Government Contracts Lawyers Honolulu HI

The Federal government purchases virtually every business product and service imaginable. Most people assume that government contracts are required for each of these purchases, but for the past thirty years, there has been an exception to this: micro-purchases.

Government Micro-Purchases

Since 1988, the United States Federal government has used credit cards for small purchases, known as micro-purchases in government parlance. Micro-purchases at the Federal level are all sales under $3,000 ($2,500 before 2007). The program began as a way to avoid the slow paper-based procurement process for Federal line managers who required products or services quickly.

The first incarnation of the government credit card was the IMPAC card, devised by Rocky Mountain Bankcard. The SmartPay Program replaced the IMPAC program in 1998, and is the program in place today.

Technically there are three types of cards Feds can use: travel, fleet and micro-purchase. The travel card is used for travel-related expenses (airfare, hotel, etc); the fleet card is used when driving a Federal vehicle (gas purchases, etc); and the micro-purchase card can be used with traditional storefronts or web-based businesses.

We will deal here with the micro-purchase card.

SmartPay

First, some quick facts:

• There are 275,000 SmartPay micro-purchase cards currently in use
• There were 25,500,000 purchases made on SmartPay cards in FY 2008
• There was $19.9 billion spent on micro-purchases in FY 2008.

Author: Mark Amtower

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