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I work at a small civilian Bureau, have to run the Purchase card program for our state, and I am aware the Micro-Purchase Threshold (MPT) was recently increased for some categories of requirements up to $10,000. 

However, on another forum post last year regarding an $11,000 tree removal requirement and using vendors not in SAM, another forum user suggested I negotiate down to the newer/higher $10,000 MPT, so it could be put on a Purchase card.  At the time (FY-end madness) I thought that was odd, but didn't follow back up then.

My Bureau's leadership insists that only some services have an MPT of $10,000, if they are exempted from a $2,500 threshold per 41 USC Chapter 67.  The only services that we currently exempt are those that we determine to be professional or creative, per 29 CFR 541.301

When I first started, I inherited our entire state's Purchase card program, which was right after the MPT was increased, during high staff turnover, and a switch to a new card vendor; cue mass confusion.  

I met with other CO's and a Dept of Labor wage specialist, and the determination (and guidance from above us in the Bureau) was that all "blue-collar", or non-professional and non-creative services, are subject to SCLS / SCA / FLSA and have only a $2,500 MPT. 

In short, right now at my Bureau, every blue collar requirement over $2,500 cannot go on a Purchase card and must be a contract (or order off an existing vehicle). 

The $2,500 amount is first mentioned in FAR 2.101, where it's spelled out as: 

 [The MPT] means $10,000, except it means-

           (1) For acquisitions of construction subject to 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction), $2,000;

           (2) For acquisitions of services subject to 41 U.S.C. chapter 67, Service Contract Labor Standards, $2,500;  

           (3) For acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation....[yada yada]

 

The only other time the $2,500 amount is explicitly referenced again is in FAR 22, with a general emphasis being that Service contracts over $2,500 have to have certain Clauses, Previsions, Wage Determinations, and other relevant attachments. 

Otherwise, just "micro-purchase threshold" is used throughout FAR 5, 6, 12, 13, etc. 

 

My question: is my Bureau wrong about the "blue collar" rule, in which non-professional / non-creative services all still have just a $2,500 MPT? 

I looked at 41 USC Chapter 67, which has these exemptions under para. (b): 

(b) Exemptions.—This chapter does not apply to—

  • (1) a contract of the Federal Government or the District of Columbia for the construction, alteration, or repair, including painting and decorating, of public buildings or public works;
  • (2) any work required to be done in accordance with chapter 65 of this title;
  • (3) a contract for the carriage of freight or personnel by vessel, airplane, bus, truck, express, railway line or oil or gas pipeline where published tariff rates are in effect;
  • (4) a contract for the furnishing of services by radio, telephone, telegraph, or cable companies, subject to the Communications Act of 1934 (47 U.S.C. 151 et seq.);
  • (5) a contract for public utility services, including electric light and power, water, steam, and gas;
  • (6) an employment contract providing for direct services to a Federal agency by an individual; and
  • (7) a contract with the United States Postal Service, the principal purpose of which is the operation of postal contract stations.

The Chapter 65 exemption referenced therein refers to Supplies requirements. 

 

Administering the Purchase card program is honestly the bane of my professional existence...whether it is cardholders splitting purchases, cardholders begging to exempt things from the $2,500 MPT, Ratifications in the $9k-$11k range, and PR's in the $2,500 - $10k range - this eats up SUBSTANTIAL hours of my and other CO's time.  If the Services MPT was just uniformly $10k, life would be remarkably easier, and I could spend much less time on these abundant low dollar value requirements.  It would also make a lot of sense....so I assume that's not how the regs work, and my Bureau's current policy is right.  

However, I assume that the comments on my other post were just made in error, and my determinations so far, and my Bureau's leadership's determinations, are in fact correct and many services still have only a $2,500 MPT. 

 

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The SCA and other laws do limit the micro purchase threshold.  So you may have to comply with things like the SCA when the value exceeds $2500 for example.   But that doesn’t mean you can’t use the P Card for payment in those instances.  You just need to be sure your P Card program is set up to allow it. 

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Sorry, that doesn't really answer the first question - and it raises another one! Down the regulatory rabbit hole we go. 

Is my Bureau wrong about the "blue collar" rule, in which non-professional / non-creative services all still have just a $2,500 MPT?

The second question raised: What would be the benefit of just making payment with Purchase card if most of the other time consuming stuff still is required? 

IE, if a $3k non-professional Service exceeds the MPT, I can't delegate that purchasing to a cardholder, it has to be handled by one of us in the Acquisitions shop. 

So, the Requiring Office then must submit a PR (at least a day for them to get that right, typically a week), and we still have to prep Clauses and Provisions and the SF1449 in our contracting software, do a peer review, etc. 

We could just do oral quotes for soliciting / competing, but the other stuff takes up so much time that it negates any real benefit of just handling payment with a Purchase card. 

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Strictly speaking, your bureau is wrong about the blue color rule.  The $2,500 limitation applies to services that are subject to the Service Contract Act (now referred to as the Service Contract Labor Standards statute).  The SCA (SCLS) may reach many contracts involving blue collar workers, but not necessarily all.

For repetitive services, you might consider establishing FAR Part 13 blanket purchase agreements (BPAs) and letting cardholders order off of them up to their card limits ($10K or even 25K?) using calls.  This is very easy to do.

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5 hours ago, GovtAcctGeek said:

I work at a small civilian Bureau, have to run the Purchase card program for our state...

 

Could you please clarify how 41 USC ch.67 and FAR became applicable to your state?

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Neil, 

I'm not sure I understand what you're asking with how the FAR became applicable to our state? 

41 USC Ch 67 is referenced in FAR 2.101 in saying what Services are subject to the lower MPT.

The FAR is what governs us in my Bureau's Acquisitions; we also have Dept-wide regs but they are quite sparse and don't mention MPT.  

So far as I know, 41 USC Ch 67 and the FAR are both government-wide regs that apply to almost all agencies/bureaus in almost all states (unless there is some exemption). 

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7 hours ago, Neil Roberts said:

Could you please clarify how 41 USC ch.67 and FAR became applicable to your state?

Neil, as I read the Original Post, GAG works for a Fed., Non-military agency for contracts within a specific state-wide area. Title 41 covers their acquisition process. 

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@govtacctgeek - 

9 hours ago, GovtAcctGeek said:

Is my Bureau wrong about the "blue collar" rule, in which non-professional / non-creative services all still have just a $2,500 MPT?

This question has been answered by others.  I could split hairs with regard to the answers but rather than doing I thought I would add a few thoughts to help, I hope.

Changing the SCLS and the CWRR thresholds to be commensurate with the MPT might occur someday.   The argument you present has been batted around at the legislative level and the change has not occurred.   My view don't hold your breath.

Specific to application of SCLS and its details of when it does or does not apply I thought this reference may be of assist in helping you and your Bureau  -https://www.dol.gov/agencies/whd/field-operations-handbook/Chapter-14

You have mentioned leadership but not a purchase card "policy" or the like.  Not that it might change thoughts on the cards use if one exists but I was just wondering if there is one?  Why?  Just your reference to the bane of your existence raised the thought for me.

And to the same area of your comments just one thought of splitting procurements.  I lived your life once and the interpretation of split becomes a roller coaster.  I would just hope that your leadership depends on you and those like you to determine if purchases are in fact done to intentionally avoid requirements that apply to needs above the MPT rather than what I will call the ability to use the purchase card for "just in time" needs.   As to "split" if you have not done so a internet search of "splitting procurements + GAO" provided me with a better understanding of "split" to assist in guidance on determinations of split.

9 hours ago, GovtAcctGeek said:

What would be the benefit of just making payment with Purchase card if most of the other time consuming stuff still is required? 

Not much benefit as you have noted with the primary one being the ability to delegate something like "call" authority to a card holder as mentioned but the complications created by the guidance of FAR 13.505-5 does get in the way. 

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First, THANK YOU Neil, Joel, and Culham for the responses so far, this is useful.  I definitely won't hold my breath on regulatory changes that are both intelligent and quick to occur. 

Second, sorry to seem dense, but I guess I am still wondering where the "blue collar" rule question has been answered? 

 

11 hours ago, ji20874 said:

For repetitive services, you might consider establishing FAR Part 13 blanket purchase agreements (BPAs) and letting cardholders order off of them up to their card limits ($10K or even 25K?) using calls.  This is very easy to do.

I agree that this is one possible solution, and I've floated it to my management with little response or proactivity on their part.  

Additional question:  Would cardholders be able to place a BPA Call, paid with their Purchase card, without having to submit a PR or insert additional Clauses on each Call? 

One issue with this solution is that there is a wide variety of things that come up each year that we still don't have good data on, so a few BPA Setups may resolve, say, 20 actions per year, but we have 100+ actions per year that are in the $2.5k - $10k range.  Still, 20% fewer full contracts would be an improvement!  

The "bane of my existence" refers both to the time and frustration of trying to help Purchase card holders responsibly spend without breaking laws / violating regs, but also to the fact that I have no authority to actually remove cards when cardholders screw up (which is daily).  Removal authority lies with our infinitely wise but Acquisition-ignorant leadership above me, who believe everybody is entitled to a Purchase card. 

Additionally, our Purchase Card Policy is about five years expired and I believe still references the MPT from over five years ago, so....there is little guidance or support above me in terms of making the program either (a) compliant with all laws / statutes / regulations / etc or (b) running smoothly through intelligent decisions and clarity on all the various types of thresholds. 

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So maybe you have 120 or so actions per year in the $2.5k - $10k range?  And of those, about 20 or so go to repeat contractors and  the other 100 or so go to one-time contractors?  

19 minutes ago, GovtAcctGeek said:

Additional question:  Would cardholders be able to place a BPA Call, paid with their Purchase card, without having to submit a PR or insert additional Clauses on each Call? 

Yes.  For any contractor that gets repetitive purchase orders, I would recommend establishing a BPA.  A BPA need not include prices -- the card holder (an individual authorized to make a purchase under the BPA) can determine if the price is reasonable at the time he or she decides to make the purchase using the BPA.  The BPA can have the appropriate wage determination and other clauses for a $10,000 purchase (remember, clauses are based on the individual purchase limit, not any anticipated cumulative total).  You do not need competition to establish a BPA.  You do not need a requisition or certified funding.  You just do it.  Then, if a card holder chooses to make a purchase from the BPA vendor, he or she makes a call and makes payment with his or her card up to $10,000 and your office does not have to issue a purchase order.  One of the BPA terms will require the vendor to submit a monthly list of calls to your office.

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17 minutes ago, GovtAcctGeek said:

Second, sorry to seem dense, but I guess I am still wondering where the "blue collar" rule question has been answered? 

Formerfed answered that question.  By law, the SCA applies to all acquisitions of services  with a value in excess of $2,500.  Therefore, you have to ensure that all the required SCLS clauses are included in the instrument used to acquire such services.

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Just now, Retreadfed said:

By law, the SCA applies to all acquisitions of services  with a value in excess of $2,500.  Therefore, you have to ensure that all the required SCLS clauses are included in the instrument used to acquire such services.

This statement is too broad for my practice.  There are many services that are not covered by SCA/SCLS.  I use FAR 22.1003-1 as my guide as to which services are covered, and which are not.

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So it seems like my Bureau's current interpretation is probably accurate, and the suggestions to make a basic wood cutting contract $10k and put it on a card were incorrect. 

This is based on y'all's feedback here, the USC and DOL citations above, and also the definitions at FAR 22.1003-1 and FAR 37.101. 

Basically, any "blue collar" services is still subject to the $2,500 MPT, except for those services explicitly exempted in:

  • 22.1003
  • 22.1003-4
  • 22.1003-4(b)-(d)
  • 37.101 (1)-(9) (DISREGARD)
  • (relevant Dept/Agency-specifics regs, if applicable)

 

As far as ways to minimize the pain of our hundreds of actions per year, many of which are related if not redundant, I think ji20874 hit the nail on the head. 

9 hours ago, ji20874 said:

So maybe you have 120 or so actions per year in the $2.5k - $10k range?  And of those, about 20 or so go to repeat contractors and  the other 100 or so go to one-time contractors?  

Yes.  For any contractor that gets repetitive purchase orders, I would recommend establishing a BPA.  A BPA need not include prices -- the card holder (an individual authorized to make a purchase under the BPA) can determine if the price is reasonable at the time he or she decides to make the purchase using the BPA.  The BPA can have the appropriate wage determination and other clauses for a $10,000 purchase (remember, clauses are based on the individual purchase limit, not any anticipated cumulative total).  You do not need competition to establish a BPA.  You do not need a requisition or certified funding.  You just do it.  Then, if a card holder chooses to make a purchase from the BPA vendor, he or she makes a call and makes payment with his or her card up to $10,000 and your office does not have to issue a purchase order.  One of the BPA terms will require the vendor to submit a monthly list of calls to your office.

 

I really hope to waste less and less of my and my colleagues' time on these very-low-dollar requirements as time goes by.  

THANK YOU!  I appreciate everyone's input!!

Edited by GovtAcctGeek
striking through an error of mine
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4 hours ago, ji20874 said:

There are many services that are not covered by SCA/SCLS.

True.  Covered contracts are contracts to be performed by service employees other than contracts that are excepted by the SCA.  See, generally 29 CFR 4.113 and 4.115-123.

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G.A.G.,

2 hours ago, GovtAcctGeek said:

Basically, any "blue collar" services is still subject to the $2,500 MPT, except for those services explicitly exempted in:

  • 37.101 (1)-(9) 

FAR 37.101 provides zero exemptions to SCLS coverage.  Indeed, contracts under every one of headings in 37.101's definition of service contract could require SCLS coverage, depending on the pertinent facts.  

You are still focusing on blue collar work, but SCLS coverage is not driven by blue versus white collar -- indeed, blue collar is wholly irrelevant.  See FAR 22.1003-1 -- here is the key text--

"...applies all Government contracts,
the principal purpose of which
is to furnish services in the United States
through the use of service employees,
except as exempted..."

If blue collar workers are used, but the principal purpose of the contract is not to to furnish services in the United States through the use of service employees, then SCLS does not cover those blue collar workers.

If blue collar workers are used, but the contract is primarily for supplies or professional services, for example, then SCLS does not cover those blue collar workers.

If blue collar workers are used, but the blue collar workers are not service employees, then SCLS does not cover those blue collar workers.

Sure, many contracts involving blue collar workers will be subject to SCLS -- but not all, and not because blue collar workers are involved.  Maybe you should drop blue collar from your working definition of SCLS coverage?  Instead, I recommend just using what we read in FAR 22.1003-1:  "...applies all Government contracts, the principal purpose of which is to furnish services in the United States through the use of service employees, except as exempted..."

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20 hours ago, GovtAcctGeek said:

Neil, 

I'm not sure I understand what you're asking with how the FAR became applicable to our state? 

41 USC Ch 67 is referenced in FAR 2.101 in saying what Services are subject to the lower MPT.

The FAR is what governs us in my Bureau's Acquisitions; we also have Dept-wide regs but they are quite sparse and don't mention MPT.  

So far as I know, 41 USC Ch 67 and the FAR are both government-wide regs that apply to almost all agencies/bureaus in almost all states (unless there is some exemption). 

From your posting, and this response, it isn't clear to me whether you work for the federal government acquiring goods and services. It looks like you may be working for a state agency, and also that you are saying FAR and ch 67 control what state agencies are required to comply with in acquiring goods and services.

Edited by Neil Roberts
last sentence clarification
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6 hours ago, ji20874 said:

See FAR 22.1003-1 -- here is the key text--

"...applies all Government contracts,
the principal purpose of which
is to furnish services in the United States
through the use of service employees,
except as exempted..."

If blue collar workers are used, but the principal purpose of the contract is not to to furnish services in the United States through the use of service employees, then SCLS does not cover those blue collar workers.

If blue collar workers are used, but the contract is primarily for supplies or professional services, for example, then SCLS does not cover those blue collar workers.

If blue collar workers are used, but the blue collar workers are not service employees, then SCLS does not cover those blue collar workers.

Sure, many contracts involving blue collar workers will be subject to SCLS -- but not all, and not because blue collar workers are involved.  Maybe you should drop blue collar from your working definition of SCLS coverage?  Instead, I recommend just using what we read in FAR 22.1003-1:  "...applies all Government contracts, the principal purpose of which is to furnish services in the United States through the use of service employees, except as exempted..."

The problem with the FAR's definitions are that they are circular.  What's a service contract?  One that uses service employees.  What's a service employee?  One that's in a service contract!  

That sort of circular logic is neither clear nor helpful.  The most specific, the clearest, and most helpful definition is the negative one found in 37.101, which basically says "not a supply contract", and verbatim reads: 

a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply. 

 

I keep coming back to the "blue collar" (or "non-professional" or maybe "skilled trade") rule of thumb because 

(a) that is what Dept of Labor and Warranted CO's used to explain our Bureau's rule on what is exempt; and, 

(b) we need some sort of Plain English rule to explain this to cardholders and laypeople, and to save time 

 

 

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@GovtAcctGeek

7 hours ago, GovtAcctGeek said:

The problem with the FAR's definitions are that they are circular.  What's a service contract?  One that uses service employees.  What's a service employee?  One that's in a service contract!  

That sort of circular logic is neither clear nor helpful... 

I keep coming back to the "blue collar" (or "non-professional" or maybe "skilled trade") rule of thumb because...  (b) we need some sort of Plain English rule to explain this to cardholders and laypeople, and to save time[.] 

Do you now know what is a service employee?

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From my read I believe @ji20874 has unnecessarily complicated this thread.   My read has been that in the very beginning when @GovtAcctGeek has mentioned "blue collar" he/she has included the word "services".  I went back and checked the thread and my read seems to be accurate.  The term got convoluted as the thread went on.  This said the discussion about supplies plus blue collar is unnecessary.

 My advice to @GovtAcctGeek would be to refer back to the "Chapter 14" I referenced and provided a link to before. Additionally this website may even provide more references to assist in sorting out the issue - https://www.dol.gov/agencies/whd/government-contracts/service-contracts/interpretive 

Per Chapter 14 I might add this (below in quotes) is the beginning of the  reference to "service employee".   There are a few more paragraphs at 14b05 that I encourage @GovtAcctGeek to read.  Noting this reference to start @GovtAcctGeek on a journey to do research rather than get into the convoluted discussion here.   I do not necessarily agree with the term "blue collar" as I believe folks should stick to a term, how should I say, pursuant to regulation, yet "blue collar" as a service might be a term that helps the "Bureau's" workforce and is pretty close if one does not get into a in depth discussion about exemptions, etc.    Chapter 14 does discuss exemptions and coverage.

"14b05 “Service employee.” (a) Section 8(b) of the Act defines “service employee” as any person engaged in the performance of a covered contract except those persons who individually qualify for an FLSA exemption as bona fide executive, administrative, or professional employees as defined in 29 CFR 541. See 41 USC 357(b), 29 CFR 4.113, 29 CFR 4.156, and FOH 14c07."

Now to the BPA.   I do not want to discourage @GovtAcctGeek from considering it as a tool to help with the "bane" but I have to echo my concern that I already provided about paying attention to the details of FAR 13.305-5.  Why? 

By example two thoughts that are supported by the guidance of FAR 13.305-5(e) that provides some details about a "paper" purchase document.  First "requisition" seems to be required.   Additionally, consider a covered SCLS need where it is proposed that the BPA/call be the tool to secure the need and the card is simply the payment method.   By my read of the regulations a paper document would be needed that "shall" be included in the contract, that being the appropriate SCLS Wage Determination.  Reference FAR 22.1002-1.  A BPA is not a contract, the call is.  Splitting hairs some would argue.  To this I would say you might be able to skirt the regulations but should a wage determination change say 1 month, 2 months or whatever what then?   Overall an example that the paperwork effort of the BPA/call process does become a paperwork nightmare in and of itself for SCLS covered needs.

Overall many in their "practice" have decided on methods that in reality work, but in truth are not complaint with the regulations.   @GovtAcctGeek just needs to decide to what extent he/she wants to suggest how to get things done that might also skirt the regulations where it is clear leadership just wants to make it as easy as possible for their folks to use the purchase card for SCLS covered needs.

PS - I even hate to mention this but what the hell - there has been no discussion about "construction" and the CWRR threshold.   Makes me wonder what the Bureau sees as appropriate for such needs?

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My apologies, Carl -- but it was the original poster him- or herself who asked "is my Bureau wrong about the 'blue collar' rule?" in big bold font, so I thought he wanted us to address it.

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On 2/3/2021 at 9:08 PM, GovtAcctGeek said:

Is my Bureau wrong about the "blue collar" rule, in which non-professional / non-creative services all still have just a $2,500 MPT?

@ji20874  No apologies necessary but accepted.   My view is that sometimes we all do not read the detail.   As noted the above quote specifically notes "services".  

Enjoy the now and make today great!

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On 2/5/2021 at 7:50 AM, Vern Edwards said:

I wonder if we'll ever learn whether GovtAcctGeek now knows what a service employee is? People put a lot of work into responding to his/her question.

@Vern Edwards 

Time will tell, I suppose; circular logic/definitions aren't very useful, but specific exemptions and examples elsewhere in the FAR and USC Chapters referenced above helped a little!  

I'd appreciate your thoughts on how you would more specifically / usefully define a service employee besides the circular default of an employee on a service contract is a service employee / a service contract is one that uses service employees [to perform tasks, not deliver an item].  

I'd also appreciate your thoughts on practicable ways to work through the time-consuming issue of hundreds of low-dollar SCLS-covered Services actions over the $2,500 threshold. 

My conclusion for the short term / remainder of FY21 is that the existing Bureau policies and shorthand (using a "blue collar" or "non-professional" rule to distinguish between SCLS covered and SCLS exempted) is the most practicable option moving forward. 

Additionally, in the medium term, BPA Setups for non-recurring Services up to $10k, payable with Purchase card, is probably the most practicable option moving forward. 

 

Thank you again everyone who contributed. 

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