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  • Question

    If a cardholder is placing in excess of $10k in annual FedEx charges on their GPC, are these charges considered a recurring service or can each FedEx charge be considered a separate charge if it is for a different project and would therefore be exempt from a BPA? Where can we find the requirement that addresses the annual recurring service cap of $2,500 for recurring services that are not exempt from the SCA?


    Answer

    See the DoD Government Charge Card Guidebook for Establishing and Managing Purchase, Travel, and Fuel Card Programs, updated Jan 24, 2018. On page 40, A.1.2.4 Prohibited Purchases, para. r, read where it states the GPC cannot be used to purchase services covered under the Services Contract Labor Standards Act (41 U.S.C 67) above $2,500.  Also read in the Guide on Page 63, A.3.6 Approving/Billing Official, para. t, where it states that it's mandatory to “work with cardholders and the local procurement office to identify opportunities to put recurring, repetitive purchases made by the GPC on contract to realize better pricing and satisfy Departmental strategic sourcing goals.”  And, on page 71, A.4.5 Required Sources of Supplies and Services, read where it states that it is mandatory for “cardholders to make their purchases in accordance with the priorities set forth in FAR Part 8, along with use of mandatory or optional FSS, DoD FedMall, GSA Advantage, and commercial sources (including educational and nonprofit institutions).”  I did a quick search on GSA Advantage and was able to find multiple schedules for FedEx as well as UPS and other express carriers.  Finally, on page 71, see A.4.6 Strategic Sourcing which states, “components are encouraged to identify recurring, repetitive purchases; e.g., utility service needs, made by the GPC and, where appropriate, put these acquisitions into service contract vehicles where the GPC is used as a method of payment.”  In fact, DoD Financial Management Regulation, Vol. 10, Ch. 16, para. 160803 states payment for express mail associated to official business mandates either GPC or third party electronic payer system be used for small package shipments as the method of payment. 
       
    Bottom line: everything I have found in my research tells me that these recurring/repetitive FedEx purchases should be made via a contract with GPC used as the payment method.  GSA Advantage already has contracts in place to make purchases from FedEx and other express package delivery services.  I, also, highly encourage you to discuss this issue with your A/OPC and legal department for further guidance.

    In fairness, it would be prudent to consider what has been the past experience for these types of purchases.  The question background provided gives the impression that it has just now been identified that shipments/express delivery total in excess of $10K for the previous year.  Was this the first year that this has occurred or is it a normal and regular expense at that rate?  Once it is identified to be an ongoing expense over the $2,500 service limit, then a contract vehicle should probably be used.  If the amount is not usual, the person making the purchase may not have known that the expense would be that high and looking at it as individual expenditures would be expected, especially if it is charged to different projects.  From this point on, with the expense identified, it would be prudent to use a BPA or other contract vehicle such as GSA Advantage.

     


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