02-31948. Defense Federal Acquisition Regulation Supplement; Purchase Card Internal Controls

AGENCY:

Department of Defense (DoD).

ACTION:

Proposed rule with request for comments.

SUMMARY:

DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to add policy on internal controls for proper use of the Governmentwide commercial purchase card.

DATES:

Comments on the proposed rule should be submitted in writing to the address shown below on or before February 18, 2003, to be considered in the formation of the final rule.

ADDRESSES:

Respondents may submit comments directly on the World Wide Web at http://emissary.acq.osd.mil/​dar/​dfars.nsf/​pubcomm. As an alternative, respondents may e-mail comments to: [e-mail]. Please cite DFARS Case 2002-D025 in the subject line of e-mailed comments.

Respondents that cannot submit comments using either of the above methods may submit comments to: Defense Acquisition Regulations Council, Attn: Ms. Angelena Moy, OUSD(AT&L)DPAP(DAR), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062; facsimile [phone]. Please cite DFARS Case 2002-D025.

At the end of the comment period, interested parties may view public comments on the World Wide Web at http://emissary.acq.osd.mil/​dar/​dfars.nsf.

FOR FURTHER INFORMATION CONTACT:

Ms. Angelena Moy, [phone].

SUPPLEMENTARY INFORMATION:

A. Background

This proposed rule revises DFARS subpart 213.3 to add policy on internal controls for proper use of the Governmentwide commercial purchase card and convenience checks. The rule implements recommendations made by the DoD Charge Card Task Force, in its final report dated June 27, 2002, to strengthen management of the purchase card program.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule pertains primarily to internal DoD procedures for use of the Governmentwide commercial purchase card and convenience checks. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2002-D025.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

List of Subjects in 48 CFR Part 213

• Government procurement

Michele P. Peterson,

Executive Editor, Defense Acquisition Regulations Council.

Therefore, DoD proposes to amend 48 CFR part 213 as follows:

1. The authority citation for 48 CFR part 213 continues to read as follows:

Authority: 41 U.S.C. 421 and 48 CFR chapter 1.

PART 213—SIMPLIFIED ACQUISITION PROCEDURES

2. Section 213.301 is revised to read as follows:

213.301

Governmentwide commercial purchase card.

(1) Only formally appointed and trained cardholders are authorized to use the purchase card.

(2) Do not split requirements exceeding the micro-purchase threshold or the cardholder's single purchase limit into several purchases that are less than the applicable threshold in order to use the purchase card (see FAR 13.003(c)).

(3) Do not use the purchase card to issue a task or delivery order that exceeds the cardholder's single purchase limit.

(4) When ordering against a Federal Supply Schedule—

(i) Comply with the requirements of FAR 8.404 and 208.404; and

(ii) Retain best value documentation with the cardholder's purchase card file.

(5) When ordering against a blanket purchase agreement, comply with the requirements of FAR 13.303-5.

(6) For each order exceeding $2,500, comply with the reporting requirements of subpart 204.6.

(7) Do not issue purchase cards to contractors. Under certain conditions, GSA can authorize contractors to establish cards directly with the issuing bank. Refer contractors that ask for a card to GSA. A listing of GSA points of contact can be found on the Internet at: http://www.gsa.gov/​Portal/​content/​ offerings_content. jsp?contentOID=119199& contentType=1004.

3. Sections 213.301-70 through 213.301-72 are added to read as follows:

213.301-70

DoD Governmentwide commercial purchase card program responsibilities.

(a) The DoD Purchase Card Program Management Office administers the DoD Governmentwide commercial purchase card program on behalf of the Director of Defense Procurement and Acquisition Policy. Specific procedures and guidelines for the program can be found in the following documents:

(1) DoD 7000.14-R, Financial Management Regulation, volume 10, chapter 10, section XXXX, available on the Internet at http://www.dtic.mil/​comptroller/​fmr.

(2) DoD Purchase Card Concept of Operations, available on the Internet at http://purchasecard.saalt.army.mil/​ ConOps,%2031%20Jul%2002.pdf.

(b) Agency heads are responsible for ensuring that management controls are in place for proper use of the card. Local commanders are responsible for ensuring that the local purchase card program maintains internal controls that support proper use of the card.

(c) The penalties for purchase card misuse or abuse by civilian or military members may include, but are not limited to, reprimand, dismissal, and/or imposition of fines or other criminal penalties.

213.301-71

Overseas use of the Governmentwide commercial purchase card.

(a) “United States,” as used in this section, means the 50 States and the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, Wake Island, Johnston Island, Canton Island, the outer Continental Shelf lands, and any other place subject to the jurisdiction of the United States (but not including leased bases).

(b) An individual appointed in accordance with 201.603-3(b) also may use the Governmentwide commercial purchase card to make a purchase that exceeds the micro-purchase threshold but does not exceed $25,000, if—

(1) The purchase—

(i) Is made outside the United States for use outside the United States; and

(ii) Is for a commercial item; but

(iii) Is not for work to be performed by employees recruited within the United States;

(iv) Is not for supplies or services originating from, or transported from or through, sources identified in FAR Subpart 25.7;

(v) Is not for ball or roller bearings as end items;

(vi) Does not require access to classified or Privacy Act information; and

(vii) Does not require transportation of supplies by sea; and

(2) The individual making the purchase—

(i) Is authorized and trained in accordance with agency procedures;

(ii) Complies with the requirements of FAR 8.001 in making the purchase; and

(iii) Seeks maximum practicable competition for the purchase in accordance with FAR 13.104(b).

(c) A contracting officer supporting a contingency operation as defined in 10 U.S.C. 101(a)(13) or a humanitarian or peacekeeping operation as defined in 10 U.S.C. 2302(8) also may use the Governmentwide commercial purchase card to make a purchase that exceeds the micro-purchase threshold but does not exceed the simplified acquisition threshold, if—

(1) The supplies or services being purchased are immediately available;

(2) One delivery and one payment will be made; and

(3) The requirements of paragraphs (b)(1) and (2) of this subsection are met.

213.301-72

Convenience checks.

(a) Convenience check purchases are subject to the same policies and responsibilities as are applicable to the Governmentwide commercial purchase card. See the DoD Financial Management Regulation, volume 10, chapter 10, section XXXX, for the procedures for convenience check purchases.

(b) Use a convenience check only when—

(1) The amount of the purchase is $2,500 or less (however, see the DoD Financial Management Regulation, volume 10, chapter 10, section XXXX, for overseas contingency use);

(2) Use of the Governmentwide commercial purchase card is not feasible;

(3) Maximum efforts have been made to find and use vendors that accept the Governmentwide commercial purchase card;

(4) All alternatives to accomplish the same purpose have been evaluated; and

(5) A convenience check has been determined to be the most advantageous method of purchase.

(c) Write convenience checks only for the amount of the purchase.