[Congressional Record Volume 150, Number 56 (Wednesday, April 28, 2004)]
[Senate]
[Pages S4496-S4497]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Mr. Feingold):
  S. 2356. A bill to require the Director of the Office of Management 
and Budget to issue guidance for, and provide oversight of, the 
management of micropurchases made with Government-wide commercial 
purchase cards, and for other purposes; to the Committee on 
Governmental Affairs.
  Ms. COLLINS. Mr. President, I rise today with my colleague, Senator 
Russ

[[Page S4497]]

Feingold, to introduce the ``Purchase Card Waste Elimination Act of 
2004,'' to help eliminate wasteful spending through the use of 
governmental credit cards.
  Today, the Governmental Affairs Committee explored the federal 
government's use of ``purchase cards,'' which are commercial charge 
cards used by federal agencies to buy billions of dollars worth of 
goods and services. The Committee heard the results of the General 
Accounting Office's investigation into waste, fraud, and abuse in the 
purchase card program.
  The American people have the right to expect the federal government 
to spend their tax dollars carefully and wisely. While this is true at 
all times, it is never more so than today, when the government faces 
enormous fiscal pressures and a growing budget deficit.
  The Governmental Affairs Committee has a mandate to help safeguard 
those tax dollars from waste, fraud, and abuse. To meet this mandate, 
the Committee has launched an initiative to root out government waste. 
Today's hearing was part of that effort and focused on wasteful, 
inefficient, and in some cases, fraudulent, transactions using purchase 
cards.
  These cards were first introduced by the General Services 
Administration on a government-wide basis in 1989. Purchase cards are 
used primarily for making routine purchases such as office supplies, 
computers and copying machines. Purchase cards are similar to the 
personal credit cards we all carry, but with one important difference: 
The taxpayers pays the bill. Although the card is only supposed to be 
used for official purposes, the Federal Government is responsible for 
paying all charges by authorized cardholders, regardless of what was 
purchased.
  While legitimate purchases are usually small, they nevertheless add 
up to big money. Purchase card use has soared during the past decade--
from less than $1 billion in fiscal year 1994 to more than $16 billion 
in fiscal year 2003. There are more than 134,000 purchase cardholders 
in the Defense Department alone.
  This explosive growth presents both challenges and opportunities. 
While there are many benefits to the purchase card, such as expediting 
purchases, cutting red tape, and saving administrative costs, the 
General Accounting Office and the Inspectors General have reported that 
inadequate controls over purchase cards leave agencies vulnerable to 
waste, fraud, and abuse.
  The Governmental Affairs Committee heard testimony describing how 
smarter use of purchase cards could save taxpayers hundreds of millions 
of dollars. A GAO report that I requested along with Senator Feingold 
and Congresswoman Schakowsky, which is being released today, highlights 
several wasteful purchasing practices.
  The GAO concludes that many agency cardholders fail to obtain readily 
available discounts on purchase card buys. In too many cases, purchase 
cardholders are buying goods and services from vendors that already 
agreed to provide government discounts through the GSA schedule, yet 
cardholders often lack the information and training needed to obtain 
the discounted prices. As a result, GAO found numerous instances of 
cardholders paying significantly more for items for which discounts 
already had been negotiated. In light of the fact that conscientious 
shoppers often can obtain savings beyond the schedule discounts, these 
findings indicate that some federal agencies are substantially 
overpaying for routine supplies.
  For example, an analysis of the Department of Interior's purchase 
card buys of ink cartridges found that most of the time the cardholder 
paid more than the government schedule price to which the vendors had 
already agreed. One vendor had agreed to a schedule price of $24.99 for 
a particular ink cartridge, yet of 791 separate purchases of this 
model,only two were at or below that price. Some purchasers paid $34.99 
or about 40 percent more for the same item.
  In conducting its investigation, the GAO examined six agencies that 
together account for over 85 percent of all government purchase card 
transactions. If the six agencies reviewed in this study negotiated 
automatic discounts of just 10 percent from major vendors, and if 
agency employees had used those discounts, GAO estimates annual savings 
of $300 million. Over 10 years, that's $3 billion. Pretty soon, as 
Senator Dirksen once observed, we're talking real money.
  The GAO also found that agencies should be making greater efforts to 
collect and analyze data on purchase card transactions. This would help 
agencies to eliminate waste and to expose fraud and abuse.
  We must assure taxpayers that the federal government is shopping 
carefully, wisely and honestly. That's why the legislation we introduce 
today would require the Office of Management and Budget to direct 
agencies to better train cardholders and to more effectively scrutinize 
their purchases. This legislation would also instruct the General 
Services Administration to increase its efforts to secure discount 
agreements with vendors and to better provide agencies with the tools 
needed to control wasteful spending. According to testimony by GAO, 
this legislation would be a strong first step to eliminating $300 
million in wasteful spending.
  The American people have the right to expect the federal government 
to spend their tax dollars carefully and wisely. I urge my colleagues 
to cosponsor this legislation and help eliminate wasteful purchase card 
spending.
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