GOVERNMENTWIDE COMMERCIAL PURCHASE CARD GPC PROGRAM POLICIES DIRECTIVES

GOVERNMENTWIDE COMMERCIAL PURCHASE CARD (GPC) PROGRAM POLICIES & DIRECTIVES SHEILA MCGLYNN & DENISE REICH OFFICE OF THE UNDER SECRETARY OF DEFENSE (OUSD) ACQUISITION & SUSTAINMENT (A&S)—USED TO BE AT&L DEFENSE PROCUREMENT AND ACQUISITION POLICY (DPAP)—SOON TO BE DEFENSE PRICING AND CONTRACTING (DPC) PROGRAM DEVELOPMENT AND IMPLEMENTATION (PDI) AUGUST 2018

COURSE DESCRIPTION • This session provides an overview of topical issues related to Department of Defense (Do. D) policies, procedures and directives. 2

ACRONYMS CLIN CO Do. D FPI FMR GPC Guidebook IOD JAM MPT PAT PBIS PCOLS PCOM PIEE SAM SAP/SAT STRL Ts&Cs WAWF Contract Line Item Number Commanding Officer Federal Prison Industries (also known as UNICOR) Do. D Financial Management Regulations Governmentwide Commercial Purchase Card Do. D Charge Card Guidebook for Establishing & Managing Purchase, Travel & Fuel Card Programs - Effective 1 October 2017 New Release Dated January 24, 2018 Insights On-Demand Joint Appointments Module Micro-Purchase Threshold Program Audit Tool Procurement Business Intelligence Service Purchase Card On Line System Purchase Card Oversight Module Procurement Integrated Enterprise Environment System for Award Management https: //www. sam. gov/portal/public/SAM/#1 Simplified Acquisition Procedures / Simplified Acquisition Threshold Science and Technology Reinvention Laboratories Terms and Conditions Wide Area Workflow 3

AGENDA 1. Smart. Pay® 3 Task Orders and Transition Tasks 2. Do. D Reporting Update 3. Strategic Sourcing Update 4. SP 3 and Life After PCOLS and PAT – Do. D PIEE Hierarchy – JAM – GPC Oversight Module 5. MPT Class Deviation Updates 4

Army/Air Force/Defense Agencies (A/AF/DA) and Navy Smart. Pay® (SP) 3 Task Orders

STATUS OF SMART PAY 3 ARMY/AIR FORCE/DEFENSE AGENCIES AND NAVY TASK ORDERS • U. S. Bank competitively awarded two Do. D Tailored Task Orders (TTO) under GSA master contract GS-36 -F-GA 001: - A/AF/DA awarded on 21 June 2018 - Navy awarded on 12 July 2018 - Mastercard selected as Card Association under both TTOs - Mastercard/Insights on Demand (IOD) selected as Data Mining (DM) solution under both TTOs - DM continues in Purchase Card On-Line System [A/AF/DA] and Program Audit Tool [Navy] until end of SP 2 [29 November 2018] - IOD to be used for DM Department-wide throughout SP 3 transactional period [beginning 30 November 2018] 6

REQUIREMENTS UNDER SP 3 A/AF/DA AND NAVY TASK ORDERS • Both TTOs have: - 13 year maximum transactional period of performance (4 year base period; three 3 year option periods) Ø SP 2 Accounts no longer Valid: November 29 @ 11: 59 pm Ø SP 3 Accounts Active: November 30 @ 12: 00 am - Tailored refund calculations - Tailored Do. D Procurement Integrated Enterprise Environment (PIEE)/Joint Appointment Module (JAM) requirements - Tailored financial management and other system interface requirements - Tailored reporting requirements - Tailored Electronic Access System - Tailored Data Mining (DM) requirements Ø DPAP worked with Services to review data mining rules to determine which to include in SP 3 to improve identification of infractions ü Included selected business rules in A/AF/DA and Navy SP 3 task orders ü Established semi-annual governance process for reviewing/updating rules as necessary 7

HOW REFUNDS WILL CHANGE UNDER SMARTPAY 3 TASK ORDERS • SP 2 - Complex calculations to account for separate sales and productivity refunds • SP 3: - - Combined refund rates, taking into account sales volume and speed-to-pay Separate “Standard” and “Large Ticket” transaction refund CLINs Lower SP 3 refunds will be paid for Large Ticket transactions, based on applicable lower interchange fees. Master contract does not provide a dollar threshold for large ticket items. Currently, for Mastercard, large ticket transactions apply to non-travel card transactions that provide Level 3 (Line Item detail/SKU) data and are over $7, 255 for domestic US transactions. Speed-to-pay accounted for via refund basis points “day-banding” for all Standard and Large Ticket Transaction CLINs Anticipated that throughout SP 3 transactional period, DPAP will require components to certify the accuracy of their Quarterly refund statements from US Bank. 8

HOW REFUNDS WILL CHANGE UNDER SMARTPAY 3 TASK ORDERS (CONT) • Day-bands for Standard and Large Ticket Transaction CLINs: * - A/AF/DA TTO: - Navy TTO: o 0 – 8 Calendar Days** o 9 – 19 Calendar Days o 20 – 30 Calendar Days o 31+ Calendar Days o 0 – 8 Calendar Days** o 9 – 15 Calendar Days o 16 – 22 Calendar Days o 23 – 29 Calendar Days o 30 – 43 Calendar Days o 44 – 50 Calendar Days o 50+ Calendar Days *Separate basis points for each day band applicable for standard versus large ticket transactions. **Calendar days from statement date, with clock starting with accessibility of invoice in EAS/delivery of the file to ERP Note: SP 3 refund process has no effect on reconciliation and certification process/timeline: 1) CH must reconcile and certify monthly Statement of Account -- best practice: within 3 business days of billing cycle end date to maximize refunds and prevent interest penalties. 2) AO must promptly review and certify CH statements of account -- best practice: within 5 days of the billing cycle end date. 9

SP 3 Transition Tasks for Program Officials 10

PRIOR TO 29 NOVEMBER 2018 • Card and convenience check holders: - Follow agency policy for disposing of GSA SP 2 cards and unused convenience checks Cancel all recurring charges on SP 2 card Promptly reconcile all transactions Adhere to Charge Card Guidebook and any component record retention policies Activate new account following card receipt Complete all required training Adhere to forthcoming DPAP policy memo on orderly shutdown of SP 2 accounts Submit any dispute or fraud information to US Bank • AO and A/BOs: - Complete all required training Ensure all accounts are reconciled promptly 11

PRIOR TO 29 NOVEMBER 2018 • A/OPCs: - In accordance with forthcoming DPAP instructions, go into Access Online to: Validate SP 2 account Information Validate user ID Information Ensure financial managers validate accounting Information Confirm TBR hierarchy – moving to all new managing and cardholder accounts allows for reorganization for efficiency or functionality o Designate SP 2 accounts for replication [ie: retention in SP 3] or termination o Record SP 3 card delivery instructions if desired o o o Enter “home organization” and “role location” Department of Defense Activity Address Codes (Do. DAAC) - ASAP work with your Group Administrator (GAM) to validate your PIEE hierarchy - If you don’t yet have one, create WAWF/PIEE account - Complete all required training 12

Do. D Reporting Update 13

DOD REPORTING UPDATE • Issued “Do. D GPC Disciplinary Category Definitions Guidance Memo” in July 2017 to eliminate reporting inconsistencies within the Department. Memo: – Provided interim definitions and examples of categories (abuse, internal fraud, misuse, and delinquency [violations], administrative discrepancy, and external fraud) – Required Quarterly and Semi-annual reporting to OMB on the 4 violation categories • Updates: – DPAP’s Quarterly & Semi-Annual Reporting Guidance updated based on OMB’s 2017 memo M-17 -26, “Reducing Burden for Federal Agencies by Rescinding and Modifying OMB Memoranda” o Memo made Quarterly Statistical Reporting “optional and not required to be submitted to OMB” o As memo requires Do. D “to maintain statistical and narrative information for their own use and management of their charge card program, ” DPAP still collects Quarterly and Semi-Annual data from components, but no longer forwards data to OMB – Under the SP 3 transactional period, components will be required to report to DPAP on all 6 disciplinary categories, beginning: o Quarterly – FY 19 Q 2 o Semi-Annual – FY 19 Q 1 -Q 2 – Work continues to automate Do. D Reporting within Procurement Business Intelligence Service Above actions responsive to Do. D IG Audit D 2017 -D 000 CL-0045 14

Strategic Sourcing Update 15

STRATEGIC SOURCING UPDATE • In response to GAO-16 -526, “GOVERNMENT PURCHASE CARDS: Opportunities Exist to Leverage Buying Power, ” dated May 19, 2016: - DPAP issued September 2016 guidance memorandum entitled "Opportunities to Leverage Buying Power with Purchase Cards" requiring Do. D Components to implement GAO's recommendations. Actions taken to implement memo: o DFARS 213. 301 updated to include DPAP memo requirements; went into effect 1 October 2017 o During 2017, components conducted purchase card spend analysis, identified possible savings, and made broader applicability determinations; Services briefed DPAP Acting Director on findings o Purchase card strategic sourcing language drafted by DPAP and forwarded to Defense Contract Management Agency for incorporation into Program Management Review Manual; Manual updated in April 2018 16

STRATEGIC SOURCING UPDATE (CONT) • Based on actions taken, DPAP memo “Recommendation Closure Request on GAO report, GAO-16 -526, ‘Government Purchase Cards: Opportunities Exist to Leverage Buying Power, ’ May 19, 2016” signed June 27, 2018, recommended closure of report recommendations pertaining to Do. D GPC. Actions for Components going forward: - Components shall periodically analyze purchase card transaction data and spend patterns to identify opportunities to obtain savings - Components shall periodically determine the feasibility for broader application of these efforts across the agency - Be prepared to address the following during PMRs: o Has the agency periodically analyzed purchase card transaction data and spend patterns to identify opportunities to obtain savings? o Has the agency periodically determined the feasibility for broader application of these efforts across the agency? 17

SP 3 and Life After PCOLS and PAT 18

Procurement Integrated Enterprise Environment (PIEE) WAWF rebranded as PIEE Adding GPC Applications 19

PIEE Overview 20

Smart. Pay® 2 » Smart. Pay® 3 System Transition Hierarchy EMMA TBR » PIEE TBR Delegation & Appointment PCOLS EAS Paper » JAM TBR Data Mining PCOLS » » PAT EAS IOD EAS PCOLS » PCOM EAS IOD Reporting PCOLS EAS PAT EAS » PIEE PBIS EAS DM Account Issuance & Maintenance PCOLS » » PIEE EAS EAS Oversight EAS PAT System Access Invoice Certification & Payment EAS ERPs Accounting Systems » Archive EAS DMDC » PBIS EAS 21

GETTING READY FOR THE PIEE HIERARCHY • All Component’s have an existing PIEE Hierarchy – Already agreed to and “fixed” through Level 3 • Defense Agency GPC Level 3 s moved to Level 2 Component Program Managers (CPMs) – Component Group Administrators (GAMs) “own” and are responsible for coordinating changes at Level 4 and below – U. S. Bank required to report up the PIEE hierarchy • All A/OPCs must work with their local PIEE GAM now to: – Understand their Component’s hierarchy – Identify Home Organization Do. DAACs for the organizations they support • SP 3 Transition offers A/OPCs the opportunity to evaluate and update their TBR Hierarchies to support reporting needs – Engage your Component Financial Manager and U. S. Bank Customer Relationship Manager – Finalize changes NLT 15 September to support SP 3 Card Issuance 22

Do. D Activity Address Code (Do. DAAC) • Accurate Do. DAAC entry by all users during PIEE registration is ESSENTIAL for successful deployment. • A Do. DAAC is a Do. DAAC, but one Do. DAAC can be flagged to identify its different attributes (e. g. , Procurement, Ship to, Funding) • For GPC Program purposes there are 3 Do. DAAC “types” to focus on: - Home Organization Do. DAAC – “I physically sit here” - Role Location Do. DAAC – “I perform my duties here” - Authority Location Do. DAAC – “I got my appointment from here” • All delegations of authority must emanate from an organization that has procurement authority, but PIEE will not enforce this until a later date. And I’m Wanda. Hi! I’m Dave. We’re going to help you understand Do. DAACs. 23

Do. DAACs 24

GETTING READY FOR THE JOINT APPOINTMENTS MODULE (JAM) • Will be used to issue GPC Delegation of Authority & Appointment Letters and Certifying Officer Appointments Phase 1 Component PM , Oversight A/OPC (With or Without Delegating Authority), A/OPC (With or Without Delegating Authority) Phase 2 Approving Official, A/BO, Cardholder, GPC Certifying Officer – CH single purchase limit in the EAS will be capped by JAM delegated limit • All A/OPCs must: Request PIEE Access (~45% of A/OPC already have PIEE accounts) Work with their local PIEE GAM to establish GPC access protocols Identify Home Org Do. DAACs 1 for each organization to which they provide GPC accounts Identify the Home Org Do. DAAC 2 for person who will sign their GPC Delegation or Appointment Letter – PCOLS Active Account Data will be used to assist with migration – – • Account and Training Data 1 This is YOUR Role Location Do. DAAC 2 This is YOUR Authority Location Do. DAAC 25

GPC DATA MINING AND OVERSIGHT • Transactions will be referred to the A/BO daily – Timely completion of Questionnaire required – Delayed responses will result in automatic account suspensions • A/OPC required to: – Validate review 100% of DM cases and enter corrective action taken for all cases of improper GPC use. Work with Supervisors as appropriate. – Open DM cases for all improper GPC use otherwise identified. Supports automated GPC “Violations” Reporting. – Brief Commander every 6 months to obtain signature of Semi-Annual PMR Report • Oversight A/OPCs required to: – Review Closed Cases, and Monthly and Semi-Annual PMR Reports – Brief Commander every 6 months to obtain signature of Semi-Annual PMR Report • CPM required to: – Review Closed Cases, and Monthly and Semi-Annual PMR Reports – Brief Commander every 6 months to obtain signature of Semi-Annual PMR Report 26

Planned GPC Oversight Process Policy Not Yet Finalized

Daily DM Case Reviews Purpose: • Detect/Prevent Improper GPC Use • Document Corrective Actions Players: • A/BOs & AOs • A/OPCs • Supervisors Process: • Insights On-Demand (IOD) Flags Transactions for Review • A/BOs Review & Close Cases • A/OPC Verify All A/BO Results & Document Corrective Action • Supervisor & A/OPC collaborate to take Personnel Action As Necessary Product: • Closed Cases / Corrective Action Monthly PMRs Purpose: • Document Oversight Actions • Review Internal Controls • Ensure DM Case Closure • Engage Supervisors Players: • Supervisors • A/OPCs • OA/OPCs esult R s e s Ca Open tomatic s In Au spension nt Su u o c c A Process: • A/OPC: - Verifies 100% DM Case Closure - Reviews Key Internal Controls - Documents Findings (+ / -) • OA/OPC - Reviews A/OPC Submissions • Supervisors - Reviews Summary Data - Affirm Accounts Needed Product: • Monthly PMR Report Semi-Annual PMRs Purpose: • Ensure Leadership Insight • Enable Organizational / Strategic Decision Making Players: • A/OPCs • OA/OPCs • CPMs • Commanding Officers (COs) / Procurement Leads / SPEs • DPAP Process: • COs at Each Level Receive Program Briefings from their A/OPCs, OA/OPCs or CPMs and Sign-Off • A/OPCs, OA/OPCs or CPMs Affirm Completion • CPMs Provide Brief to DPAP Product: • Semi-Annual PMR Report Quarterly Data Mining Case Validation Reviews Procurement Management Reviews / Internal Control Reviews / IG Reviews

PLANNED QUARTERLY DM CASE VALIDATION REVIEWS • Purpose: - Independent validation that A/BO, AO and A/OPC’s are doing due diligence when conducting GPC DM Case Reviews and Documenting Corrective Action Taken (i. e. , Confirm/Refute case disposition status) • Players: - GPC Subject Matter Experts (SMEs) identified by OSD & Components to serve for fixed terms • Process: - A system-generated, statistically significant random sample of closed DM Cases will be reviewed by a SMEs quarterly - Each improper/questionable case closure finding will be referred back to the Component Program Manager (CPMs) for action (e. g. , refer back to A/OPC or perform independent review). • Product - A/OPCs, OA/OPCs and CPMs will address resolution for improper/questionable case closure findings during Semi-Annual PMR Briefings. 29

Micro-Purchase Threshold Class Deviation Update 2018 -O 0013 of 4/13/2018 2017 -O 0007 of 9/1/2017 -O 0006 of 7/21/2017 and 21 July 2017 GPC Policy Memo 30

CLASS DEVIATION 2018 -O 0013 • • Issued 13 April 2018 Creates $10 K (or higher) “Higher Ed” MPT - Supplies or services from: – – • Institutions of higher education Related or affiliated nonprofit entities Nonprofit research organizations Independent research institutes for s i Th tech high ses, a purch -182 F not S ing Train Construction and Services thresholds remain in effect: – Construction 1 ($2, 000) – Services 2 ($2, 500) • Changes the thresholds for small business set-aside from “$3, 500” to "the micro-purchase threshold“ (FAR Parts 13 & 19) NOTE: Cardholders still must comply with FAR Part 8 FPI regulatory requirements between $3, 500. 01 and the MPT Footnotes: 1. For construction acquisitions subject to 40 U. S. C. chapter 31, subchapter IV, Wage Rate Requirements 2. For services acquisitions subject to 41 U. S. C. chapter 67, Service Contract Labor Standards 31

6 1 0 2 3, rs 1 o t h c c Mar d of Dire ar o B 00 I 5 , FP 3 $ er v i a W ect* t e k Blan s in Eff ain m e R Federal Prison Industries (AKA: UNICOR) New GPC Procedures * See https: //www. unicor. gov/Mandatory. Source. Exceptions. aspx 32

FPI PURCHASING DECISION FRAMEWORK CH Receives Requirement Valued Above $3, 500 KO 2 B authorizes Alternate Source? Follow Existing Micro-Purchase Procedures CH 2 A Mandatory FPI Item? 1 Y Market Research indicates comparable? N Y Purchase from FPI N N N Waiver Requested & Granted by FPI? Y Purchase following Micro. Purchase Procedures. If soliciting offers, FPI must be included. Y Make Purchase Following Existing Micro-Purchase Procedures Indicates CH Option 33

FPI PURCHASING DECISION FRAMEWORK - NOTES 1. Check FPI Web Page to determine if: – Do. D Purchases of Mandatory FPI Supplies in FSCs for which FPI's share of the Do. D Market is greater than 5% • https: //www. unicor. gov/Mandatory. Source. Exceptions. aspx#dod – Item that FPI is the mandatory supplier • https: //www. unicor. gov/sop. Alpha. List. aspx 2. A) CH market research indicates; and B) KO issues a written determination the FPI item is not comparable to supplies available from the private sector that best meet the Government’s needs in terms of price, quality, and time of delivery. [FAR 8. 602] 34

MPT Class Deviation Guidance & Implications 35

DOD GPC GUIDANCE • The Guidebook requires spending limits be set considering historical spending patterns to minimize Do. D’s Charge Card violation risk – Raise and then lower Single Purchase Limits for CHs who rarely (or seasonally) make purchases requiring the higher MPT • Only grant authority to CHs who: – are likely to require it – have been trained to follow FPI purchasing and waiver request procedures [FAR 8. 605] • CH Single Purchase Limits can never exceed the CH’s delegated authority – New Delegation Letters must be issued and countersigned as required ingle S s ’ All CH se Limits a Purch NOT Be ld Shou atically m Auto ased Incre cial e p S ated Dedic Account Use ired Requ • Basic Research Program GPC micro-purchases valued above $5, 000 must be made on a CH account issued solely for that purpose • Anticipate Higher Ed MPT will not be used for GPC purchases because Ts & Cs will be required – To comply with DFARS 213. 270 if HCA authorized “higher MPT”, the GPC must be specified as the method of payment and WAWF Receiving Report utilized to document acceptance 36

SUMMARY OF CHANGES FROM CLASS DEVIATIONS 2017 -O 0007 TO 2018 -O 0013 CHANGES • Adds subparagraph (5) to FAR 2. 101 MPT Definition – Aluthorizes$10 K (or higher) MPT for acquisitions of supplies or services from institutions of higher education (20 U. S. C. 1001(a)) or related or affiliated nonprofit entities, or from nonprofit research This is nott hfo r se wi ning u organizations or independent research institutes rai 182 T – DFARS 218. 271 further delegates “Head of the Contracting Activity” authority to increase this MPT— consistent with clean audit findings, an internal institutional risk assessment, or state law SF- • Changes the Small Business Set-Aside thresholds from fixed values to "micro-purchase threshold“ and “simplified acquisition threshold” in FAR Parts 13 & 19 – Eliminates the GPC small business set-asides requirements between $3, 500 and $5, 000 that resulted from the FY 17 NDAA • Raises the Do. D “General" SAT from $150, 000 to $250, 000 – Adds “to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance pursuant to 22 U. S. C. 2292 et seq • Raises the “Humanitarian and Peace Keeping” SAT to $500 K outside the U. S. 37

SIMPLIFIED ACQUISITION THRESHOLD Category Inside U. S. General Do. D SAT Outside U. S. $250, 000 Acquisitions of supplies or services that, as determined by the head of the agency, are to be used to: • Support a Contingency Operation • Facilitate defense against or recovery from the following types of attacks: - Cyber - Nuclear - Biological - Chemical - Radiological • Support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance pursuant to 22 U. S. C. 2292 et seq. • Support a Response to: - Emergency - Major Disaster Support a Humanitarian or Peacekeeping Operation (10 U. S. C. 2302) $750, 000 $1, 500, 000 N/A $500, 000 38

HOW DOES THE SAT IMPACT THE GPC PROGRAM • Contingency Contracting Officers may “use the GPC” up to: - $750 K Inside the U. S. $1. 5 M Outside the U. S. • DFARS 213. 301 (3) A contracting officer supporting a contingency operation as defined in 10 U. S. C. 101(a)(13) or a humanitarian or peacekeeping operation as defined in 10 U. S. C. 2302(8) also may use the Governmentwide commercial purchase card to make a purchase that exceeds the micro-purchase threshold but does not exceed the simplified acquisition threshold, if-- (i) The supplies or services being purchased are immediately available; (ii) One delivery and one payment will be made; and (iii) The requirements of paragraphs (2)(i) and (ii) of this section are met. 39

DFARS 213. 301(2) – GPC USE OUTSIDE THE U. S. (2) An individual appointed in accordance with 201. 603 -3(b) also may use the Governmentwide commercial purchase card to make a purchase that exceeds the micro-purchase threshold but does not exceed $25, 000, if— (i) The purchase— not s e o ARS d to the F D (A) Is made outside the United States for use outside the United States; and hese add t efinition D (B) Is for a commercial item; but MPT (C) Is not for work to be performed by employees recruited within the United States; (D) Is not for supplies or services originating from, or transported from or through, sources identified in FAR Subpart 25. 7; (E) Is not for ball or roller bearings as end items; (F) Does not require access to classified or Privacy Act information; and (G) Does not require transportation of supplies by sea; and (ii) The individual making the purchase— (A) Is authorized and trained in accordance with agency procedures; (B) Complies with the requirements of FAR 8. 002 in making the purchase; and (C) Seeks maximum practicable competition for the purchase in accordance with FAR 13. 104(b). 40

What’s Happening with the MPT? 41

MICRO-PURCHASE THRESHOLDS CURRENT MICRO-PURCHASE THRESHOLDS 1 Non-Do. D Federal-wide Open Market Micro-Purchase 2 Do. D GPC Open Market Micro-Purchase (General) 3 Do. D GPC Open Market Micro-Purchase (STRLs and Basic Research Programs) 4 Federal-wide Higher Education Open Market Micro-Purchase 5 6 7 8 GPC Construction GPC Service Contract Labor Standard Services GPC Contingency (Inside US) GPC Contingency (Outside US) Threshold $10, 000 $5, 000 $10, 000 or Greater $2, 000 $2, 500 $20, 000 $30, 000 42

“CONTINGENCY CONTRACTING” MICRO-PURCHASE THRESHOLDS Category Inside U. S. Outside U. S. Acquisitions of supplies or services that, as determined by the head of the agency, are to be used to: Construction subject to 40 U. S. C. chapter 31, subchapter IV, Wage Rate Requirements (Construction) (41 U. S. C. 1903) • Support a Contingency Operation • Facilitate defense against or recovery from the following types of attacks: - Cyber - Nuclear - Biological - Chemical - Radiological • Support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance pursuant to 22 U. S. C. 2292 et seq. • Support a Response to : - Emergency - Major Disaster Support a Humanitarian or Peacekeeping Operation (10 U. S. C. 2302) $2, 000 $20, 000 $30, 000 Not Addressed 43

FY 2019 NATIONAL DEFENSE AUTHORIZATION ACT CONFERENCE REPORT SEC. 821. INCREASE IN MICRO-PURCHASE THRESHOLD APPLICABLE TO DEPARTMENT OF DEFENSE. (a) IN GENERAL. —Section 2338 of title 10, United States Code, is amended by striking: ‘‘Notwithstanding 5 subsection (a) of section 1902 of title 41, the micro-purchase threshold for the Department of Defense for purposes of such section is $5, 000’’ and inserting: ‘‘The micro-purchase threshold for the Department of Defense is $10, 000’’. G N I D PEN SIONAL RES G N ON CO ACTI NOTE: • Removes STRL and Basic Research Programs language that served as a ceiling • Convenience Check Threshold is $5, 000 44

ANTICIPATED FY 2019 MICRO-PURCHASE THRESHOLDS ANTICIPATED FY 19 MICRO-PURCHASE THRESHOLDS 1 Federal-wide Open Market Micro-Purchase 2 Federal-wide Higher Education Open Market Micro-Purchase 3 4 5 6 GPC Construction GPC Service Contract Labor Standard Services GPC Contingency (Inside US) GPC Contingency (Outside US) ar e H You bout e s a In C thing A e Som This… POSSIBLE FUTURE MICRO-PURCHASE THRESHOLDS Threshold $10, 000 or Greater $2, 000 $2, 500 $20, 000 $30, 000 Threshold GSA e-Commerce Portal (not Fed. Mall or GSA Advantage) $25, 000 45

Do. D Micro-Purchase Regulations 46

WHAT IS A MICRO-PURCHASE (FAR 2. 101)? • Acquisition. gov FAR Site “Micro-purchase” means an acquisition of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold. • Hill AFB FAR Site - Missing Important Words “Micro-purchase” means an acquisition of supplies or services, the aggregate amount of which does not exceed the micro-purchase threshold. • SAP (FAR 13) does not include the following, so they are not micro-purchases: – – – – Placing Orders against Contracts (FAR 16. 5) Placing Orders against GSA Schedules (FAR 8. 405) Purchasing from FPI (FAR 8. 6) Overseas GPC Use up to $25 K (DFARS 213. 301(2)) Contract Payments (FMR) SF-182 Payments (FMR) Intergovernmental Payments (FMR) se a h c Pur not o r c is ing Mi t C n P e G ntm CHs tak i o p Ap for ns. t n e ci tio suffi hese ac t 47

WHAT ARE THE TWO AVAILABLE CONTRACTING AUTHORITIES? • 1. 603 -3 Appointment. (a) Contracting officers shall be appointed in writing on an SF 1402, Certificate of Appointment, which shall state any limitations on the scope of authority to be exercised, other than limitations contained in applicable law or regulation. Appointing officials shall maintain files containing copies of all appointments that have not been terminated. (b) Agency heads are encouraged to delegate micro-purchase authority to individuals who are employees of an executive agency or members of the Armed Forces of the United States who will be using the supplies or services being purchased. Individuals delegated this authority are not required to be appointed on an SF 1402, but shall be appointed in writing in accordance with agency procedures. • 201. 603 -2 Selection. (1) In accordance with 10 U. S. C. 1724, in order to qualify to serve as a contracting officer with authority to award or administer contracts for amounts above the simplified acquisition threshold, a person must— [Education and DAWIA Requirements] • 201. 603 -3 Appointment. (b) Agency heads may delegate the purchase authority in 213. 301 to Do. D civilian employees and members of the U. S. Armed Forces. • This limits Do. D Agency Heads from delegating authority to non-Do. D Federal Employees 48

HOW DO THESE RELATE TO AVAILABLE JAM CARDHOLDER APPOINTMENTS? Authority Type Threshold Warrant Issued? $5 K Contract Ordering Official Cardholder $10 K - but HCA determination can result in higher value (unlimited) $20 K Inside the US $30 K Outside the US $750 Inside the US; $1. 5 M Outside the US Simplified Acquisition Threshold 7 Overseas Simplified Acquisition Cardholder $25 K 8 Contract Payment Official Cardholder Unlimited 9 SF-182 Training Payments Cardholder $25 K 1 Micro-Purchase Cardholder 2 Micro-Purchase Convenience Check Writer 3 Higher Education Micro-Purchase Cardholder 4 Micro-Purchase Contingency Contracting Cardholder 5 Warranted Contingency Contracting Cardholder 6 10 Inter/Intra-Governmental Payment Official Cardholder $24, 999 49

QUESTIONS? http: //www. acq. osd. mil/dpap/pdi/pc/index. html 50

BACK UP 51

GPC Overseas Use up to $25 K

GPC USE OUTSIDE THE UNITED STATES • These GPC purchases are simplified acquisitions, but not micro-purchases • DFARS 213. 301 (2) authorizes GPC CH to use the GPC to make a purchase that exceeds the MPT but does not exceed $25, 000, if— (i) The purchase— (A) Is made outside the United States for use outside the United States; and (B) Is for a commercial item; (C) Is not for work to be performed by employees recruited within the United States; (D) Is not for supplies or services originating from, or transported from or through, sources identified in FAR Subpart 25. 7 [Prohibited Sources]; (E) Is not for ball or roller bearings as end items; (F) Does not require access to classified or Privacy Act information; and (G) Does not require transportation of supplies by sea; and (ii) The individual making the purchase— (A) Is authorized and trained in accordance with agency procedures; (B) Complies with the requirements of FAR 8. 002 [Mandatory Sources] in making the purchase; and (C) Seeks maximum practicable competition for the purchase in accordance with FAR 13. 104(b). 53

GPC USE OUTSIDE THE U. S. – PRICE REASONABLENESS / COMPETITION STANDARD • FAR 13. 104 Promoting Competition (b) If using simplified acquisition procedures and not providing access to the notice of proposed contract action and solicitation information through the Governmentwide point of entry (GPE), maximum practicable competition ordinarily can be obtained by soliciting quotations or offers from sources within the local trade area. Unless the contract action requires synopsis pursuant to 5. 101 and an exception under 5. 202 is not applicable, consider solicitation of at least three sources to promote competition to the maximum extent practicable. Whenever practicable, request quotations or offers from two sources not included in the previous solicitation. 54

OVERSEAS REGULATORY RELIEF FOR DFARS 213. 301(2) GPC PURCHASES • Subpart 4. 11—System for Award Management – CH reaching back to US vendor must verify SAM registration • Subpart 5. 2—Synopses of Proposed Contract Actions – Synopsis required if soliciting from other than local vendors for purchases > $15 K • Subpart 8. 605—Acquisition from Federal Prison Industries, Inc. – Do not need to purchase or request waiver from FPI when the supplies are acquired and used outside the United States • Subpart 9. 1—Responsible Prospective Contractors – Applies unless it conflicts with local law or customs • Part 19—Small Business Programs Small Business Set-Aside requirements not applicable – This part, except for Subpart 19. 6*, applies only in the United States or its outlying areas. Subpart 19. 6 applies worldwide. – If reaching back to U. S. above the MPT, it must be set aside for small business. * Certificates of Competency and Determinations of Responsibility 55

6 1 0 2 3, rs 1 o t h c c Mar d of Dire ar o B 00 I 5 , FP 3 $ er v i a W ect* t e k Blan s in Eff ain m e R Federal Prison Industries (AKA: UNICOR) Detailed Slides * See https: //www. unicor. gov/Mandatory. Source. Exceptions. aspx 56

FPI PURCHASING DECISION FRAMEWORK CH Receives Requirement Valued Above $3, 500 KO 2 B authorizes Alternate Source? Follow Existing Micro-Purchase Procedures CH 2 A Mandatory FPI Item? 1 Y Market Research indicates comparable? N Y Purchase from FPI N N N Waiver Requested & Granted by FPI? Y Purchase following Micro. Purchase Procedures. If soliciting offers, FPI must be included. Y Make Purchase Following Existing Micro-Purchase Procedures Indicates CH Option 57

FPI PURCHASING DECISION FRAMEWORK - NOTES 1. Check FPI Web Page to determine if: – Do. D Purchases of Mandatory FPI Supplies in FSCs for which FPI's share of the Do. D Market is greater than 5% • https: //www. unicor. gov/Mandatory. Source. Exceptions. aspx#dod – Item that FPI is the mandatory supplier • https: //www. unicor. gov/sop. Alpha. List. aspx 2. A) CH market research indicates; and B) KO issues a written determination the FPI item is not comparable to supplies available from the private sector that best meet the Government’s needs in terms of price, quality, and time of delivery. [FAR 8. 602] 58

PURCHASING FROM FEDERAL PRISON INDUSTRIES • Follow FAR 8. 002 - Mandatory Government Sources Priority List (1) Supplies. (i) Inventories of the requiring agency. (ii) Excess from other agencies (see subpart 8. 1). (iii) Federal Prison Industries, Inc. (see subpart 8. 6) (iv) Supplies which are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or Severely Disabled (AKA Ability. One) (see subpart 8. 7). (v) Wholesale supply sources, such as stock programs of the General Services Administration (GSA) (see 41 CFR 101 -26. 3), the Defense Logistics Agency (see 41 CFR 101 -26. 6), the Department of Veterans Affairs (see 41 CFR 101 -26. 704), and military inventory control points. (2) Services that are on the Procurement List maintained by the Committee for Purchase From People Who Are Blind or Severely Disabled (see subpart 8. 7). NOTE: FPI is higher priority for Supplies; Ability. One is higher priority for Services. [FAR 8. 603 & 8. 002] 59

PURCHASING FROM FEDERAL PRISON INDUSTRIES • Purchase from FPI is not mandatory & a waiver is not required if: 1. Acquiring supplies totaling $3, 500 or less [FAR 8. 605(e)] 2. FPI is not a mandatory supplier for the supply being purchased • https: //www. unicor. gov/sop. Alpha. List. aspx 3. For Do. D Purchases of Mandatory FPI Supplies in FSCs for which FPI's share of the Do. D Market is greater than 5% • https: //www. unicor. gov/Mandatory. Source. Exceptions. aspx#dod 4. Contracting Officer determines the mandatory supply is not comparable to supplies available from the private sector that best meet the Government’s needs in terms of price, quality, and time of delivery. [FAR 8. 602] – CH appointed in accordance with FAR 1. 603 -3 are not Contracting Officers 5. The CH requests and FPI grants a purchase waiver [FAR 8. 604] 60

FPI PRODUCT AND SERVICE CATEGORIES Source: https: //www. unicor. gov/Shopping/view. Cat_m. asp? i. Store=UNI 61

MANDATORY FROM FPI? Source: https: //www. unicor. gov/Sop. Alpha. List. aspx 62

DOD 5% MARKET SHARE EXCEPTION LIST (CURRENT ON 7/29/17) Source: https: //www. unicor. gov/Mandatory. Source. Exceptions. aspx#dod 63

FPI GPC PRICE REASONABLENESS / COMPETITION STANDARD • Micro-Purchase Purchasing Guidelines (i. e. , Applicable Competitive Procedures) – Micro-purchases shall be distributed equitably among qualified suppliers – Micro-purchases may be awarded without soliciting competitive quote if cost to solicit offers exceeds expected savings, and the KO or CH considers the price to be reasonable [FAR 13. 203] • CH has recently purchased the item on a competitive basis [reviewed 3 quotes] • CH does not suspect or have information indicating the price may not be reasonable 64

Regulations & Guidance That Often Come Up

FAR 2. 101 “Micro-purchase” means an acquisition of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold. “Micro-purchase threshold” means $3, 500, except it means— (1) For acquisitions of construction subject to 40 U. S. C. chapter 31, subchapter IV, Wage Rate Requirements (Construction), $2, 000; (2) For acquisitions of services subject to 41 U. S. C. chapter 67, Service Contract Labor Standards, $2, 500; and (3) For acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical or radiological attack as described in 13. 201(g)(1), except for construction subject to 40 U. S. C. chapter 31, subchapter IV, Wage Rate Requirements (Construction) (41 U. S. C. 1903)— (i) $20, 000 in the case of any contract to be awarded and performed, or purchase to be made, inside the United States; and (ii) $30, 000 in the case of any contract to be awarded and performed, or purchase to be made, outside the United States. No Change to Construction, Service Contract and Contingency Thresholds 66

FAR 13. 203 - MICRO-PURCHASE GUIDELINES (a) Solicitation, evaluation of quotations, and award. (1) To the extent practicable, micro-purchases shall be distributed equitably among qualified suppliers. (2) Micro-purchases may be awarded without soliciting competitive quotations if the contracting officer or individual appointed in accordance with 1. 603 -3(b) considers the price to be reasonable. (3) The administrative cost of verifying the reasonableness of the price for purchases may more than offset potential savings from detecting instances of overpricing. Therefore, action to verify price reasonableness need only be taken if -(i) The contracting officer or individual appointed in accordance with 1. 603 -3 (b) suspects or has information to indicate that the price may not be reasonable (e. g. , comparison to the previous price paid or personal knowledge of the supply or service); or (ii) Purchasing a supply or service for which no comparable pricing information is readily available (e. g. , a supply or service that is not the same as, or is not similar to, other supplies or services that have recently been purchased on a competitive basis). (b) Documentation. If competitive quotations were solicited and award was made to other than the low quoter, documentation to support the purchase may be limited to identification of the solicited concerns and an explanation for the award decision. 67

FPDS CONTRACT REPORTING DFARS PGI 204. 6 (5) Reporting task and delivery orders where the Governmentwide commercial purchase card is both the method of purchase and payment. (i) Do not report open-market purchases (i. e. , not under a Federal Supply schedule, agreement, or contract) made with the Governmentwide commercial purchase card valued less than the micropurchase threshold to FPDS. (ii) Purchases made using the Governmentwide purchase card as the method of both purchase and payment under federal schedules, agreements, or contracts are required to be reported to FPDS regardless of value. Contracting offices shall ensure all such purchases made by their authorized cardholders are reported to FPDS no less frequently than monthly. Any individual purchase valued greater than $25, 000 must be reported individually to FPDS. For individual purchases valued less than $25, 000, there are three acceptable methods for reporting to FPDS. They are, in preferred order of use: (A) Report each order individually to FPDS; (B) Report a consolidated express report to FPDS using the delivery order or BPA call format that references the individual contract or BPA, respectively; or (C) Report a consolidated express report to FPDS using the purchase order format that uses the generic DUNS 136721250 for ‘GPC Consolidated Reporting’ or 136721292 for ‘GPC Foreign Contractor Consolidated Reporting’, as appropriate, as the identifier. Note that when a generic DUNS number is used to report these actions, only ‘Other than Small Business’ is allowed as the ‘Contracting Officer’s Determination of Business Size’ selection. When the GPC is used solely as a method of payment method against a contract, report the action as any other individual contract action report. Mark ‘Purchase Card as Payment Method’ as ‘Yes’. 68

SF 182 TRAINING REQUEST PAYMENTS GUIDEBOOK A. 1. 3 • • Mandatory: The GPC shall be the method of payment for all commercial training requests using the SF 182, valued at or below $25, 000, in lieu of an employee reimbursement by miscellaneous payment in accordance with the procedures to directly pay the provider in Do. D FMR Volume 10, Chapter 12, Section 120327, and Do. DI 1400. 25, Volume 410. Title 5 U. S. C. , Section 4109 authorizes the head of an agency, under the regulations prescribed in 5 U. S. C. 4118(a)(8), to reimburse employees for necessary training expenses (e. g. , tuition and matriculation fees; library and laboratory services; purchase or rental of books, materials, and supplies; and other services or facilities directly related to employee training). Therefore, training, education, and professional development SF-182 actions are not FARbased transactions. See Do. DI 1400. 25, Volume 410 for additional information regarding the appropriate use of the SF 182. The total price of training authorized by the use of a single SF 182 may not exceed $25, 000 in accordance with Do. D FMR Volume 10, Chapter 12, Paragraph 120327. SF-182 authorized training may be provided by Government or non. Government sources. When training is provided by a non-Government source, in order to be eligible for GPC payment via the SF-182 process it must consist of a regularly scheduled, commercial-off-the-shelf (COTS) course, training conference, or instructional service that is available to the general public and priced the same for everyone in the same category; e. g. , price per student, course, program, service, or training space. Mandatory: If the Government has a need for tailored training materials, the requirement shall be placed on Government contract by a warranted contracting officer. 69