Agencies push IMPAC IT buys to new heights

Charges on the popular federal Visa card grew to more than $4.8 billion from $2.9
billion in fiscal 1996, and transactions rose to 11.5 million from 7.3 million in 1996,
according to the U.S. Bank of Minneapolis.


The bank's subsidiary, Rocky Mountain Bank Card System, issues the cards through a
General Services Administration program.


Computer hardware and software were among the top 10 IMPAC buying categories.


Initially, the single-purchase IMPAC limit was $2,500, but individual agencies have
raised their thresholds to $5,000, $25,000, even $100,000, a GSA spokesman said.


As of Oct. 30, more than 75,000 IMPAC cards had limits above $2,500, according to U.S.
Bank. It had issued more than 264,000 cards as of Sept. 30, so almost 30 percent of card
holders now have single-purchase limits higher than $2,500.


U.S. Bank and GSA are not alone in their enthusiasm for the program. Agencies have
saved an average of $54 per transaction by using the card, according to a 1994 GSA study
cited by Chris Pieroth, U.S. Bank's senior vice president for government services.


Vendors, instead of waiting 30 days or more for payment as they would for goods and
services bought using purchase orders, receive electronic transfer payments in their bank
accounts within three business days. U.S. Bank retains a small percentage of the payments.


And with the Defense Department's Oct. 1 designation of the card as the preferred
procurement method for buys of less than $2,500, the IMPAC program should grow even more
in fiscal 1998.


DOD has 107,000 IMPAC cards, said Bruce Carnes, deputy director for resource management
at the Defense Finance and Accounting Service in Arlington, Va. Most card holders are in
the Army, partly because it was the first service to finish certifying personnel under new
procedures that push responsibility out from DFAS to the cardholder and certifying
officer.


The Marines completed their certification training in October, Air Force personnel are
being certified this month, and Navy certifiers will be trained later this winter, Carnes
said. IMPAC use has let DFAS cut its billing rate in half from $24.96 to $11.66 per line
item, he said.


DFAS expects a reduction in delinquent payments as well as discounts for early payments
to U.S. Bank, Carnes said. Most DFAS payments have been on time, he said.


The Veterans Affairs Department is the largest civilian user of IMPAC cards, based on
dollars spent and transactions, Pieroth said. More than 55 percent of IMPAC transactions
come from civilian agencies and the rest from DOD.


Card-using agencies seem to search first for a "comfort level that the card is not
abused and that there are controls," Pieroth said. As they grow more confident, they
distribute more cards to personnel throughout the organization and eventually begin
looking for new ways to use the cards.


"It encourages creativity and innovation at the field level," Pieroth said.
Some agencies issue their own guidelines to IMPAC users.


Although some in government argue that agencies are diluting their purchasing clout by
distributing the IMPAC cards widely instead of concentrating orders with a few suppliers,
some card holders insist they save money with the card.


One Navy user said that although vendors might not give IMPAC buyers discounts,
contracting administrators want federal buyers to spend as little time as possible
selecting sources once they have set their small-purchase requirements.


"Obviously, I'm not going to pay $500 for a hammer. Common sense still
operates," said Francis X. Duggan, contracting specialist with the Naval Sea
Logistics Command in Mechanicsburg, Pa.


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