartPay® 2
Future Program Development
Through this program review process, GSA:

• Gathered comprehensive requirements that represent the diverse
  feedback of program customers and stakeholders
• Gained insight into industry trends and regulations that impact the
  program now, and may in the future and
• Obtained buy-in from customers and stakeholders who have been
  receptive to GSA’s collaborative approach to future program
  planning efforts




                                                                        11
                 GSA SmartPay® 2
Future Program Development
Utilizing research results, the GSA SmartPay® team is focusing on
improvements to these areas:

• Program Controls – Continued emphasis to help prevent and detect
  card fraud and misuse
• Security – Increased emphasis on security of both employee and
  procurement data to minimize the risk to individual cardholders and to
  national security
• Customer Service – Improvements intended to build stronger GSA-
  Agency-Bank relationships



                                                                    12
                 GSA SmartPay® 2
Future Program Development
• Use of Data – Improved access to data and data management tools at
  the agency and government-wide level to support key initiatives such as
  strategic sourcing, risk identification, and general program reporting
• Program Technology – Increased emphasis on technologies for
  account management and streamlining billing and payment processes
  to generate greater cost savings to the government
• Tax Exemption and Reclamation – Technology and support to avoid
  payment of taxes at the point of sale and assist in reclaiming paid taxes




                                                                     13
                 GSA SmartPay® 2
Future Program Development
• Advocacy and Leadership – Increased representation on behalf of
  agencies to the stakeholder community (e.g., oversight agencies,
  Congress) and banks
• Program Flexibility – Providing agencies with flexible options for
  accessing and customizing program offerings to address their unique
  operating needs and issues, including international card use
• Program Education and Support – Providing guidance and training
  on key program issues and enabling forums for the sharing of program
  leading practices among agencies




                                                                  14
                    GSA SmartPay® 2
Future Program Development
•   Support for government-wide initiatives – Providing support for key
    initiatives such as:
      – Strategic sourcing (Leveraging the buying power of the government to
         achieve savings and best value procurements)
      – Shared services (Consolidating administrative activities into a single unit,
         to increase productivity by allowing the core operations divisions to focus
         more of their time on mission)
      – Risk identification and mitigation (Practices that highlight potential areas
         of risk for the card program and proactively address them)
      – Program performance reporting (Collecting and using program data to
         develop reports that measure program performance)




                                                                              15
                GSA SmartPay® 2
Future Products and Services
  The GSA SmartPay® team is also focused on supporting agency needs
  by augmenting standard charge card offerings with new payment
  products and services (card and non card) at the Master Contract Level.
  Examples include:
   – Contactless cards: Standard magnetic stripe card with additional
     integrated circuit chip capabilities and contactless transponder
     technology. Secure, improves speed of transactions, and the card
     does not leave the hand of the cardholder




                                                                   16
                GSA SmartPay® 2
Future Products and Services

  New payment products and services at the Master Contract Level
  (continued):
   – Debit cards: Charge card alternative – processes transaction debits
     against a linked account/fund within established dollar limits. Helps
     to control amount of outstanding credit with cardholders
   – Pre-paid (stored value) cards: Charge card alternative – supports
     the capability to load and reload cards with specific dollar values.
     Cards can be issued with required value on short notice




                                                                    17
                 GSA SmartPay® 2
Future Products and Services
• New payment products and services at the Master Contract Level
  (continued):
   – Cardless accounts: Alternative to plastic – provides established
     vendor-specific charge accounts without physical cards
   – Travelers and convenience checks: Improved ability to issue and
     reconcile checks online, such as:
       • Passing merchant name in transaction data
       • Online imaging of cleared checks
   – Electronic bill payment: Ability for individually billed cardholders to
     pay their accounts online



                                                                      18
                  GSA SmartPay® 2
Future Products and Services

• New payment products and services at the Master Contract Level
  (continued):
   – Improved interface with agency systems: Improved level of
     coordination between bank EAS systems and agency travel
     systems, in addition to financial, and ordering systems. This allows
     the potential for travel systems to coordinate activation of cards with
     the travel authorization process
   – Association program management tools: Vendors will be
     required to offer tools that are provided by associations that support
     program management objectives such as data mining, strategic
     sourcing, etc.

                                                                      19
                                 GSA SmartPay® 2
            FY05                             FY06                    FY07                 FY08            FY09
 Fall        Spring          Fall             Spring          Fall    Spring       Fall     Spring         Fall
2004         2005           2005              2006           2006     2007        2007      2008          2008




  Acquisition Planning
         Phase
  Future program requirements
  Request for Information
  Press release                       Acquisition Management
  Acquisition strategy
                                                 Phase
  Source Selection Plan
                                     Draft Request for Proposals
                                     Request for Proposals
                                     Contract award/s

                                      Transition Planning Phase             Transition Management Phase


                                                                                                     20
                               Transition
            FY06                 FY07                 FY08                FY09
  Fall      Spring      Fall     Spring       Fall     Spring      Fall          Spring
 2005       2006       2006      2007        2007      2008       2008           2009



              Now                 Award
                                 Contracts




• The GSA SmartPay® program office will:
     – Work closely with agencies and banks to facilitate a seamless transition
     – Develop transition planning tools for agency use
     – Establish BPAs for transition support contractors to help agencies in
       transitioning to the new program
     – Plan and prepare for the transition to minimize impact on cardholders



                                                                                  21
                               Transition
           FY06                 FY07                FY08                FY09
  Fall      Spring      Fall    Spring       Fall    Spring      Fall          Spring
 2005       2006       2006     2007        2007     2008       2008           2009



              Now                Award
                                Contracts



• Cardholders should look out for communications with instructions on
  your key responsibilities during the transition, including:
     – Filling out a new card application
     – Activating a new card
     – Destroying your old card and ensuring no transactions continue to be made
       on it (e.g., automatically billed subscriptions)
     – Completing any new training
     – Contacting the A/OPC if you have any issues or questions
     – Ensure that all transactions with your current bank are reconciled

                                                                                22
GSA SmartPay® Program Management
 The GSA SmartPay® program office is committed to
 providing leadership and advocacy to customer agencies
 on regulations and common issues impacting the program,
 such as OMB Circular A-123 Appendix B, Improving the
 Management of Government Charge Programs, which went
 into effect October 1, 2005. The Circular:

 – Consolidates and updates government-wide charge card program
   requirements and guidance issued by various government agencies
 – Outlines requirements affecting all three business lines of the
   government charge card program (e.g., travel, purchase, and fleet)



                                                                23
GSA SmartPay® Program Management
• The Circular (continued):

   – Contains requirements related to many aspects of charge card
     programs (e.g., training, creditworthiness, salary offset, split
     disbursement)
   – Requires agencies to develop a Charge Card Management Plan
       • GSA SmartPay® has developed a Charge Card Management Plan
         Template as a resource for agencies/organizations to utilize as they
         develop their charge card management plans




                                                                           24
GSA SmartPay® Program Management
OMB Circular A-123 Appendix B

• Training
   – The Circular requires that all charge card program participants are trained
     prior to appointment and that all program participants take refresher
     training, at a minimum, every 3 years
   – The Circular also requires that training records be tracked and maintained

GSA SmartPay® Guidance
• The GSA SmartPay® website (www.gsa.gov/gsasmartpay) contains training for
  purchase and travel cardholders
• The GSA SmartPay® team is in the process of updating the training to reflect
  new laws and regulations



                                                                           25
GSA SmartPay® Program Management
OMB Circular A-123 Appendix B
• Creditworthiness
   – The Circular requires agencies to perform credit checks on all new
     cardholders. (The current Circular is based on the FICO scoring system; the
     program office is tracking a new scoring system, VantageScore, which is
     being developed)
   – However, the FY 2006 Transportation, Treasury, and Housing and Urban
     Development Appropriation Bill (TTHUD), signed after the Circular’s
     release, eliminates the requirement for credit checks on centrally billed
     accounts. (Note: It did not eliminate the requirement for credit checks on
     individually billed accounts)

 GSA SmartPay® Guidance
 • The GSA SmartPay® program is coordinating with OMB on behalf of its
   customer agencies regarding the Circular revision


                                                                         26
GSA SmartPay® Program Management
OMB Circular A-123 Appendix B

• Risk Management
   – The Circular requires agencies to implement risk management controls,
     policies, and practices
   – This includes requiring agencies to implement salary offset and split
     disbursement procedures, unless an official waiver is obtained

Salary offset is the collection of an   Split disbursement is the process of
undisputed, delinquent charge card      dividing a travel claim reimbursement
amount via direct deduction from an     between the charge card vendor and the
employee’s payroll disbursement or      traveler, thereby enabling the
retirement annuity on behalf of the     government to pay a portion of the
charge card vendor                      payment directly to the charge card
                                        vendor

                                                                         27
    What Does This Mean for Me?
• Contribute – to the development of the future program. We would
  like to hear from you. Share your cardholder experiences and ideas
  with your AOPC or contact the GSA SmartPay® team

• Stay informed – on the upcoming transition to the future program.
  The following are good sources of information:
   – GSA SmartPay® website at www.gsa.gov/gsasmartpay
   – Statement Inserts
   – Statement Messaging
   – Emails and guidance from A/OPCs




                                                                   28
     What Does This Mean for Me?
• Stay compliant – with the requirements of the program
   – Pay account bills on time
   – Stay current with program training, including the required refresher
     courses (on the GSA SmartPay® 2 website)
   – Use the card in accordance with all agency and government
     guidelines

• Continue – being a good cardholder. Buy right, buy smart




                                                                     29
      Questions and Answers
        David J. Shea CPCM, PMP
          david.shea@gsa.gov
             (703) 605-2867

Provide your feedback and thoughts about the current
   and future program at www.gsa.gov/gsasmartpay,
                         under
  “GSA SmartPay® Program Feedback Form”, or call
                     David Shea



                                                       30

				
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