USDA launches purchase card and checking system

The Agriculture Department this month began the pilot program of an automated government purchase card and checking system that is expected to cut procurement transaction costs nearly in half.

The system will eventually also be open to agencies that are customers of the department's National Finance Center (NFC).

"We've taken almost all the paper out of the system," said W.R. Ashworth, senior procurement executive of the USDA. "It's an automated process, so billing, account reconciliation and payments to the bank are all done electronically."

By eliminating several steps in the current process as well as many paper-based forms, the USDA expects the new Purchase Card and Management System to reduce transaction costs from $32 to $17 per transaction and lower NFC systems costs by $7.5 million over five years.

The USDA said it is one of the first to implement an automated credit card system and to offer a system that supports the use of checks.

GSA Makes it Easy

The General Services Administration, manager of the governmentwide contract for the purchase card, has made it easier for agencies to use credit cards for purchases of less than $2,500. More than 80 percent of the USDA's purchases are within this threshold.

Checks will be useful in rural areas, when small businesses will not take credit cards, or in disaster situations when agencies such as the Forest Service need to operate on a cash-and-carry basis.

NFC processes payroll for the department and also offers cross-servicing to other agencies and departments, such Treasury and Commerce.

Pilot tests for the credit card and check-writing system began this month with the Forest Service and the Agricultural Research Service.

There are about 9,200 credit card holders in the USDA who will eventually use the system once it is implemented USDA-wide in October, said Sue Poetz, program manager of the purchase card implementation team at the USDA. This number is set to rise to 20,000 over a three- or four-year period.

"But at the rate we're growing, we expect that will [happen] sooner," Poetz said.

The USDA first tried to go outside for the software for the system but decided to develop it in-house once it was clear that a suitable package could not be found.

The system is based on Microsoft Corp. Windows clients and an Oracle Corp. database running on an IBM Corp. RS/6000 server at NFC.

"This is the first system that we've had in the client/server environment," said Joanne H. Ellis, director of the Applications Systems Division at the NFC. "The project is [also] the first one we used CASE tools on, and it went really well."

Another feature of the system is an Oracle alert package that "raises a red flag" if credit card holders are buying an unapproved item. NFC also installed a firewall to protect data that is passed over the Internet.

Agencies that have cross-servicing agreements with NFC will eventually have access to the system, Ellis said.

"We would open it up to any client who would want to use it," she said.

While the current credit card at the USDA restricts travel and phone use, the department eventually wants to have one card for everything.