What’s New with GSA SmartPay®?

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

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

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”)

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

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

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

Program Overview FY05 - $1 billion in spend; 24 million transactions

Program Overview CY Average delinquency rate was 3.35% in FY05, close to that of corporate card programs

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

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

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

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

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

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)

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

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

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

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.

GSA SmartPay® 2 FY05 FY06 FY07 FY08 FY09 Spring 2005 Spring 2006 Spring 2007 Spring 2008 Fall 2004 Fall 2005 Fall 2006 Fall 2007 Fall 2008 Acquisition Planning Phase • Future program requirements • Request for Information • Press release • Acquisition strategy • Source Selection Plan Acquisition Management Phase • Draft Request for Proposals • Request for Proposals • Contract award/s Transition Planning Phase Transition Management Phase

Transition FY06 FY07 FY08 FY09 Spring 2006 Spring 2007 Spring 2008 Spring 2009 Fall 2006 Fall 2007 Fall 2008 Fall 2005 • 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 Now AwardContracts

Transition FY06 FY07 FY08 FY09 Spring 2006 Spring 2007 Spring 2008 Spring 2009 Fall 2005 Fall 2006 Fall 2007 Fall 2008 • 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 Now AwardContracts

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)

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

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 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® program is coordinating with OMB on behalf of its customer agencies regarding the Circular revision 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)

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

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

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

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

What’s New with GSA SmartPay®?