U S General Services Administration GSA Smart Pay

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U. S. General Services Administration GSA Smart. Pay® Program Update GSA Smart. Pay® Training

U. S. General Services Administration GSA Smart. Pay® Program Update GSA Smart. Pay® Training Forum August 4 -6, 2020 David J. Shea, CPCM, PMP Director Center for Charge Card Management

Agenda 1. GSA Smart. Pay®: 21 Years of Supporting Agency Missions • GSA Smart.

Agenda 1. GSA Smart. Pay®: 21 Years of Supporting Agency Missions • GSA Smart. Pay® Program History • Program Statistics • GSA Smart. Pay® Program Growth 2. Maximizing Value of GSA Smart. Pay® • Recent Issues Update • Emergency Response Card Flexibility • President’s Management Agenda • GSA Smart. Pay® Revised Website • Keys to Obtaining Greater Benefits • COVID Micro-Purchase Reporting • GSA Expanded Use Project • Recent Issues/Other News 3. Looking to the Future of GSA Smart. Pay® Payments • GSA Commercial Platform • Travel & Fleet Trends and Opportunities • Products and Services Recap • Case Studies 2

GSA Smart. Pay® Historical Spend and Refunds $30 B GSA Smart. Pay® 2 Begins

GSA Smart. Pay® Historical Spend and Refunds $30 B GSA Smart. Pay® 2 Begins GSA Smart. Pay® 3 Begins Fleet: $29 B $25 B $20 B $15 B $10 B Travel: $155 B Purchase: $368 B Agency Refunds $5 B 19 FY 99 20 FY 00 20 FY 01 20 FY 02 20 FY 03 20 FY 04 20 FY 05 20 FY 06 20 FY 07 20 FY 08 20 FY 09 20 FY 10 20 FY 11 20 FY 12 20 FY 13 20 FY 14 20 FY 15 20 FY 16 20 FY 17 20 FY 18 20 19 $B $5. 0 B $4. 5 B $4. 0 B $3. 5 B $3. 0 B $2. 5 B $2. 0 B $1. 5 B $1. 0 B $0. 5 B $0. 0 B FY Billions $35 B GSA Smart. Pay® 1 Begins Billions Sinception, GSA Smart. Pay® has enabled over $552 B in total spend through 1. 9 B transactions, generating over $4. 4 B in agency refunds through FY 19. 3

FY 19 Program Statistics Spend Total Spend: $32. 5 B 95. 7 M ▲

FY 19 Program Statistics Spend Total Spend: $32. 5 B 95. 7 M ▲ 6. 2% vs. FY 18. ▲ 0. 02% vs. FY 18. Total Refunds: Total Accounts: ▲ 36. 0% vs. FY 18. ▲ 21. 2% vs. FY 18. $422 M Transactions Total Transactions: 4. 3 M Accounts 4

FY 20 YTD Program Statistics Total Spend YTD: $16. 7 B ▼ 3. 33%

FY 20 YTD Program Statistics Total Spend YTD: $16. 7 B ▼ 3. 33% vs. FY 19 YTD Total Transactions YTD: 47. 5 M ▼ 9. 71% vs. FY 19 YTD Note: Data is on a 3 -month delay per DOD. Data as of 4/30/2020. 5

GSA Smart. Pay® Program Growth Smart. Pay® 1 Smart. Pay® 2 Smart. Pay® 3

GSA Smart. Pay® Program Growth Smart. Pay® 1 Smart. Pay® 2 Smart. Pay® 3 Purchase Spend: $158. 7 B $190. 7 B $30. 2 B Travel Spend: $63. 2 B $84. 9 B $10. 9 B Fleet Spend: $9. 0 B $18. 9 B $2. 2 B Total Spend: $230. 9 B $294. 5 B 43. 3 B Total Transactions: 849. 0 M 946. 5 M 123. 4 M $1. 1 B $3. 0 B 635. 6 M Cumulative Agency Refunds: Note: Data is on a 3 -month delay. Data as of 4/30/2020. 6

MAXIMIZING VALUE OF GSA SMARTPAY® 3 7

MAXIMIZING VALUE OF GSA SMARTPAY® 3 7

Key Themes for GSA Smart. Pay® in 2020 1 Agencies continuing to further maximize

Key Themes for GSA Smart. Pay® in 2020 1 Agencies continuing to further maximize program value under GSA Smart. Pay® 3/PMA Cross Agency Priority (CAP) Goals 2 GSA Smart. Pay® Support of Emergency Response 3 Working to Ensure EAS Security and Addressing FY 18 NDAA Section 889 Issues 8

Maximizing Program Use Ø Agency utilization of purchase cards is very high within the

Maximizing Program Use Ø Agency utilization of purchase cards is very high within the micro-purchase threshold Ø FY 19 spend within MPT: $11. 0 billion* Ø FY 19 spend above MPT: $2. 3 billion* Ø As a percentage, total purchase card spend equates to 3 – 4% of typical annual FPDS reported contract obligations Ø Therefore, use of card/carded payment solutions for contract payments appears to offer a significant additional refund opportunity for agencies *Excludes VA Prime Vendor payments 9

President’s Management Agenda Cross Agency Priority (CAP) Goal: Sharing Quality Services (SQS) Leaders: Emily

President’s Management Agenda Cross Agency Priority (CAP) Goal: Sharing Quality Services (SQS) Leaders: Emily Murphy (GSA Administrator), Maria Roat (Deputy Federal CIO, OMB) Challenge: Reduce costs and workload by streamlining administrative activities such as human resources transactions, financial management, contracts, and information technology to reduce costs and increase efficiency. Goal: Deliver technology and process improvements that will improve citizen services. Success Factors: Agencies will use benchmarks from high-performing private sector models to assess overall performance, increase use of targeted solutions, and measure satisfaction with those solutions to make sure they meet needs. More information can be found at: https: //www. performance. gov/PMA. html 10

Sharing Quality Services – GSA Smart. Pay® is one of several programs included under

Sharing Quality Services – GSA Smart. Pay® is one of several programs included under SQS umbrella (Enterprise Infrastructure Solutions, Electronic Records Management, GSA Fleet, etc. ) Goal Statement: Increase use of purchase cards for contract payments and rebates Key Metric: Percent increase in use of and rebates for carded and cardless payments New Agency Management SQS Role: Senior Accountable Point of Contact (“SAPOC”); HQ A/OPCs may be contacted for status info re: agency progress in implementation of purchase card/cardless processes for contract payments. 11

Keys to Obtaining Greater Program Benefits Ø Ensure agency purchase card management policies balance

Keys to Obtaining Greater Program Benefits Ø Ensure agency purchase card management policies balance support for further use with sensible internal controls Ø To start, for contract payments, approach can be as simple as asking the contractor will accept carded payments Ø More comprehensive approach is to conduct Accounts Payable (A/P) reviews at appropriate organizational levels (usually agency HQ will determine) Ø Servicing GSA Smart. Pay® contractor bank will perform at no additional cost Ø Often the start of a larger dialog Ø Coordinate with agency financial staff as needed Ø May involve multiple iterations Ø Will help identify vendor payment inconsistencies as well as vendors which accept the purchase card but aren’t currently paid with one 12

Keys to Obtaining Greater Program Benefits (Continued) Ø Outcomes: Ø Ensure max use of

Keys to Obtaining Greater Program Benefits (Continued) Ø Outcomes: Ø Ensure max use of micro-purchase authority Ø Identify potential contract payment opportunities Ø Payment conversions? Ø Solicitation provision – see FAR 32. 1110(d) Ø Moving to card-based payments could be especially beneficial to small businesses and help with challenges paying contractors on-time Ø Payment from banks generally occurs within 1 to 3 days -- improved cash flow Ø Reduces agency invoice processing load Ø Additional refund opportunity = more for mission 13

Appendix 1: FAR 32. 1110 solicitation provision and contract clauses (d) If payment under

Appendix 1: FAR 32. 1110 solicitation provision and contract clauses (d) If payment under a written contract will be made by a charge to a Government account with a third party such as a Government-wide commercial purchase card, then the contracting officer shall insert the clause at 52. 232 -36, Payment by Third Party, in solicitations and contracts. Payment by a purchase card may also be made under a contract that does not contain the clause at 52. 232 -36, to the extent the contractor agrees to accept that method of payment. When the clause at 52. 232 -36 is included in a solicitation or contract, the contracting officer shall also insert the clause at 52. 232 -33, Payment by Electronic Funds Transfer-System for Award Management, or 52. 232 -34, Payment by Electronic Funds Transfer-Other Than System for Award Management, as appropriate. (Emphasis added) 14

FAR 52. 232 -36 clause 52. 232 -36 Payment by Third Party. As prescribed

FAR 52. 232 -36 clause 52. 232 -36 Payment by Third Party. As prescribed in 32. 1110(d), insert the following clause: Payment by Third Party (May 2014) (a) General. (1) Except as provided in paragraph (a)(2) of this clause, the Contractor agrees to accept payments due under this contract, through payment by a third party in lieu of payment directly from the Government, in accordance with the terms of this clause. The third party and, if applicable, the particular Governmentwide commercial purchase card to be used are identified elsewhere in this contract. (2) The Governmentwide commercial purchase card is not authorized as a method of payment during any period the System for Award Management (SAM) indicates that the Contractor has delinquent debt that is subject to collection under the Treasury Offset Program (TOP). Information on TOP is available at http: //fms. treas. gov/debt/index. html. If the SAM subsequently indicates that the Contractor no longer has delinquent debt, the Contractor may request the Contracting Officer to authorize payment by Governmentwide commercial purchase card. (b) Contractor payment request. (1) Except as provided in paragraph (b)(2) of this clause, the Contractor shall make payment requests through a charge to the Government account with the third party, at the time and for the amount due in accordance with those clauses of this contract that authorize the Contractor to submit invoices, contract financing requests, other payment requests, or as provided in other clauses providing for payment to the Contractor. 15

FAR 52. 232 -36 clause (2) When the Contracting Officer has notified the Contractor

FAR 52. 232 -36 clause (2) When the Contracting Officer has notified the Contractor that the Governmentwide commercial purchase card is no longer an authorized method of payment, the Contractor shall make such payment requests in accordance with instructions provided by the Contracting Officer during the period when the purchase card is not authorized. (c) Payment. The Contractor and the third party shall agree that payments due under this contract shall be made upon submittal of payment requests to the third party in accordance with the terms and conditions of an agreement between the Contractor, the Contractor’s financial agent (if any), and the third party and its agents (if any). No payment shall be due the Contractor until such agreement is made. Payments made or due by the third party under this clause are not payments made by the Government and are not subject to the Prompt Payment Act or any implementation thereof in this contract. (d) Documentation of each charge against the Government’s account shall be provided to the Contracting Officer upon request. (e) Assignment of claims. Notwithstanding any other provision of this contract, if any payment is made under this clause, then no payment under this contract shall be assigned under the provisions of the assignment of claims terms of this contract or the Assignment of Claims Act of 1940 (31 U. S. C. 3727, 41 U. S. C. 6305). (f) Other payment terms. The other payment terms of this contract shall govern the content and submission of payment requests. If any clause requires information or documents in or with the payment request, that is not provided in the third party agreement referenced in paragraph (c) of this clause, the Contractor shall obtain instructions from the Contracting Officer before submitting such a payment request. (End of clause) 16

GSA Expanded Use Project (Internal) Ø GSA Administrator requested CCCM to work with other

GSA Expanded Use Project (Internal) Ø GSA Administrator requested CCCM to work with other GSA organizations to identify opportunities for additional internal use of GSA Smart. Pay® payment solutions Ø CCCM developed a project plan which focused on key GSA organizations most likely to benefit from further purchase card use for both micro-purchases and contract payments Ø The project was divided into two major phases. Phase 1 involved reliance on largely existing policies and purchase card plastic. If successful, phase 2 entails integrating back-end accounts payable systems with bank systems for cardless processing 17

Emergency Card Flexibilities Ø Stafford Act – Increases the Micro-Purchase Threshold (MPT) from $10,

Emergency Card Flexibilities Ø Stafford Act – Increases the Micro-Purchase Threshold (MPT) from $10, 000 to $20, 000 within the United States and to $30, 000 overseas in support of declared contingency operations (note that the Service Contract Labor Standards (SCLS) ($2, 500) and Wage Rate Requirements (Construction) ($2, 000) wage thresholds remain unchanged), excludes services and construction Ø Purchase card transaction maximum amount is $9, 999. 99 for contract payments requires HQ A/OPC advance coordination with contractor bank Ø Note that vendors are generally paid within 1 -3 days Ø Cards are likely to be accepted by new sources 18

COVID Response: Micro-purchase Reporting Support Ø OMB Memo M-20 -21 dated April 10 th,

COVID Response: Micro-purchase Reporting Support Ø OMB Memo M-20 -21 dated April 10 th, 2020 established reporting requirements for micro-purchase requirements in support of the COVID response Ø CCCM worked with contractor banks to establish a COVID micro-purchase reporting capability through their respective Electronic Access Systems (EAS) (Citi Manager/ Access on Line) Ø Use of the EAS for reporting agency COVID related micro-purchase spend is at agency discretion Ø As of the April report, more than $33 M in COVID-related agency micropurchases were reported 19

Other Recent Issues News Ø OMB Circular A-123 Appendix B Revision Ø The revision

Other Recent Issues News Ø OMB Circular A-123 Appendix B Revision Ø The revision was issued August 27 th, 2019 and now requires CFO Act agencies to submit their Narrative & Statistical Reports to GSA (not OMB) in January each year. Smart Bulletin No. 030 addresses this requirement. Ø Multi-Factor Authentication Implementation Ø Implementation is well underway Ø Section 889 Ø Part “B” becomes effective August 13 th, 2020. Involves contractor banks representing whether or not they use “covered” technology in providing services. Interim FAR rule expected to be published in July. 20

GSA Smart. Pay® Website CCCM’s GSA Smart. Pay® redesigned website became operational May 1

GSA Smart. Pay® Website CCCM’s GSA Smart. Pay® redesigned website became operational May 1 st, 2020. Check it out! 21

LOOKING TO THE FUTURE OF GSA SMARTPAY® PAYMENTS 22

LOOKING TO THE FUTURE OF GSA SMARTPAY® PAYMENTS 22

GSA Smart. Pay® 3 Products and Services Recap All Business Lines Ø Ø Ø

GSA Smart. Pay® 3 Products and Services Recap All Business Lines Ø Ø Ø Ø 24 -hour EAS Customer Service Accounts Payable File Review Association Program Management Tools Chip & PIN / Signature Cards Email / SMS Alert Service e. Payables - Supplier-Initiated Payments (SIP) Ghost Card Interchange-Based Government-to- Government (G 2 G) Transactions Mobile Applications Mobile Payments Net Billing Non-Interchange based Government-to- Government (G 2 G) Transactions Real-Time Web Assistance Single Use Account (SUA) Tokenization Virtual Cards Purchase Travel Ø Convenience Checks Ø Declining Balance Cards Ø Foreign Currency Cards Ø Ø ATM Access Declining Balance Cards Foreign Currency Cards GSA Smart. Pay® Tax Advantage Travel Card Account Fleet Ø Fleet specific reports and controls Ø Tier 2 telematics 23

GSA Commercial Platforms Project - A New Buying Channel Ø Section 846 of the

GSA Commercial Platforms Project - A New Buying Channel Ø Section 846 of the FY 18 NDAA required the GSA Administrator to establish a program to procure commercial products through commercial e-commerce portals. The program will be implemented in phases with the objective of enabling Government-wide use of portals Ø The purchase card will be the primary payment method accepted Ø In July 2020, contract awards were made to: Amazon Business, Overstock, and Fisher Scientific Ø URLs are scheduled to be announced late July/early August 2020 Ø Next, a proof of concept is the initial test for the implementation of the Commercial Platform’s program, with a handful of early-adopter agencies

GSA Commercial Platforms Project (continued) Ø Note that all existing micro-purchase regulations and Government

GSA Commercial Platforms Project (continued) Ø Note that all existing micro-purchase regulations and Government purchase card policies continue to apply. This means that buyers need to follow mandatory source requirements, rotate their purchases amongst vendors, etc. Ø GSA hopes to make compliance easier by promoting and highlighting Ability One products, as well as small business vendors. The platforms will also offer additional B 2 B features not offered on their consumer platforms (tax exemption, B 2 B pricing, GSA Smart. Pay® hierarchies, etc. ) Ø To learn more about the Commercial Platforms project, please see the Commercial Platforms group on GSA Interact or feel free to email the program at Section 846@gsa. gov

Travel Card Trends and Opportunities Ø In FY 20, due to COVID-related restrictions, travel

Travel Card Trends and Opportunities Ø In FY 20, due to COVID-related restrictions, travel card spend was below FY 19 levels by as much as 85% Ø While the reduction in spend is moderating somewhat, travel spend is not expected to recover to prior year levels in CY 20 Ø Some agencies are taking this time to continue to evolve their travel card programs. Potential opportunities could include: Ø Virtual travel cards/Tax Advantage Cards Ø Considering travel card use for local travel 26

Fleet Card Trends & Opportunities Ø In FY 20, due to COVID-related restrictions, fleet

Fleet Card Trends & Opportunities Ø In FY 20, due to COVID-related restrictions, fleet card spend was below FY 19 levels by as much as 40% Ø While the reduction in spend is moderating somewhat, fleet spend is not expected to recover to prior year levels in CY 20 Ø Potential opportunity: Ø Has your agency considered telematics for agency-owned assets? Ø Your servicing bank, under Tier 2, may offer telematics, a vehicle tracking technology to assist fleet managers in identifying potential misuse by tracking vehicle location, fuel use and fuel prices by location 27

CASE STUDIES 28

CASE STUDIES 28

Case Study #1 Ø An A/OPC sees the following transaction on a purchase card:

Case Study #1 Ø An A/OPC sees the following transaction on a purchase card: Cardholder Name: Cardholder XYZ Acct #: 1234 -56 XX-XXXX-7890 Case ID Transaction Date Amount MCC 1234567 2020 -04 -10 $709. 19 5812 MCC Merchant Description EATING PLACES AND DENNY’S RESTAURANTS 29

Case Study #1 Questions: Ø What seems questionable about this transaction? Ø Are all

Case Study #1 Questions: Ø What seems questionable about this transaction? Ø Are all restaurant purchases on purchase cards questionable, why or why not? Potential approaches: Ø Contact cardholder for additional details Ø Other thoughts or ideas? 30

Case Study #1 Solution: Ø A transaction made on a purchase card at a

Case Study #1 Solution: Ø A transaction made on a purchase card at a restaurant may initially look questionable, as purchase cardholders do not typically make restaurant buys Ø In this case, the payment was appropriate as the agency was purchasing hand sanitizer from Denny’s due to a COVID-19 related shortage 31

Case Study #2 Ø An agency’s use of a GSA Smart. Pay® contractor-provided data

Case Study #2 Ø An agency’s use of a GSA Smart. Pay® contractor-provided data mining system identifies the following purchase card transaction as questionable: Cardholder Name: Cardholder XYZ Acct #: 2345 -67 XX-XXXX-8910 Case ID 10111213 Transaction Date 2020 -05 -20 Amount Merchant $234. 00 AMERICAN BAR ASSOCIATI 32

Case Study #2 Questions: Ø What about this transaction appears questionable? Ø Why did

Case Study #2 Questions: Ø What about this transaction appears questionable? Ø Why did the data mining system identify it? Potential approaches: Ø Contact the cardholder for more information Ø Other thoughts or ideas? 33

Case Study #2 Solution: Ø This is an example of a “false positive” result

Case Study #2 Solution: Ø This is an example of a “false positive” result Ø A transaction with the word “bar” was detected due to oversight criteria Ø The transaction was appropriate as the word “bar” in this instance refers to the exam lawyers take in order to practice (of course, agency policy would need to permit this expense/payment) 34

Questions? 35

Questions? 35

Thank you for your time and attention! Questions? david. shea@gsa. gov GSA Smart. Pay®

Thank you for your time and attention! Questions? david. shea@gsa. gov GSA Smart. Pay® central mailbox: gsa_Smart. Pay@gsa. gov GSA Smart. Pay® website: smartpay. gsa. gov 36