I am a new member posting for hte first tiime; I hope i have filed this under the correct forum.

I am a CO. In my agency the purchase card program is managed by financial operations and not the acquisition office. The brief email i posted below was from our purchase card manager, who infomed a staff member that the following scenario violated the micropurchase threshold rules for purchase card. One person in an offsite office has an ez pass account to pay the toll charges for the staff in that office. Each individual toll is for a few dollars, but the office annual aggregate cost was over $3k. Therfore the purchase card manager stated the purchase card can not be used for this type of transaction.

I am not sure i agree. Any comments and advice would be greatly appreciated. Thank you in advance.

Jim S

______________

Dear (name redacted):

During a review of purchase card transactions, we noticed a large amount of toll charges on your card in FY-12. Total there was $7,340.00 in toll charges for FY-12. During this review, we took a look at FY-13 transactions to see where we stood on toll charges and noticed that thus far you have $3,840.00 in toll charges for FY-13 (see detailed information below).

Merchant

Category

Code

Merchant Category Code

Description

Merchant Name

Transaction

Date

Transaction

Amount

4784

TOLLS AND BRIDGE FEES

EZPASS PREPAID TOLL

2012/10/07

$960.00

4784

TOLLS AND BRIDGE FEES

EZPASS PREPAID TOLL

2012/11/04

$960.00

4784

TOLLS AND BRIDGE FEES

EZPASS PREPAID TOLL

2012/12/05

$960.00

4784

TOLLS AND BRIDGE FEES

EZPASS PREPAID TOLL

2013/01/06

$960.00

Total

$3,840.00

As we all know the micro-purchase threshold is $3,000 for a single transaction or requirement. For toll charges, we need to make sure that the limit does not exceed $3,000 in one fiscal year, which you have already done. In order to remedy this situation and prevent it from being a larger issue, please contact EZ-PASS and have you card number removed from the account as an authorized payment method so that they cannot charge again in the beginning of February.

^{Jim, By this logic, would they shut off a card from use at the same gas station if use exceeded $3k? By definition, each toll is an individual transaction.}

_{As a previous billing official on the GPC program, I say violation. You can’t keep making purchases over and over (knowingly) if they end up exceeding SAP. Look up split disbursement (doesn’t matter that individual purchases are under, you also need to evaluate recurring purchases too). You have history from the previous year to indicate that the SAP will be exceeded. A better instrument (contract, BPA) should be established.}

_{As a previous billing official on the GPC program, I say violation. You can’t keep making purchases over and over (knowingly) if they end up exceeding SAP. Look up split disbursement (doesn’t matter that individual purchases are under, you also need to evaluate recurring purchases too). You have history from the previous year to indicate that the SAP will be exceeded. A better instrument (contract, BPA) should be established.}

That's wrong, and it's dumb. Use your head. The requirement is to pay a toll on demand. The requirement occurs when the driver arrives at the toll gate, not before. (I assume that you cannot pay the toll in advance or after the fact. You must pay when you arrive at the toll gate.) Paying tolls on demand is not splitting requirements, even if you know in advance that you will incur the toll X times in a given period. Each demand to pay is a separate event, unrelated to the demands before and after.

As a GPC Card Holder I have a follow-up question:

Is each toll charge billed separately or is it all billed monthly together on the same invoice?

If the sum of all tolls are billed on a single invoice and if that invoice is recurring on a monthly basis, then this is a recurring procurement and should not be paid using a GPC.

The issue is the recurring nature of the charges, not the amount.

You should look into entering into a BPA with the toll company.

Yes, I read into the post. My take from the post is what leo1102 has stated "If the sum of all tolls are billed on a single invoice and if that invoice is recurring on a monthly basis, then this is a recurring procurement and should not be paid using a GPC."

My take from jimschank post; each amount is a monthly bill. The GPC holder is getting one bill " One person in an offsite office has an ez pass account to pay the toll charges for the staff in that office.". So, It is not a on demand service where each toll is paid immediately.

I wasn't as clear as leo1102.

JimS,

In my view, each toll is a "micro-purchase" as defined at FAR 2.101:

“Micro-purchase” means an acquisition of supplies or services, the aggregate amount of which does not exceed the micro-purchase threshold.

The fact that all micro-purchases for the month are included on one bill does not mean that the purchase of all tolls in the preceding month are one micro-purchase.

If you were to buy an annual toll road permit today for $7,340 that allowed you to use the road for the next year, then that would be one micro-purchase.

I did some research into E-ZPass accounts. In New Jersey, E-ZPass is prepaid account from which individual toll charges are deducted:

You can establish a prepaid E-ZPass account using your credit card, personal check, or cash. The convenient credit card payment option automatically replenishes your prepaid account. Check and cash E-ZPass accounts have a higher replenishment threshold and are replenished by mailing or delivering a payment to the E-ZPass Customer Service Center.

When you establish an E-ZPass prepaid account, you receive a small electronic tag that attaches to the windshield inside your car. Within the tag is an electronic chip that contains information about your account. Each time you use a toll facility where E-ZPass is offered, an antenna at the toll plaza reads the vehicle and account information contained in your tag. The appropriate toll is then electronically debited from your prepaid account. A record of your transactions will be included in your periodic statement.

It appears that it works that way in all states, but I'm not sure. If this is what is happening in jimschank's case, with a prepaid account, then it would indeed be a monthly charge. Think of it as a severable service contract. The issue with such an account would not be splitting requirements, but the fact that the cumulative charge in a single fiscal year is for a single recurring service.

I'll chime in as a former Level IV AOPC...

The applicable threshold we're discussing is the Micro-Purchase Threshold (MPT), not SAP/SAT.

It's clear the recurring bill (monthly) is within the MPT, but the yearly total exceeds the MPT. While no intent exists to conduct a "split purchase" as no one is facing a lump sum exceeding the MPT and figuring a way to split it into smaller chunks, requirements are known to exceed the MPT on an annual basis. As such, some other contractual instrument should be put in place (ref FAR 13.301(bravo). [Had to use bravo instead of 'b' because it kept inserting an emoticon.]

A BPA is the most likely option and would be easy enough to implement. Simply get a Contracting Officer (probably the AOPC for the GPC) to execute a BPA with E-ZPass. A copy of the BPA or at least a reference to it should be maintained by the cardholder(s) making the payments. With the BPA in place, orders can be placed monthly IAW FAR 13.301(charlie)(2) to pay the bill.

Jon

Jon – The view you have expressed is one that I have experienced that many agencies have applied. I have been out of the office setting for a number of years but from my view I believe such a policy has been invented based on misplaced control issues implemented by agencies, and possibly the result of GAO or IG audits of card programs, and are no doubt based on issues of fiscal management, but not wise purchasing.

For the years of implementation of the purchase card where I was on board I had argued that the view of agencies that you have expressed is in direct conflict with the ideal of a card. Its intent for use is to be more than “simplified”. More importantly I find nothing in the FAR that demands that a card cannot be used for recurring purchases. In noting this I acknowledge the issue of split purchases but this is a different matter and to apply it to the matter in this thread plainly baffles me.

I worked in the old stubby pencil days and no one ever complained when a person would come to the imprest fund cashier month in and month out to get toll money. Further no one ever complained the same purchase order, for less than $3000, was written to the same vendor month in and month out to by toll tickets. Yet along comes the card and the misplaced now find that its constant use to make the purchase of a toll (in any form) demands a tool other than the card. Doing so should be more than simple and the card is it.

I am sure glad that the minds that have created this overkill are not the same that manage my personal purchase card as I would hate to imagine the bureaucratic turmoil I would be in if I had to set up a BPA or IDIQ contract at my local grocery store

The "guidance" for the use of the Gov't purchase card is confusing at best. See this Q and A posted on the DPAP web site:

Quote

24. We have personnel who take the Metro for official government meetings. Can I use the GPC to purchase Metro fare passes for these personnel?

Answer: No, travel related expenses are not authorized with the GPC.

Reference: Federal Acquisition Regulation (FAR) 2.101 micro-purchase definition; and DoD Charge Card Guidebook

Unquote

While one cannot use the GPC to buy Metro Cards, I have learned that one can use it to buy passes for highway tolls!

I have called the DPAP office and the Defense Travel Management Office to obtain an explanation as to why the GPC cannot be used and to obtain a recommendation on what contractual device to use. I await replies.

While one cannot use the GPC to buy Metro Cards, I have learned that one can use it to buy passes for highway tolls!

How do you know that the GPC can be used to buy passes for highway tolls?

I'm satisfied that the GPC can be used to buy $960 monthly passes for highway tolls. I like C Culham's note.

Maybe we need to differentiate between travel expenses for individuals and purchases of passes for government vehicles. They are different.

All the Forest Service towns in Southeast Alaska (where I live) are served by barges -- none of our towns is connected to the continental road system. The barge costs are always paid with GPC (it is VERY rare for a single shipment to exced the micropurchase threshold). If someone told us we could only use the GPC up to the point where the cumulative total amount of barge fees was the micropurchase threshold, well, we'd be having the same discussion as jimshank is having. We use the travel rules and processes for people on the ferries, and we use the GPC for goods on barges.

Jim, You can be as flexible or as constrained as your own organization allows you to be. You can try to teach correct principles, but you cannot force others to adopt your reasonable reasoning.

How do you know that the GPC can be used to buy passes for highway tolls?

e Mail from the GPC folks who said that we can't buy Metro passes.

i am getting mixed signals from the Pentagon on the Metro card issue. When I get some regulatory or statutory cites, vice opinions, I will share them.