Senator seeks to curtail emergency purchase card limits

Sen. Charles Grassley (R-Iowa) is trying to rein in newly increased purchase card limits that Congress passed as part of a Hurricane Katrina aid package. That legislation raised the purchase limit for the cards from $2,500 to $250,000.

Grassley added a provision to a package of health care assistance items for hurricane victims. The amendment would reduce that limit to $50,000 unless the purchaser has written supervisory approval to spend more, according to a Grassley news release.

The legislation is under development in the Senate Finance Committee, which Grassley chairs.

Grassley had previously opposed the increase to $250,000 in a Sept. 8 letter he co-signed with Sen. Susan Collins (R-Maine) and Sen. Joseph Lieberman (D-Conn.)

Some government watchdog groups were concerned about the increase, citing documented difficulties in enforcing purchase card rules even at the original limit.

“Thank goodness Sen. Grassley is providing some adult supervision," said Danielle Brian, executive director of one such group, the Project on Government Oversight. "It’s not just the taxpayers who are harmed by the current Monopoly money mentality in Washington, D.C., but more directly the hurricane survivors themselves. Every penny spent should help the survivors instead of lining the pockets of disaster profiteers."

Steve Kelman, a professor at Harvard University's Kennedy School of Government and a Federal Computer Week columnist, said two frequently confused issues are at work: the micropurchase threshold, which is the largest amount of money an agency can spend without invoking competition rules, and the use of the purchase card as a payment method.

The Katrina legislation raises the micropurchase threshold to $250,000, but Kelman said the use of purchase cards is not a problem.

"If you're just talking about using the purchase card as a payment device, I think that if you can get people to deliver things faster, or vendors will do business because of the purchase card, I have no problem with dramatically raising the limit," he said.

The Office of Management and Budget issued guidelines Sept. 13 that cover the new micropurchase threshold, and it particularly addressed the use of the cards. Kelman said the guidance includes enough safeguards to prevent abuse.

Visions of agency employees going on spending sprees are misguided, Kelman said. In addition to imposing strict rules on card use, the OMB guidance allows only employees sanctioned by agency managers to use the cards and requires contracting officers to approve purchases worth more than $50,000 that are not part of an existing contract. OMB also emphasizes that the higher ceilings apply only to purchases that directly support Katrina relief efforts.

In short, the legislation does not mean that government employees will abuse purchase cards, Kelman said. "I think that this is a knee-jerk reaction," he said of Grassley's attempt to bring the threshold down.

It was unclear whether Grassley's new legislation will pertain to the micropurchase threshold broadly or to purchase card use only.