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GSA SmartPay2 Master Contract Basics

GSA SmartPay2 Master Contract Basics. Ira Herman John Jerow Office of Charge Card Management (OCCM) 12 th Annual GSA SmartPay Training Conference August 10 – 12, 2010. Value to the Customer. Learn about the GSA SmartPay2 Master Contract Understand key program stakeholders

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GSA SmartPay2 Master Contract Basics

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  1. GSA SmartPay2 Master Contract Basics Ira Herman John Jerow Office of Charge Card Management (OCCM) 12th Annual GSA SmartPay Training Conference August 10 – 12, 2010

  2. Value to the Customer • Learn about the GSA SmartPay2 Master Contract • Understand key program stakeholders • Discuss master contract hot topics and key issues • Find out about general resources • Engage in a question and answer session

  3. Agenda • Knowledge Sharing Activity 4 • Program Background & Basics 5 • Understanding Liability 15 • Program Stakeholders 16 • Hot Topics & Key Issues 23 • General Resources 30 • Question & Answer Session 33

  4. What are your objectives for this session? What issues would you like to discuss? What questions would you like to have answered? Knowledge Sharing Activity In two minutes, write whatever words come to mind when you hear the term GSA SmartPay2 Master Contract 4

  5. Program Background & Basics

  6. GSA SmartPay2 Program Overview DID YOU KNOW… $943 was spent using Federal charge cards every second in FY09 • The GSA SmartPay2 program enables over 350 Federal agencies/organizations to obtain charge card products and services through master contracts thatGSA established with three banks: Citibank, JPMorgan Chase, and U.S. Bank • Agencies/organizations issued task orders against these master contracts to obtain charge card products and services • Agencies/organizations pay no direct fees to use the program • Period of performance for existing contracts is through 2018 6

  7. GSA SmartPay2 Charge Card Benefits • Provides administrative savings and efficiency • In FY09 agencies/organizations avoided $1.5 billion in administrative processing costs using the Purchase Card* • Enables refunds based on dollar volume and payment performance • Productivity refunds: based on the timeliness and/or frequency of payments to the bank (faster payments = higher refunds) • Sales refunds: based on the dollar or spend volume during a specified time period • Utilizes electronic transaction data, enabling better reporting and ability to detect fraud, waste, and abuse; using commercial best practices 7 * Source: Palmer, R., & Gupta, M. (2007). The 2005 Purchasing Card Benchmark Survey Results

  8. GSA SmartPay2 Charge Card Benefits (cont’d) • Improves financial controls • Provides governmentwide transparency to Federal charge card spending, performance, and trends • Enhances government’s negotiation leverage through strategic sourcing of enterprise data 8

  9. Polling the Audience • True of False: My agency/organization has very unique needs, therefore the terms and conditions of the Master Contract can be amended or deleted by a task order contract? True / False ANSWER: FALSE. Contract law dictates that the terms and conditions of a Master Contract cannot be amended or deleted by a task order. However, agencies/organizations may add requirements in their task orders, so long as they fall within the scope of products/services ? 9

  10. Master Contract Basics • The GSA SmartPay2 Master Contract is Fixed Price, Indefinite Delivery/ Indefinite Quantity (ID/IQ), which includes: • Three-year base period (November 2008 to November 2011) • Four-year option (November 2011 to November 2015) • Three-year option (November 2015 to November 2018) 2008 – 2011 (3 year base period) 2011 – 2015 (4 year option) 2015 – 2018 (3 year option) GSA SmartPay2 Master Contract 10

  11. Master Contract Basics (cont’d) • There are four task order types: • Standard – contains the same requirements as the Master Contract • Tailored – includes agency/organization-specific requirements • Tag-along – involves using another agency’s/organization’s task order • Pool – occurs when two or more agencies/organizations collaborate to develop and issue one task order which will meet the multiple agencies’/organizations’ needs

  12. GSA SmartPay Master Contract Before and After • BEFORE • (GSA SmartPay1 Master Contract) • Contracted with five banks • Onsite bank training requirements of 25 A/OPCs • AFTER • (GSA SmartPay2 Master Contract) • Contracted with three banks • Onsite bank training requirements of 20 A/OPCs • Ten Tier 1 & Tier 2 Service Offerings • Better negotiated refunds • Increased capability of EAS systems to provide flexibility in reporting and account management • Increased data requirements (level 3 data) • Enhanced 24/7 customer service

  13. Polling the Audience • How many different payment solutions are included as Tier 1 and Tier 2 products in the GSA SmartPay2 Master Contract? • Four (4) • Five (5) • Eight (8) • Ten (10) ? ANSWER: TEN - Six offered under Tier 1 and four under Tier 2.

  14. GSA SmartPay In More than One Flavor GSA OCCM continues to focus on encouraging smarter use of cards and card-related services to meet the evolving needs of agencies/organizations • Below are a listing of Tier 1 and Tier 2 service offerings listed in the GSA SmartPay2 Master Contract: More information on this topic will be provided during the “GSA SmartPay In More than One Flavor: Innovative Products and Services” (Session 2, Tuesday 12:30pm, Rm C101 and Session 13, Thursday 2:00pm, Rm C101)

  15. Understanding Liability Under the Master Contract, there are two types of accounts: Centrally Billed Accounts (CBAs) and Individually Billed Accounts (IBAs) • CBAs are established for the agency’s/organization’s use* • The agency/organization is liable for payment of all activity on the CBA • IBAs are established for individual travelers and used to pay for official travel and other travel-related expenses** • The cardholder is liable for payment of the IBA • The government reimburses employees only for authorized and allowable expenses • Any amounts charged in excess of the allowable reimbursement are paid out of the employee’s personal funds • In case of misuse or fraud by an unauthorized user with CBAs or IBAs, cardholder liability is limited to $50 *CBAs are generally used for purchase and fleet cards, and sometimes used for travel cards ** IBAs are generally used for travel and integrated cards

  16. Program Stakeholders

  17. GSA SmartPay2 Program Stakeholders Office of Management and Budget (OMB) Perform oversight of the government-wide charge card program Agencies/ Organizations Use charge card products and services to support their missions and operations Office of Charge Card Management (OCCM) Provides overall program management and advocacy MasterCard/ VISA Provides the transaction network for GSA SmartPay2 charge cards Banks Provide charge card products and services through GSA SmartPay2 Master Contracts; partner with MasterCard/VISA to issue cards

  18. Office of Charge Card Management Responsibilities • Provide a comprehensive and flexible Master Contract • Offer strong customer orientation and frequent customer contact/support through: • Test and share best practices • Engage in continuous market research and regular meetings with industry • Deliver “Beyond Plastics” strategy and conferences • Provide balanced customer advocacy and program leadership • Training workshops, guides and Annual GSA SmartPay Training Conference

  19. Polling the Audience • GSA SmartPay2 contractor banks are required to provide continuous product development to fulfill agency/organization needs through innovative solutions? Yes / No ANSWER: YES. Section C.1.7 Card Program Requirements of the Master Contract provides a comprehensive list of contractor bank responsibilities, one of which includes continuous development of innovative solutions. ?

  20. Bank Responsibilities • Contractor banks provide charge card products and services to agencies/organizations through the Master Contract and partner with MasterCard/Visa to issue cards • Provide training and training support • Issue required reports, data analysis, and additional reporting support • Provide assistance with audits and investigations • Provide sales and productivity refunds • Offer commercial billing and automated payment systems • Provide controls for preventing card misuse • Allow the cardholder to view current statements, payment history, and account information to make payments electronically Note: For a complete listing of contractor bank requirements, see section C.1.7 Card Program Requirements of the Master Contract

  21. Polling the Audience • True or False: Cardholders have their own responsibilities for managing their GSA SmartPay2 charge card(s) appropriately. True / False ANSWER: TRUE. As outlined in the Master Contract, cardholders are required to follow specific rules and responsibilities, a number of which are defined in GSA SmartPay cardholder training and agency/ organization specific training. ?

  22. Agency/Organization Responsibilities 22

  23. Hot Topics & Key Issues

  24. Record Retention* • As stated in the Master Contract, contractor banks are required to maintain electronic records of all transactions: • Exceeding $25,000 for 6 years and 3 months after final payment • Less than $25,000 for 3 years after final payment • Final payment is defined as the final payment for the particular charge under each agency’s/organization’s task order • Upon written request of the GSA Contracting Officer, the ordering Contracting Officer, the A/OPC, or the Internal Revenue Service with A/OPC knowledge and approval, the contractor bank shall provide the requested information in an electronic format within 30 calendar days * See section C.3.4 Record Retention Retrieval of the Master Contract for more information

  25. Use of the GSA SmartPay Card Local Travel • Changes to the Federal Travel Regulations (FTR) have been issued to remove references to official government travel. • In accordance with this Direct Final Rule, the effective and applicable date of this change was June 4, 2010 • New optional use of the card for local travel will be for agencies, at their discretion • DoD Joint Travel Regulations already permits use of the Travel Card for local travel expenses • Examples of local travel include but are not limited to taxi fares, public transportation, ferry tickets, etc. • OCCM recommends agencies/organizations develop and issue internal policies addressing oversight and internal controls for managing use of the travel card for local travel Note: See section CT.1.4 Travel Specific of the Master Contract for more details

  26. Beyond Plastics Strategy • OCCM is accelerating the GSA SmartPay2 program into the future of charge card and procurement technology e.g. cardless accounts, closed loop payment systems, etc. • Contractor banks can provide solutions for certain types of transactions (e.g., Government to Government transactions, large ticket transactions) that do not generate interchange and do not produce refunds to the agencies/organizations • These solutions may be priced as a flat fee to the agencies/ organizations • A/OPCs should reach out to their GSA SmartPay point of contact and/or your contractor bank to discuss the potential solutions that are available

  27. Trailing Transactions • The GSA SmartPay1 (SP1) Master Contract expired on November 29, 2008, at which time the contractor banks were required to close out all accounts • Trailing transactions are still occurring for SP1 accounts that have not been closed out, for example: • Recurring charges such as subscriptions can be “forced” through by merchants even though cards are cancelled • Credits that are coming through disputed transactions under SP1 • Close-out means no more activity on the SP1 card (e.g., all payments have been made to the banks, and there are no outstanding charges to the GSA SmartPay1 card, etc.) • Closing out SP1 will not prohibit obligations from being honored – either party can file a claim even thought if the SP1 contract has been closed out

  28. Polling the Audience • What is your satisfaction with your agency’s/ organization's existing task order? A. Unsatisfied B. Neutral C. Satisfied ? Did you know? Agencies/organizations have the ability to modify their GSA SmartPay2 task order.

  29. We are here Upcoming Option Year • The GSA SmartPay2 Master Contract three year base-period will expire in November 2011 • Upcoming four-year option (November 2011 – November 2015) • Agencies/organizations should assess their current GSA SmartPay2 program to determine if your agency/organization is receiving the best value 2008 – 2011 (3 year base period) 2011 – 2015 (4 year option) 2015 – 2018 (3 year option) GSA SmartPay2 Master Contract

  30. Resources

  31. General Resources • GSA SmartPay Website: www.gsa.gov/gsasmartpay • For a listing of definitions as they related to the Master Contract, see section C.1.4 Definitions (available on the GSA SmartPay website) • Federal Acquisition Regulations (FAR): www.acquisition.gov/far • Agency/organization specific policies and established procedures • Bank Contact Info • Citibank: http://www.cards.citidirect.com/welcome.asp 1-800-790-7206 (customer service) • JP Morgan Chase: https://www.paymentnet.com/Login.asp 1-888-297-0781 (customer service) • U.S. Bank: https://access.usbank.com/cpsApp1/index.jsp 1-888-994-6722 (customer service)

  32. Other GSA SmartPay Courses being offered • GSA SmartPay2 Purchase Card Basics • GSA SmartPay2 Fleet Card Basics • GSA SmartPay2 Travel Card Basics • GSA SmartPay Program Update • GSA SmartPay in More than One Flavor: Innovative Products & Services • Conduct Effective Oversight of Your GSA SmartPay Program • Basic Charge Card Payment Reconciliation • Navigating the GSA SmartPay Website

  33. Question & Answer Session

  34. Knowledge Sharing Activity (revisited) Did we answer your questions?

  35. Thank you! Contact Us Ira Herman, ira.herman@gsa.gov or (703) 605-2986 John Jerow, john.jerow@gsa.gov or (703) 605-2980 GSA SmartPay Program Support Phone: (703) 605-2808 E-mail: gsa_smartpay@gsa.gov www.gsasmartpay.gov 35

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