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Card/Account Holders and Approving Officials Purchase Training

Lesson 3: Preparing to Purchase

I have just been selected to become a GSA SmartPay® Purchase card/account holder. What should I know?

Basic Reminders

  • Your GSA SmartPay Purchase card/account is issued to you for official government business only.
  • The purchase card/account can never be used for personal reasons.
  • Do not share your account information with anyone. Only you are authorized to use the account. This means that no family member or member of your staff, including your supervisor, may use your purchase card/account.
  • Safeguard your purchase card/account information at all times. Unauthorized use of the account due to your failure to secure the account may result in disciplinary action.

Setting Up Your Account

  • The agency/organization program coordinator (A/OPC) for your organization will be the one who sets up your account with the contractor bank and assists you with any specific questions about your account or agency specific policy.
  • To become a GSA SmartPay Purchase card/account holder, your personal credit history is not criteria for receiving a purchase card/account. In addition, use of the purchase card/account will not affect your personal credit history.
  • New applicants should receive their GSA SmartPay Purchase card/account from the contractor bank within 10-14 calendar days from the time the application is submitted by your A/OPC.
  • Replacements for lost, stolen, broken or otherwise unusable cards will be sent within 48 hours of the agency/organization request.
  • In the case of an emergency, such as response to a natural disaster, threat to national security and military mobilization, the contractor bank will send the GSA SmartPay Purchase card/account within 24 hours of the request.

Verifying Your Card/Account

After receipt of your card/account the following steps should be taken:

  • Verify the accuracy of the card/account information (for example, your name and address).
  • Call the toll-free number provided by the contractor bank to confirm receipt and activate the card/account.
  • If you are given a physical card, sign the back of the card.
  • Review the card/account holder guide provided by the contractor bank.

Planning Your Monthly Purchases

As a purchase card/account holder, it is important to carefully plan your monthly purchases. For example:

  • Decide which items are best handled using your purchase card/account and when is the best time to purchase those items.
  • Combine requirements in order to qualify for volume discounts (as long as you remain within the authorized per transaction and monthly spending limits).
  • Make small-scale purchases to avoid wasteful stockpiling.
  • Purchase items in order of priority, where higher priority items are purchased before lower priority items.

Please note that many agencies require card/account holders to obtain management approval before each purchase. Double check your agency policy and plan time for the approval process. Tools to help you request and track approvals are available on the Purchase Publications page of the GSA SmartPay website.

Ensuring Availability of Funds

  • Establish the amount of available funds before making any purchases.
  • Some agencies require card/account holders to verify the amount of available funds before each purchase.
  • Track purchases throughout the month to ensure that there remains sufficient funds available to make all required purchases. Using a system to record purchases and dollar amounts committed can be very helpful in tracking. It will allow you to know at a glance the amount of your unobligated funds or certified fund availability.

Conducting Market Research

  • Market research allows you to make an informed, responsible and reasonable purchase.
  • Do enough market research to ensure that the government gets the best value for its money in terms of a reasonable price and timely, reliable quality service.
  • Each purchase should represent the best value that meets the government’s minimum requirements.
  • Use the Green Procurement Compilation (GPC), a comprehensive green purchasing resource designed for federal contracting personnel and program managers, to identify environmental attributes applicable to your purchase, such as energy efficiency or recycled content. The GPC also identifies GSA Sources (Multiple Award Schedules (MAS) or GSA Global Supply) and links to the GSA Advantage! website.
  • Your contracting activity can assist you with your market research by providing information on required sources of supply, existing contracts, good merchants and support in many other areas.
  • Compare prices and check with your contracting activity to see if there are existing contracts that offer a good price, service and quality. These existing contracts have been negotiated at your agency or by other agencies and can sometimes offer advantages and money savings.

Selecting the Best Value

  • When making micro-purchases, identify the supply or service that best satisfies the requirement, weighing both price factors and non-price factors. For example, you can purchase a higher priced item if it represents a better value. It is your responsibility as the card/account holder to perform basic comparison-shopping and to briefly document the basis for your purchase decisions.
  • Check the vendor’s schedule price list at GSA eLibrary.
  • Check the GPC for life cycle cost information, especially for energy using products.

Seeking State Sales Tax Exemption

  • Each state handles tax exemption a little differently.
  • Be sure to visit the State Tax Information page on the GSA SmartPay website to find out more about requirements in your state.
  • Centrally Billed Accounts (CBAs) are exempt from state sales taxes in every state, but there may be special requirements or required forms in order to obtain state tax exemption in some states.

Talking to Merchants

Create a checklist when talking to merchants and be as specific as possible. Ask about:

  • Price.
  • Shipping costs.
  • Time of delivery.
  • Discounts for government purchases.
  • Merchant’s return policies (if different).
  • Product/service warranty.

How can I ensure that I am getting an accurate quote?

It’s important to ask the right questions before making your purchase. Specifically, double check that the quote includes items like shipping/handling and/or a tax charge (if applicable), so that it matches the invoice when billed. Price differences between quotes and statement amounts cannot be disputed with the contractor bank. You must contact the merchant and ask for a credit if this occurs. The charge must be paid as it stands on your monthly invoice.

What are spending limits and account restrictions?

Spending limits are determined by the agency/organization program coordinator (A/OPC) for each individual account and established when the account is set up. The limits are based on your delegation of authority and the budgetary limits of your office.

There are two types of spending limits applied to the purchase card/account:

  • Single purchase limit - the dollar limit for an individual transaction.
  • Monthly purchase limit - the cumulative dollar limit for purchases in one month. The monthly purchase limit may be set to any dollar amount equal to or greater than the single purchase limit.

Verify both your single purchase limit and your monthly purchase limit with the A/OPC or approving official (AO).

In addition to spending limits, other restrictions such as the number of transactions and merchant category codes (MCC) blocks may apply to your account. A MCC is a four-digit code used to identify the type of business a merchant conducts (such as gas stations, restaurants, airlines, etc). MCCs may be blocked to prevent fraud and misuse.

What should you do if you exceed your spending limit?

Prior to processing your purchase, the merchant will check if the transaction exceeds any spending limits on your account. All attempted transactions that exceed either the single or monthly spending limit will be automatically declined at the POS.

As a card/account holder, it is your responsibility to plan ahead and keep track of how much has been spent against your limit before you make the purchase. Do not rely on the authorization system to do this for you. Reach out to your A/OPC or contractor bank immediately if your account is declined. The contractor banks’ customer service phone numbers can be found on the bank contact page on the GSA SmartPay website and are listed on the back of the charge card.

What is “splitting the requirement”?

It might seem logical for you to divide a purchase into parts so each purchase would then be below your agency limits. But, it is never permissible to intentionally divide purchases into parts just to get under your limits. This is called “splitting the requirement”. When you have a defined need, all the parts of that need are considered one purchase.

For example, Joe, a card/account holder, needs to buy one hundred widgets. The total value of the transaction is above the micro-purchase threshold. In order to make the transaction fit under the micro-purchase limit, he asks the store to split his order into two separate transactions. This action is called a split transaction and is a violation of federal government procurement regulations.


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