[Congressional Record Volume 151, Number 19 (Friday, February 18, 2005)]
[Senate]
[Pages S1718-S1719]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Mr. FEINGOLD):
  S. 457. 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 Governmentwide commercial 
purchase cards, and for other purposes; to the Committee on Homeland 
Security and Governmental Affairs.
  Ms. COLLINS. Mr. President, I rise today with my colleague, Senator 
Russ Feingold, to introduce the ``Purchase Card Waste Elimination Act 
of 2005,'' to help eliminate wasteful spending that can occur when the 
Government neglects to pay attention to where it makes its purchases.
  Last year, the Senate Committee on Governmental Affairs, now the 
Committee on Homeland Security and Governmental Affairs, explored the 
Government's use of purchase cards and we learned about ways to save an 
estimated $300 million annually through better management of purchase 
cards. Purchase cards are, in essence, credit cards that agencies give 
to its employees for the purpose of obtaining goods and services for 
the Federal Government. In fact, under Federal acquisition law, 
purchase cards are the Government's preferred method for making what 
are known as ``micropurchases''--that is items costing $2,500 or less. 
Although Government employees spend billions of dollars with purchase 
cards each year, Federal agencies do very little to analyze the items 
obtained with purchase cards in an attempt to get a better price for 
the Government.
  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 is 
running large budget deficits. The Senate Committee on Homeland 
Security and Governmental Affairs has a special role to play in 
reducing wasteful spending, and I have made this role a priority at the 
Committee. This legislation is one aspect of our committee's efforts to 
reduce waste, fraud and abuse in Government spending.
  Purchase cards came into Federal Government-wide use in 1989. They 
allow Government employees to easily and efficiently purchase routine 
items such as office supplies, computers and copying machines. While 
they are generally used for small purchases, they accounted for more 
than $16 billion in Federal spending in 2003. In 1994, they accounted 
for only $1 billion.
  This increase in use is good news because it means that more 
Government spending is being executed in an expeditious manner that 
reduces red tape and saves on administrative costs. At the same time, 
the use of purchase cards should enable us to conduct comprehensive 
analysis of how this $16 billion is spent and where. This information 
could be analyzed and used to further reduce the Federal Government's 
costs. At present, however, this is not being done.
  Last year, Senator Feingold, Representative Schakowsky and I released 
a report by the Government Accountability Office identifying missed 
opportunities for savings. According to that report the missed savings 
were due to both a lack of training and a lack of management attention 
and oversight. According to GAO, too many purchase cardholders failed 
to obtain readily available discounts on purchase cards buys. Even 
where the Government and the vendor had negotiated a discounted price 
for items through the General Services Administration schedules, 
Federal employees with purchase cards failed to take advantage of the 
discounted prices and their managers were completely unaware of those 
lost

[[Page S1719]]

opportunities to save. One example of a repeated lost opportunity to 
save was the Department of the Interior's purchases of printer toner 
cartridges. One GSA schedule vendor offered the toner for only $24.99. 
Yet, of the Department's 791 toner cartridge purchases, only two were 
at or below that price. Some cartridges were purchased for $34.99, 
which is about 40 percent higher than the GSA schedule price.
  In addition to failing to use available schedule prices, GAO found 
that agencies failed to negotiate lower prices with vendors with whom 
they frequently used purchase cards. In the private sector, most 
companies that use the same vendor for a lot of purchases would 
negotiate some sort of volume discount. But before they would attempt 
to negotiate savings the company would first need to understand its 
spending patterns. Because Federal agencies lack a comprehensive 
understanding of where its employees are using Government purchase 
cards, Federal agencies are unable to replicate this practice.
  At my request, GAO analyzed purchase card use at the six Federal 
agencies that account for 85 percent of Government purchase card usage. 
As a result of that analysis, GAO estimated that $300 million per year 
could be saved if agencies improved their purchase card buying 
practices.
  Under our legislation, the Office of Management and Budget, OMB, 
would direct agencies to better train their cardholders and more 
effectively analyze their spending data. It would also direct the GSA 
to increase its efforts to improve its efforts to secure discounts with 
vendors and provide agencies with more guidance to reduce wasteful 
spending.
  The American people have the right to expect the Federal Government 
to spend their tax dollars wisely. I urge our colleagues to cosponsor 
and support this legislation.
                                 ______