Government Purchase Cards

The Government Purchase Card is a charge card issued under the GSA SmartPay program. It gives DAF organizations a way to buy supplies, services, and construction projects without going through the full contracting process every time. The program replaces the old paper-based purchase order process, reduces procurement lead time, and cuts down on office workload.

Contracting authority flows from SAF/AQC down to the Head of Contracting Activity (HCA), then to local procurement offices. The Chief of Contracting delegates authority to cardholders (CHs) and convenience check account holders through the Delegation of Contracting Authority Letter in JAM (the Joint Appointment Module in PIEE). Cardholders must countersign to acknowledge this responsibility, and misuse of the card by military members is a violation of Article 92 of the UCMJ.

The DAF uses a "pay and confirm" process. Payments must be certified within five calendar days of receipt of supplies or services. This is how the DAF earns rebates from the card program. Faster certification means more rebates flowing back to the Air Force.

FAR 13.301 authorizes three uses of the GPC. Most people only think about the first one, but the second and third uses are where the real efficiency gains are hiding.

Use 1: Micro-purchases (FAR 2.101). This is what everyone thinks of. Buying supplies or services at or below the micro-purchase threshold (MPT). Below the MPT, purchases are exempt from the Competition in Contracting Act, Buy American Act, Economy Act, Service Contract Labor Standards Act, Wage Rates Requirements Act, and the Small Business Set-Aside Program. Swipe the card, buy the thing, document it. Straightforward.

Use 2: Placing orders. The GPC can be used to place task or delivery orders against existing contracts, ordering agreements, or blanket purchase agreements, if the basic contract authorizes it. This is "expanded use," and it means your cardholders can place orders against pre-priced vehicles up to the simplified acquisition threshold (SAT), not just the MPT.

Use 3: Making payments. The GPC can be used as a payment method on any contract where the contractor agrees to accept it. This is the use that most offices forget about entirely, and it is arguably the one with the most potential for saving time and money.

The GPC program operates on a six-level hierarchy. You will hear people refer to roles by their level number, so it helps to know the structure:

• Level 1 - OSD/DPC (the Purchase Card Program Office). Sets DoD-wide policy.
• Level 2 - Component Program Manager (CPM), appointed by SAF/AQC. Oversees the DAF GPC program.
• Level 3 - Oversight A/OPC (MAJCOM/DRU level). Manages GPC at the command level.
• Level 4 - A/OPC (installation level). Your local program coordinator. Must be a 1102, 6C0X1, or 64PX.
• Level 5 - Approving Official (AO). Reviews and approves cardholder transactions.
• Level 6 - Cardholder (CH). The person swiping the card.

When something goes wrong or you have a question, work your way up: CH asks the AO, AO asks the A/OPC, and so on. All appointments are managed through JAM in PIEE.

DAFI 64-117, Chapter 8 has a long list of prohibited purchases. Here are the ones you are most likely to encounter or be tempted by:

• Split purchases to stay under the MPT. If you know the total requirement exceeds the threshold at the time of purchase, it cannot be broken into smaller transactions.
• Cash advances, money orders, wire transfers, travelers' checks, gift cards, or gift certificates. Anything that looks like cash.
• Services over $2,500. The Service Contract Labor Standards Act kicks in at $2,500, so services above that threshold need a contract, not a card swipe.
• Construction over $2,000. Davis-Bacon applies above $2,000 for construction.
• Travel expenses. Airline tickets, fuel, lodging, meals, rental cars. That is what the Government Travel Card (GTC) is for.
• Personal use of any kind. This should go without saying.
• Food and meals. Generally prohibited, with narrow exceptions for official functions.
• Weapons, ammunition, and explosives. Those go through Army contracting via MIPR.
• Video surveillance cameras. Prohibited per DAFI 64-117.
• Preferred use memberships like Amazon Prime or wholesale clubs.
• Kaspersky Lab products. Prohibited by FAR 13.201.
• Recurring services that exceed the MPT per fiscal year. If services recur and the annual total exceeds the MPT, it needs a contract.

There are more, but those are the ones new folks run into. When in doubt, check with your A/OPC (Level 4) and legal. All exceptions require consultation with legal counsel, the HCA, and the Financial Manager, documented on a per-transaction basis.

Every GPC transaction needs to be documented in the electronic order management log provided by the bank at the time of purchase. Keep your receipts, invoices, shipping documents, receiving reports, and any special approvals in the log and available for end-of-cycle review by the AO and the A/OPC.

Purchases above the MPT but below the SAT are reserved exclusively for small business. If the CH cannot find a small business to meet the requirement, they refer it to the servicing contracting office. Before any purchase over MPT, the CH must confirm the vendor's size status through System for Award Management and keep that verification in the file.

The CH is also responsible for getting a reasonable price. Use price comparisons and market research per FAR Part 10. Request discounts. When overseas, use available prices from existing schedules, other overseas merchants, or commercial sources.

This is where the GPC gets interesting, and where most offices leave money on the table. There is a Tactics, Techniques, and Procedures (TTP) guide published in October 2021 that lays out the case for using GPC as a contract payment method instead of defaulting to DFAS for every invoice. The TTP is not official policy, but it shows how GPC can be used more efficiently.

Here is the math. Say a contracting officer has a portfolio of 10 simplified acquisition threshold contracts. Each contract gets paid monthly. Going through DFAS, that is 120 payment transactions per year. DFAS charges between $5.58 (DEAMS certified) and $15.47 (manual processing) per payment. Over five years, DFAS fees alone run between $3,345 and $9,282.

If those same contracts are paid by GPC, DFAS only charges about $0.55 per transaction (12 consolidated payments per year instead of 120 individual ones). On top of that, the unit earns rebates from US Bank at roughly 1.5% of the transaction value. The TTP estimates a net gain of over $37,000 per unit over five years on just those 10 contracts, and nearly $187,000 across a five-year window when you factor in cumulative rebates.

Beyond the dollars, GPC payments are faster and more controllable. Prompt payment terms become easier to meet, which reduces the risk of interest penalties. Small businesses get paid quickly, which makes them more willing to compete for your requirements. And it aligns how the Government pays with how commercial industry already operates.

When it does not work: Some contractors do not accept credit cards or charge fees that eat into the savings. Complex invoicing structures (partial payments, progress payments) are not a good fit. Contracts paid by GPC must be fully funded; progress or finance payments are not authorized. The organizational factors matter too: you need a willing AO and CH, separation of duties between the certifier (FM), obligator (CO), receiver (customer), and payee (CH), and close coordination with your Resource Advisor.

Convenience checks are a last resort, used only when the GPC is not feasible and the activity has determined that checks are the most advantageous option. Before issuing a convenience check, the requiring organization must document their effort to find a merchant that accepts the GPC.

Convenience checks cannot exceed one half of the MPT. The check writer is appointed by the contracting commander via a Delegation of Contracting Authority Letter, similar to a cardholder. Organizations are limited to one convenience checking account per organization, and the account requires yearly justification from the commander.

All of the same prohibitions and controls that apply to the GPC also apply to convenience checks. US Bank applies fees to convenience checks, so the CH and AO need to factor those into the total cost of the purchase.