Contract Management:

Government Faces Challenges in Gathering Socioeconomic Data on Purchase Card Merchants

GAO-03-56: Published: Dec 13, 2002. Publicly Released: Jan 13, 2003.

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Government purchase cards have streamlined the process of acquiring goods and services by allowing employees to purchase directly from merchants rather than going through the regular procurement process. The government spent $13.8 billion using purchase cards in fiscal year 2001. However, the government does not know how purchase card spending impacts small businesses and other socioeconomic categories, such as woman-owned small businesses, and small disadvantaged businesses. Because of these uncertainties, the General Services Administration (GSA), which administers the purchase card program, has begun to collect socioeconomic data on merchants doing business with the federal government through purchase cards. This report assesses GSA's efforts and identifies the challenges to collecting and reporting this data.

GSA's effort to collect socioeconomic data in fiscal year 2001 was ineffective because of incomplete, inconsistent, and, therefore, unreliable data gathered by banks and payment card associations on behalf of GSA. The data were inconsistent primarily because GSA did not precisely define criteria for the information it was seeking from the banks. Therefore, no meaningful conclusions can be drawn at this time about where agencies spend purchase card dollars or the effect of purchase cards on small businesses. Nevertheless, GSA has been working with the Small Business Administration, the Department of Defense, and the private sector to develop strategies to improve the data's reliability. By building on the lessons learned in its initial attempt to collect the data, GSA hopes to produce more reliable socioeconomic data for future fiscal years. We identified several challenges that prevent GSA from gathering data on 100 percent of the merchants doing business with the federal government. These challenges stem from the nature of the purchase card transaction processing system, which focuses on the data needed to ensure that the merchant is paid and the cardholder's account is charged. It is not designed to collect socioeconomic data for the government. Despite the challenges that prevent the collection of socioeconomic data on all purchase card merchants, well-defined criteria and consistent use of available data sources would provide decisionmakers with a clearer picture of the extent to which small businesses are receiving federal dollars through purchase cards.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Agency has finalized clarification of socioeconomic information that the banks are asked to report. As of June 17, 2003, contract modifications have been sent to the banks for signatures. Execution of the contracts is forthcoming.

    Recommendation: While the government faces a number of challenges in collecting socioeconomic data on all purchase card merchants, there is an opportunity to improve the available data. Therefore, in order to strengthen the ongoing efforts, the Administrator of GSA should clarify the socioeconomic information that banks and payment card associations are asked to report.

    Agency Affected: General Services Administration

  2. Status: Closed - Implemented

    Comments: Agency has specified an approach to identifying and using appropriate information sources for the socioeconomic data and has consulted with participants to obtain agreement. Contract modifications were sent to banks on June 17, 2003. Execution of the modifications is forthcoming.

    Recommendation: While the government faces a number of challenges in collecting socioeconomic data on all purchase card merchants, there is an opportunity to improve the available data. Therefore, in order to strengthen the ongoing efforts, the Administrator of GSA should specify a rigorous, disciplined approach to identifying and using appropriate information sources for the socioeconomic data and ensure the participants agree to it.

    Agency Affected: General Services Administration

  3. Status: Closed - Implemented

    Comments: In 2005, GSA was receiving quarterly reports from the GSA SmartPay banks. GSA realized that there was a problem with the data because of a mismatch with data fields between the banks and the Federal Procurement Data System-Next Generation, which forwards the reports to GSA. GSA initiated meetings with the banks and other parties to work out the problem. A modification resulted and GSA is making quarterly assessments of the ongoing activity.

    Recommendation: While the government faces a number of challenges in collecting socioeconomic data on all purchase card merchants, there is an opportunity to improve the available data. Therefore, in order to strengthen the ongoing efforts, the Administrator of GSA should conduct periodic assessments to verify that they are interpreting and reporting data consistently.

    Agency Affected: General Services Administration

 

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