a.       The FAA purchase credit card i.e., Smart Pay Authorization Card, is the internationally accepted VISA credit card.  The purchase card is issued through General Services Administration (GSA) contract with a credit card bank, e.g., Nations Bank system.  FAA employees are authorized to use it in acquiring products and services.

b.       GSA is responsible for both administering the contract and dealing with the day-to-day operations of the Government-wide Credit Card Program.  The GSA Contracting Officer is the only individual authorized to alter the terms and conditions of the contract.  Copies of the contract, GS-23F-998004, may be obtained from the following address: General Services Administration, Federal Supply Service, Services Acquisition Center FCXST, Washington, D.C. 20406.  The address of Nations Bank is: Nations Bank; Government Card Services Unit; P.O. Box 1637; Norfolk, VA 23501-1637.

c.       The FAA credit card is intended to streamline procurement and payment procedures and reduce the administrative burden associated with traditional and emergency purchasing of products and services under the commercial and simplified acquisition procedures.  The credit card should be the “primary purchasing method” when vendors accept credit cards for commercial and simplified purchases, unless otherwise prohibited.

d.       The card issuing bank, Nations Bank has established an authorization process whereby the vendor checks via a telecommunications system each time the credit card is used.  This authorization ensures that the purchase is within the limits established for each individual account.

e.           Delegations of Purchasing Authority.

          (1)          The Chief of the Contracting Office (COCO) for each acquisition office within the region, center, and headquarters has the responsibility of managing its own credit card program and establishing its own internal processes for issuing the purchase cards and monitoring the program.  The COCO must delegate a person or persons to act as the Credit Card Program Coordinator.  The responsibilities of the Credit Card Program Coordinator include:

                   (a)          developing internal operating procedures within the scope of the applicable GSA contract;

                   (b)          ensuring that all approving officials understand and comply with established validation requirements;

                   (c)          submitting approved credit card forms to the card issuing bank or electronically transmitting through EAGLS System;

                   (d)          submitting changes for individual cardholder single purchase or monthly purchase limits, or approving official monthly office limits to the card issuing bank;

                   (e)          submitting account cancellations to the card issuing bank;

                   (f)          coordinating the card reissuance report with approving officials and informing the card issuing bank which credit cards should be reissued;

                   (g)          ensuring that the cardholder receives the proper training on the policy and procedures for the use of the card, including accountability for the following:

                             (i)          prior approval of card purchases;

                             (ii)          submission of receipts to the approving official;

                             (iii)          designation of accounting classification code data;

                             (iv)          completion of the required property management forms and submission to the applicable property management organization; and

                             (v)          identification and reporting of disputed items to the applicable accounting office.

                   (h)          ensuring that approving officials receive proper training on the policy and procedures for the use of the card, including accountability for the following:

                             (i)          validation of approved card purchases;

                             (ii)          validation of accounting classification code data; and

                             (iii)          reporting fraudulent or improper use of the card to the COCO.

                   (i)       receiving monthly management reports from the card issuing bank.

          (2)           Delegations of purchasing authority (DPA) are issued to nonwarranted individuals in the requiring organizations by the COCO or designee.  The delegation authorizes the use of the credit card, after these individuals have been trained on the proper use, financial control records, and property management restrictions of the credit card.

          (3)           Approving Officials are individuals within the requiring organizations who receive the same type of training on the proper use, financial control, and property management restrictions of the credit card, then monitor the activities of cardholders to ensure that purchases made by the cardholder are within applicable policies and procedures.  The Approving Official is normally the cardholder’s immediate supervisor or a higher level official. 

          (4)          Cardholders are individual FAA employees within the requiring organizations who have received a DPA from the COCO or designee granting the use of the credit card.  The DPA will establish a single purchase limit, above which the cardholder may not use the card.

          (5)           The credit card must be used only by the named cardholder.  Allowing someone other than the cardholder to use the card is considered an unauthorized purchase action which is subject to disciplinary action as outlined in Federal Aviation Personnel Manual (FAPM) Letter 2635.

          (6)           Both Approving Officials and cardholders must fully understand their responsibilities and be properly trained in procurement policies and restrictions, finance requirements, and internal procedures, as well as property management and control, as follows:

                   (a)          Procurement training - at a minimum, this should address labor laws, required sources of supply, conflicts of interest, and socio-economic policies of the FAA.

                   (b)          Finance training - this should address the requirements for safekeeping of purchase cards and account numbers; retention of receipts for charges and credits for purchases, returns and disputed items; recordkeeping for purchase card purchases, timely validation of monthly statements of account.

                   (c)          Summarization of accounting data on monthly statements of account; procedures to follow for account set-up (if not the responsibility of the Credit Card Program Coordinator), account changes and cancellation, disputes resolution, and procedures to follow if a purchase card is lost or stolen.

                   (d)          Property control training- it is essential that purchases of non-expendable property be reported to the appropriate property control manager for inclusion in the property inventory and management system.

f.          Administrative Matters.

          (1)           GSA Purchase Limitations.  The following purchase control limitations have been established by the GSA contract for each cardholder::

                    (a)          Single Purchase Limit - Approving officials will determine the appropriate dollar amount of single purchase limits to be established for each cardholder.  According to the GSA contract, the single purchase limits may not exceed $100,000.  Within FAA, each COCO retains the authority to establish maximum credit card single purchase limits for cardholders.  (See paragraph 2 below.)

                   (b)          Billing Cycle Purchase Limit - The approving officials will assign the cardholder a billing cycle limit.  Purchase limits may be assigned in increments of $100 up to $999,900.  This purchase limit will apply to the cardholder’s monthly billing cycle.

                   (c)          Billing Cycle Office Limit - The approving officials will assign a billing cycle office dollar limit.  An office limit may be assigned in increments of $100 up to $999,900.  The office limit is used by the agency primarily for budgetary control purposes.

                   (d)          Merchant Activity Code - purchases may be restricted by type of merchant (identified by merchant activity code).

                   (e)          Transaction Method - purchases may be restricted by method of purchase (over-the-counter or telephone purchases).

          (2)          Agency Purchase Limitations. The COCO at each region, center, and headquarters determines the maximum dollar level for DPAs to nonwarranted individuals.  Warranted Contracting Officers may make purchases up to $100,000 using the credit card (if within their warrant limits).

          (3)          Documentation. Each COCO should determine the extent of documentation to be maintained by cardholders.  The use of an individual procurement request (PR) form for each credit card transaction is optional; however, all purchase transactions made by a cardholder must be supported by a certification of funds availability and an accountable document, such as a sales slip, telephone log for telephone purchases, or a receiving report.

          (4)          Prohibited Purchases.

                   (a)          The GSA contract stipulates that the credit card may not be used for the following:

                             (i)          Rental or lease of land or buildings.  (The credit card may be used to purchase short-term commercial conference and meeting room space.)

                             (ii)          Cash advances, including money orders

                             (iii)          Telephone services controlled by the GSA or the local Office of Information Services or Regional Communications Office.  Telephone equipment may, however be purchased by the card.

                   (b)          The COCO at each acquisition Office has the authority to add other limitations; therefore, cardholders should contact the Credit Card Program Coordinator for additional information.  All FAA acquisition offices have prohibited use of the credit card for personal purchases or as identification when writing personal checks.

          (5)          Regulated Purchases.  Although the credit card is not intended for use as a travel card, or for meals or lodging expenses, it may be used for travel purchases when specifically authorized under the activity code where the mandatory GSA travel and subsistence card (Mastercard by Citibank) is not accepted.  All authorizations for merchants that are classified as travel and subsistence types of business will be denied, unless specifically authorized under the activity code.  Prior to using the credit card for travel purposes, cardholders are advised to obtain guidance from their cognizant accounting office.

g.       Selecting Potential Sources.

          (1)          Competition.

                   (a)          Competition is the preferred method of purchasing under the Acquisition Management System (AMS) and this policy applies to purchases using the FAA credit card.  Each cardholder must determine if the product or service is available through the mandatory sources of supply (Federal Prison Industries (UNICOR), National Industries for the Blind (NIB) or National Industries for the Severely Handicapped (NISH)) before making a purchase from the open market.

                   (b)          The AMS stipulates that small businesses and small businesses owned and controlled by socially and economically disadvantaged individuals should be given reasonable opportunities to provide products and services purchased by the FAA; therefore, cardholders should purchase from these sources whenever possible.

                   (c)          An appropriate number of vendors should be contacted to ensure quality products and services are delivered in a timely manner at the best value to the FAA consistent with the AMS.

          (2)          Single Source. Purchasing from a single source on a noncompetitive basis is the purchase of a product or service from the only feasible source which can meet FAA’s needs at the time.  Single source purchases under $10,000 may be made without file documentation regarding the extent of competition sought; however, when purchasing products or services valued in excess of $10,000, file documentation must include the rationale for contracting with a single source.

h.          Availability of Appropriations.

          (1)          The FAA shall comply with the Anti-Deficiency Act (31 U.S.C. 1341) and other fiscal laws.  Restrictions on the purposes for which appropriated funds may be used come from a variety of sources, including the U.S. Constitution, Appropriation Acts, and decisions of the Comptroller General.  GAO publication titled “Principles of Federal Appropriations Law” may be obtained by cardholders or Credit Card Program Coordinators in order to be knowledgeable of limitations on expenditure of appropriated funds.  Prior to each purchase, the responsible fiscal authority (normally the program office accounting certification officer) shall determine whether the expenditure is authorized by the appropriation and provide either a written certification that adequate funds are available, or condition the purchase upon availability of funds.

          (2)          Expenditures for the following purposes are commonly prohibited:

                   (a)          Food items for meetings and conventions;

                   (b)          Gifts and awards;

                   (c )          Membership fees; and

                   (d)          Personal expenses and furnishings (e.g., clothing, decorations, food for personal use.)

                   (e)          For additional guidance concerning any exceptions to these general rules, consult legal counsel.

i.          Acquisition of Training Services.  The FAA credit card is encouraged for use to the maximum extent possible to acquire training by appropriate training coordinators, if they are delegated cardholders.  It is important to ensure proper coordination of training requirements has taken place prior to training being purchased, e.g. completed training checklist, needs assessment, whether the training is being purchased by a training coordinator or not.

j.        Tax Exemption.  At the time of the purchase, cardholders should advise the merchant that the purchase is for official U.S. Government purposes and therefore is not subject to state or local tax.  If the vendor wants to clarify this, the back of the card includes an 800 number which may be called for verification.  Exceptions do exist for certain state taxes in certain states, i.e., New Mexico.  For this reason, cardholders should contact legal counsel regarding applicability of any exemptions or other issues related to state or local taxes for specific information about excepted states. 

k.          Validation of Purchases - Cardholder.  Each cardholder is responsible for validating all card purchases and credit transactions itemized on the monthly statement to the accountable documents; i.e., the cardholder’s copy of sales slips, credit slips, and telephone order forms.  These accountable documents must be verified to the cardholder statement to make sure that itemized purchase amounts are valid obligations and all credits for returned or disputed amounts are reflected on the monthly statement.  If the cardholder’s statement reflects charges for purchases not received, the amounts in question should be disputed (See paragraph l. below).  Cardholders should also ensure that purchases on their statement include no sales tax.  If sales tax is included, the tax should be disputed.

          (1)          Approving Official.  The approving official is responsible for ensuring all cardholders validate purchases and credits itemized on the statement and that all purchases and credits include the proper accounting classification data.  Approving officials must verify that all purchases were authorized and that copies of sales slips, credit slips, and telephone order forms are attached.  The Approving official must also notify the COCO of any unauthorized use of the card.

          (2)          Finance Office.  Finance offices receive monthly finance office reports from the card  issuing bank which reflect summary totals of all purchases and credits of each approving official and cardholder.  The finance office report represents the invoice from the bank and should be date stamped when received.  The finance office is responsible for certifying for payment all authorized card purchases.   

l.          Deficiencies/Disputes/Damaged Equipment.

          (1)     If the cardholder finds any discrepancies when reviewing the statement, the first step is to contact the vendor to seek resolution.  Generally, this results in a credit on the next statement.  A credit card dispute office (not to be confused with the Office of Disputes Resolution for Acquisitions for protests, claims, and disputes) may be located at each region, center, and headquarters for purposes of handling credit card disputes which cannot be resolved between the cardholder, the vendor, and the bank.  As a last resort for unresolved disputes, the Contracting Officer or the vendor may proceed according to the provisions of AMS Clause 3.9.1-1, Contract Disputes.

          (2)          The cardholder should return items found to be defective or faulty to the vendor and the vendor should initiate a credit that will appear on the account statement the following month.  If a purchase or transaction appearing on a cardholder’s statement is questioned, i.e., has not been received, or is an unauthorized charge, the cardholder or approving official must contact the NationsBank Government Card Service Unit by phone at 1-800-472-1424, or call collect at 1-757-441-4124 if outside the United States.  The cardholder will receive provisional credit.  Nations Bank will credit the transaction until the dispute is resolved. 

          (3)           Simultaneously with the return of the item to the vendor, or the identification of an erroneous charge, the cardholder should notify the credit card dispute office.  The credit card dispute office should also be advised of any returned purchases or disputed items which have not been credited to their cardholder statement within one month from the date the purchase was returned or the disputed item was originally reported.

m.      Lost or Stolen Cards.

          (1)          Reporting Lost or Stolen Cards.  If a cardholder loses or has the card stolen, the Credit Card Program Coordinator, the cardholder’s approving official, and the bank contact person must be notified immediately, to avoid liability for unauthorized purchases on the card.  The necessary information to report to the card issuing bank includes the cardholder’s complete name, card number, purchases made on the date lost or stolen, and in the event of theft, the date reported to the police.

          (2)          Card Reissuance.  The card issuing bank will issue a new  card to the cardholder within two working days from the time that the loss or theft is reported.  A cardholder who reports more than one incident of loss or theft within a 12-month period will require authorization from the cognizant acquisition office in order to have another card reissued.

n.          Accounting Classification Code Adjustments.  Each cardholder has a primary use or “built-in” accounting classification code based on the primary use of the card, i.e., whatever the office is primarily purchasing.  For example, Flight Standards offices may have a primary use of the card for aircraft rental.  The card may be used for purchases other than the “primary use” purpose; however, the action will require a different accounting classification code assignment.  When this situation occurs, it is essential that the cardholder advise the cognizant accounting office of the adjusted accounting classification code.  This may be done directly on the monthly statement itself or offices may elect to develop a special form to track accounting classification code changes.

The “third party draft” is a check-like instrument issued and drawn against and paid by an outside Government contractor or financial institution.  The third party draft (TPD) contract allows DOT modal administrations to secure TPDs from the contractor for authorized payments by a principal or alternate TPD official.  TPDs can only be issued in the exact amount to an employee or vendor to buy products and services where the vendor does not accept the purchase card.  It is commonly used in remote locations where an acquisition office is not readily available.  Policy and procedures related to the issuance, accountability, and responsibilities of third party officials and the use of third party drafts are covered in FAA Order 2700.36, Third Party Draft Manual.

 a.       Dollar Limitation on use of TPDs.  The limitation is set at the not-to-exceed level of $2,500.  This limit is stated in the Treasury Financial Manual, Volume 1,

Paragraph 4-3040.70(a), "Third Party Drafts, Amount of Limitations."  As stated in the Treasury Manual, this is the limit applicable to Third Party Drafts issued for routine imprest fund payments.

 b.          Additional Restrictions.  The TPD is intended for use for supplies and services immediately available in one transaction, generally over the counter.

 c.       Requests for third party drafts may be prepared on a locally acceptable form and be accompanied by authorized approvals and clearances.  Each request for a payment by a third party draft must be supported by a properly prepared document with attached applicable receipts and/or invoice.  Proper supporting documents are covered in FAA Order 2700.36, Third Party Draft Manual.  The document must contain the following information:

          (1)          Proper authorizations bearing all appropriate signatures, i.e. approving official, small purchasing authority’s signatures, i.e. delegation of procurement authority (DPA);

           (2)          Proper fund availability certification;

           (3)          The name of the vendor;

           (4)     A complete description of the items to be purchased, including the manufacturer’s or national stock number for each item purchased over $500.  The employee making the purchase must complete the required property management forms and submit them to the applicable property management organization;

           (5)     A complete accounting classification;

           (6)          The total dollar amount;

           (7)          Specify the name of the employee who will transact the purchase and who will transmit the third party draft to the vendor; and

             (8)            The Tax Identification Number (TIN) information, which must be obtained from the vendor by having them complete the “Payee/Company Information” section of the Vendor/Miscellaneous Payment Information Form. (See Appendix Attachment 2).

a.       The SF 44 is a pocket-size purchase order form designed primarily for on-the-spot, over-the-counter purchases of products and non-personal services.  It may be used by authorized FAA employees to purchase products and non-personal services when the vendor does not accept the purchase card, the third-party draft is not available and there are no other vendors in the area who accept either method listed who can furnish the item at a fair and reasonable price.   It is a multi-purpose form that can be used as a purchase order, receiving report, invoice, and public voucher while away from the purchasing office or at isolated activities.

 b.       SF-44s are issued in books of 25 orders as accountable property by the cognizant local contracting activity.  Books are issued to program offices and may only be used by Government employees with established delegations of procurement authority (DPA).  These individuals are responsible for making and substantiating the purchase and for resubmitting copies of the completed SF-44 to the local contracting activity an the servicing accounting office.

           (1)          Restrictions on Use.

                    (a)          The SF-44 can only be used when all of the following conditions exist:

                              (i)          The supplies or services are immediately available;

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

                              (iii)     Its use is determined to be more economical and efficient than use of other purchase methods; and

                              (iv)     A Government employee within the program office has an applicable DPA.  

                   (b)          There is no maximum dollar limitation stated in statute or regulation on the use of the SF 44 however, users are reminded that they cannot exceed the individual dollar limitation issued in their DPA and must adhere to labor laws when obtaining services and construction.  Special note should be paid to the requirements listed for contracts over $2,000 for construction which involve the Davis Bacon Act and service contracts exceeding $2,500 which fall under the Service Contract Act of 1965.

                    (c)          SF-44s should be considered the least desirable purchase method of those available.  Also, taxpayer identification and property item information should be obtained with its use, under certain circumstances.  

                   (d)          Consistent with the initiatives of the Cash Management Improvement Act and National Performance Review initiatives, Government agencies should use alternative payment mechanisms in lieu of SF-44s, e.g. credit card or third party drafts, when no other means of payment is available.  The Debt Collection Improvement Act of 1996 mandates that all payments made by the Government should be accomplished through electronic funds transfer mechanisms, i.e. Automated Clearinghouse/Electronic Funds Transfer.  In addition, when an FAA employee uses an SF-44 for payment of goods or services, the employee must:

                                                     (i)          Have the vendor complete all sections of the FAA TIN Number Request & ACH Enrollment Form (Combined) form (Appendix - Attachment 2) and attach it to the SF44 when submitting the form for payment to the appropriate accounting office.

                              (ii)          Obtain the manufacturer's or national stock number for each item purchased over $500, and must either record the information directly on the SF-44 or on a separate piece of paper and attach it to the SF-44.

                      (2)          Accountability.  Employees using SF 44s are accountable for the forms.  They should return them to the issuing office in instances where:

                    (a)          No SF 44 has been issued in the preceding 12 months; or

                    (b)          The employee is separating or transferring to another organization.

           (3)          Training.  The issuing organization should ensure that recipients of the

SF 44 are properly trained in their use and protection prior to their using them. 

           (4)          Loss, Theft or Misuse.  Individuals possessing SF 44s should protect them to the extent possible as if they were cash.  Individuals should notify the issuing office and the security office if SF 44s are lost, stolen, or misused.

          (5)            Storage.  The SF 44s should be secured and locked to minimize misuse, theft or loss.

          (6)          Transmittal.  SF 44s should be protected in transmittal.  Mediums such as registered mail may be considered.

          (7)          Completing the Form.  The following instructions supplement the instructions found on the form:

                   (a)          In completing the block “Ordered by,” remember, only Government employees with established DPA’s are authorized to make purchases.

                   (b)          In completing the block “Purpose and Accounting Data” assure availability of funds before making purchase.  Insert proper accounting code.

                   (c)          Use the reverse of the No. 4 -Green Copy to document any special explanations, e.g. why the VISA purchase method cannot be used.  Copy No. 4 goes to the contracting activity, Copy No. 3 goes to the servicing accounting office.

Attachment 1 is the Cardholder Statement of Questioned Item.