micropurchase

[themanintheseersuckersuit]

For me that would be putting a quarter in a gum machine

A “micropurchase” is a purchase costing less than $3,000 in which a government-issued purchase card is swiped. The U.S. Departments of State, Homeland Security, Veterans Affairs, Transportation, and Defense, each made tens of millions of dollars of “micropurchases” in the past year, according to an I-Team review. But each agency said it does not make public an itemized list of its transactions, limiting the information to internal government reviewers and users of the federal Freedom of Information Act.

[earendel]

For me that would be putting a quarter in a gum machine

A “micropurchase” is a purchase costing less than $3,000 in which a government-issued purchase card is swiped. The U.S. Departments of State, Homeland Security, Veterans Affairs, Transportation, and Defense, each made tens of millions of dollars of “micropurchases” in the past year, according to an I-Team review. But each agency said it does not make public an itemized list of its transactions, limiting the information to internal government reviewers and users of the federal Freedom of Information Act.

So what's the big deal? I work for the Corps of Engineers and we use government-issued purchase cards (GPCs) for transactions under $3,000, as the article says. The advantage is that purchasers aren't required to go through the procurement process (request quotes, analyze alternatives, etc.) - he or she can just go to whatever store provides the lowest price, which saves the government money.

[SpacemanSpiff]

Actually, this isn't uncommon in private sector companies, especially larger ones.

The only time I've ever had problems with it is when someone tried to circumvent it by making multiple smaller purchases to spend a larger amount and hide it, a problem I've had both as a seller and as a purchaser. I recall someone at Philip Morris trying to buy a $25,000 forklift, but to have us bill them as 10 billings of $2500 (we refused), and the occasional manager here that tries to get cute and evade our CAPEX purchasing rules by having a vendor sell them over multiple invoices to accomplish the same thing -- one manager for us was fired over that trick (it wasn't his lone attempt at circumventing rules, hence his termination).

In accounting, it's called materiality, which is a way of saying "don't sweat the small stuff."

[Bob78164]

For me that would be putting a quarter in a gum machine

A “micropurchase” is a purchase costing less than $3,000 in which a government-issued purchase card is swiped. The U.S. Departments of State, Homeland Security, Veterans Affairs, Transportation, and Defense, each made tens of millions of dollars of “micropurchases” in the past year, according to an I-Team review. But each agency said it does not make public an itemized list of its transactions, limiting the information to internal government reviewers and users of the federal Freedom of Information Act.

So what's the big deal? I work for the Corps of Engineers and we use government-issued purchase cards (GPCs) for transactions under $3,000, as the article says. The advantage is that purchasers aren't required to go through the procurement process (request quotes, analyze alternatives, etc.) - he or she can just go to whatever store provides the lowest price, which saves the government money.

It seems like with cards involved, it should be relatively easy to prepare a paper trail enhancing transparency and accountability. --Bob

[silverscreenselect]

The advantage is that purchasers aren't required to go through the procurement process (request quotes, analyze alternatives, etc.) - he or she can just go to whatever store provides the lowest price, which saves the government money.

Any potential savings, either in fraud prevention or merely finding a better price, are outweighed by the costs involved in going through a procurement procedure, plus the added time and expense for all the paperwork involved. I assume the government has ways to track suspicious patterns of purchases to detect possible fraud, much the same as credit card companies can track suspicious purchases and investigate if they think a cardholder's information has been stolen.

[SportsFan68]

Actually, this isn't uncommon in private sector companies, especially larger ones.

The only time I've ever had problems with it is when someone tried to circumvent it by making multiple smaller purchases to spend a larger amount and hide it, a problem I've had both as a seller and as a purchaser. I recall someone at Philip Morris trying to buy a $25,000 forklift, but to have us bill them as 10 billings of $2500 (we refused), and the occasional manager here that tries to get cute and evade our CAPEX purchasing rules by having a vendor sell them over multiple invoices to accomplish the same thing -- one manager for us was fired over that trick (it wasn't his lone attempt at circumventing rules, hence his termination).

In accounting, it's called materiality, which is a way of saying "don't sweat the small stuff."

The credit cards are an amazing time and money saver for public sector organizations as well. Our limit was $1,000, which for us was always plenty. One department did try to circumvent the rules by buying components separately, but they were busted and nearly lost credit card privileges for the department. They only reason they didn't lose all their credit cards on the spot is that it would have meant extra work for the purchasing department as well, so they got to keep one card, which meant extra work for the administrative assistant, but she was trusted to follow the rules.

[geoffil]

Micropurchase = What attorneys say their fees are

[SpacemanSpiff]

Micropurchase = What attorneys say their fees are

You mean like in Birmingham?

http://www.al.com/news/birmingham/index ... es_ca.html

[geoffil]

Exactly

[earendel]

The advantage is that purchasers aren't required to go through the procurement process (request quotes, analyze alternatives, etc.) - he or she can just go to whatever store provides the lowest price, which saves the government money.

Any potential savings, either in fraud prevention or merely finding a better price, are outweighed by the costs involved in going through a procurement procedure, plus the added time and expense for all the paperwork involved. I assume the government has ways to track suspicious patterns of purchases to detect possible fraud, much the same as credit card companies can track suspicious purchases and investigate if they think a cardholder's information has been stolen.

That's just it - with the purchase card there's no procurement procedure. A cardholder just goes to the store and makes the purchase or orders it online. And yes, there are procedures in place to prevent abuse, though that's not to say that it doesn't happen.

[mellytu74]

The advantage is that purchasers aren't required to go through the procurement process (request quotes, analyze alternatives, etc.) - he or she can just go to whatever store provides the lowest price, which saves the government money.

Any potential savings, either in fraud prevention or merely finding a better price, are outweighed by the costs involved in going through a procurement procedure, plus the added time and expense for all the paperwork involved. I assume the government has ways to track suspicious patterns of purchases to detect possible fraud, much the same as credit card companies can track suspicious purchases and investigate if they think a cardholder's information has been stolen.

That's just it - with the purchase card there's no procurement procedure. A cardholder just goes to the store and makes the purchase or orders it online. And yes, there are procedures in place to prevent abuse, though that's not to say that it doesn't happen.

I am pretty sure that's how it worked at The Electric Company, when I worked there (and still does, even though I no longer work there).

And, no, I didn't know Morgan Freeman. Different Electric Company.

[mrkelley23]

I wish we had a similar process for us in schools. All purchases of our lab equipment, for instance, must go through the paper-filled ordering process. So instead of going to the local cheap tools store (Harbor Freight, if you're interested) and buying digital multimeters for $7.95 apiece, I have to order through an approved vendor's catalog, which means the same quality unit will cost my students a minimum of $64.95. Those students will break either one with the same frequency, too. Which is pretty doggone often.

[Bob Juch]

I wish we had a similar process for us in schools. All purchases of our lab equipment, for instance, must go through the paper-filled ordering process. So instead of going to the local cheap tools store (Harbor Freight, if you're interested) and buying digital multimeters for $7.95 apiece, I have to order through an approved vendor's catalog, which means the same quality unit will cost my students a minimum of $64.95. Those students will break either one with the same frequency, too. Which is pretty doggone often.

Just don't do this: http://www.denverpost.com/news/ci_26778 ... ol-student