# Presentation: 816079

## Guidance for Government Charge Card Usage in Emergency Situations

**November, 2007**

**Guidance for Government Charge Card Usage in Emergency Situations**

## Contents

**Introduction**

**Management Responsibilities for Card Use in Emergencies**

- Purchase-specific
- Travel-specific
- Fleet-specific

**Cardholder Responsibilities for Card Use in Emergencies**

- Purchase-specific
- Travel-specific
- Fleet-specific

**Rules and Regulations**

-  Permanent authorities
-  Emergency-specific related authorities

**Additional resources**

## Introduction

- The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) defines an "Emergency" as any occasion or instance for which, in the determination of the President, federal assistance is needed to supplement state and local efforts and capabilities to save lives and to protect property and public health and safety, or to lessen or avert the threat of a catastrophe in any part of the United States.
- Emergencies can be declared by the President of the United States. in conjunction with state and local officials.  Additionally, per FAR 2.101, the Secretary of Defense can designate a “contingency operation”

## Introduction (cont.)

- In the event of an emergency, federal government charge card holders may be required to perform transactions using their purchase, travel, fleet, and/or integrated cards.  The purpose of this document is to help federal government card program management personnel and cardholders to:
- Understand their roles and responsibilities regarding charge card usage and management in emergency situations;
- Know how cards should be used in an emergency situation;
- Know the policies regarding emergency procurements;
- Know what to do if fraud or misuse of a government charge card is suspected; and
- Know where to go for more in-depth information.

## Management Responsibilities

*There are a number of management responsibilities for ****all charge card types**** that will help agency charge program management personnel effectively manage their card programs through emergencies.  Depending on the agency/organization, the following information may apply to Supervisors, Approving Officials (AOs), and/or Agency/Organization Program Coordinators (A/OPCs).*

## General Management Responsibilities

- Emergency use of the government charge card program has a number of management responsibilities related to card usage in emergencies, including:
- General preparation for emergencies;
- Purchase card responsibilities;
- Travel card responsibilities;
- Fleet card responsibilities;
- Controls for card use in emergencies; and
- Fraud prevention and response.

- These are described in greater detail on the following pages.

## General Preparation for Emergencies

- Identify, and maintain a list of, individual cardholders who may become active in an emergency situation (e.g., first responders, volunteers, contracting officers)
- Communicate to these cardholders that they may be involved in emergency response activities
- Communicate to these cardholders that you will be in contact with them in the event of an emergency
- Provide your contact information to all of your cardholders.  Each cardholder should know the name of their A/OPC.

- Supervisors and/or A/OPCs should:

## General Preparation for Emergencies (cont.)

- Communicate agency-specific rules for emergency card use to cardholders (if such rules exist)
- Establish and communicate internal policies and procedures for determining whether a card transaction is in support of emergency operations
- Enforce purchasing policies as required by the nature of the agency’s role in the emergency

- A/OPCs and/or Agency Management should:

## General Preparation for Emergencies (cont.)

- A/OPCs should review customer services polices for your charge card program; and coordinate with your bank to address the potential increase in demand and needs, e.g. 24/7 customer service, that may occur during an emergency situation

## Purchase Card Responsibilities

- Encourage cardholders and contracting officers to attend the emergency contracting course offered through Defense Acquisition University (DAU) and (if applicable) your agency
- Train Contracting Officers and other affected personnel to prepare them for the increased procurement needs that arise when an emergency occurs

- Supervisors and/or A/OPCs should:

## Purchase Card Responsibilities cont.

- Communicate that purchase cards should be the **primary vehicle** for making purchases.  Convenience checks should only be the **backup** **method** of payment
- Identify and document the emergency cardholders who are authorized to have higher single and monthly transaction limits
- Remind cardholders to use local vendors where possible

-  A/OPCs should:

## Purchase Card Responsibilities (cont.)

- Supervisors and/or A/OPCs should ensure that your agency has policies in place to guide charge card based procurements in emergencies, and that policies are compliant with recommendations made in
- GAO-06-1117 “Control Weaknesses Leave DHS  Highly Vulnerable to Fraudulent, Improper, Abusive Activity and
- GAO-07-300 “Hurricanes Katrina and Rita Disaster Relief:  Continued Findings of Waste Fraud and Abuse”
- including:
- Separation of duties, such as independent receipt, acceptance, and accounting of purchases made;
- Entering into arrangements with government vendors using GSA schedules or GSA Global Supply, or if those options are not available, working with other non-government vendors to provide reasonable pricing; and
- Developing policies that ensure appropriate A/O and Supervisor span of control over cardholders.

## Travel Card Responsibilities

- A/OPCs should revisit Merchant Category Code (MCC) blocks on travel cards and be prepared to review instances where emergency response personnel may lodge or eat at non-traditional facilities
- Supervisors and/or A/OPCs should remind cardholders not to initiate a forced authorization without their A/OPC’s permission
- A/OPCs should close cardholder accounts when the employee leaves the agency
- Supervisors and/or A/OPCs should remind cardholders to submit travel vouchers as soon as possible, in accordance with agency-specific travel policies
- Supervisors and/or A/OPCs should consider use of stored value or declining balance cards for temporary employees

## Fleet Card Responsibilities

- A/OPCS and/or AOs should continue transaction monitoring, identify and investigate any questionable purchases and contact vehicle leaseholder, i.e., the agency that owns the lease on the vehicle
- Supervisors and/or A/OPCs should communicate emergency contact information to cardholders for your charge card program office and your bank
- A/OPCs and/or AOs should promptly review forced authorizations and after hours customer service inquiries to ensure compliance with agency/organization policies

## Post-Emergency Responsibilities

- Continuously review open accounts to confirm the necessity of cardholders having a card
- Return per transaction and monthly transaction limits to prior “normal” levels
- Where applicable, deactivate accounts of employees who will not be using the card

- A/OPCs should:

## Emergency Card Use Controls

- Prepare card controls for emergency situations in advance
- Work with the issuing bank to raise monthly and single transaction limits consistent with agency-specific policies as well as the micro-purchase threshold indicated in FAR 13.201 (g) (i) and (ii)
- Ensure that high risk Merchant Category Codes (MCCs) are blocked except as needed to support effective emergency response
- Prepare for processing forced transactions on a case-by-case basis, for example:
- Clearly define process
- Identify resources to perform processes
- Identify criteria for review of transaction
- Evaluate the span of control for Approving Officials / Supervisors to make sure they are reasonable

- A/OPCs should:

## Emergency Card Use Controls (cont.)

- Supervisors and/or A/OPCs should establish and communicate internal policies and procedures for determining whether a transaction is in support of emergency activities
- Approving Officials (AOs) should conduct follow-up reviews of transactions within agency guidelines, but no later than 60 days after a given transaction
- AOs and supervisors must frequently evaluate spend and transaction limits to ensure appropriate limits are provided to cardholders

## Fraud Prevention and Response

- Fraud generally occurs in one of two ways:
- Cardholder Fraud
- Instances where an approved cardholder uses a card to make fraudulent or unapproved purchases
- Non-Cardholder Fraud
- Instances where the card, or the account number is used by anybody other than the cardholder
- Depending on how fraud occurs, it may be detected and reported by the merchant, bank, cardholder, Inspector General’s office, A/OPC, AO, or Supervisor.

## Fraud Prevention and Response (cont.)

- Cardholder Fraud
- Clearly communicate the penalties for fraud and misuse to cardholders, and ensure consistent enforcement of penalties
- Publish actions taken by agency for misuse of the charge cards
- Non-Cardholder Fraud
- Communicate fraud prevention precautions that cardholders can take to protect their card data, such as protecting personally sensitive documents and not providing personal information to an unconfirmed source

- All management within agencies can take precautions to help prevent fraud:

## Fraud Prevention and Response (cont.)

- For instances where **cardholder fraud** **is suspected the A/OPC, AO, etc. can**:
- Request additional data for further review from the cardholder, and if fraud is suspected, contact your local Inspector General’s office.
- For instances where **cardholder fraud** **is found, **appropriate supervisory actions may include the following (subject to your agency’s policies and coordination with your servicing human resources organization):
- Verbal counseling and warning;
- Written warning;
- Disciplinary action up to and including removal

## Fraud Prevention and Response (cont.)

- For instances where **non-cardholder fraud** **is suspected**:
- A/OPCs and/or AOs, can request additional data for further review (from the merchant, bank and/or the cardholder as necessary); and
- Contact your local Inspector General’s office if fraud is suspected.
- Close the account and reissue a new card to the cardholder and
- Capture lessons learned and apply them to fraud prevention precautions

## Cardholder Responsibilities

*Cardholders need to be aware of their card usage responsibilities when making purchases during a declared emergency.**Remember, “there are no ‘Emergency Cards’, just cards used during an emergency.”  ****Most regular procurement rules and regulations still apply.***

## Cardholder Responsibilities

- Cardholders have a number of responsibilities related to card usage during emergencies, including:
- Preparing for emergencies;
- General responsibilities;
- Purchase card responsibilities;
- Travel card responsibilities; and
- Fleet card responsibilities.

- These are described in greater detail on the following pages.

## Preparing for Emergencies 

- Keep up to date on applicable training for card use in emergency situations
- Be familiar with, and understand the precedence of government-wide and agency-specific policies and procedures for emergencies
- Find out who your A/OPC is and how to contact them in an emergency
- Be prepared to support emergency relief efforts
- Always know where your card(s) are located and keep them secure
- Keep in regular contact with your A/OPC or field supervisor to get the latest information regarding card use during emergency response efforts

## General Responsibilities 

- Remember to ensure that prices are reasonable
- Common sense determinations of reasonable prices may take into consideration the extraordinary circumstances of the emergency relief operations.
- Do not allow anyone else to use your card or account number.
- Do not use personal cards for government purchases.
- Do not mix your card types: travel vs. purchase vs. fleet; use the right card for the business at hand.
- If your card is declined, contact your bank and your A/OPC immediately.
- Contact your A/OPC first if you need to exceed your spend limit, seek an increase per transaction  and/or monthly purchase limit (as appropriate and consistent with your delegation of authority to make purchases).
- For purchase cards, remain mindful of your level of delegated acquisition authority.

## Purchase Card Responsibilities 

- Use local merchants (when applicable) to support the local economy.
- Attempt to resolve card disputes with vendors first, when possible.
- Keep documentation of all purchases, maintain a purchase log.
- Do not exceed your purchase authority. Have a separate contracting process through your servicing contract organization for purchases exceeding the micro-purchase threshold.
- Do not exceed your spending limit (unless an increase has been approved in accordance with agency procedures).
- Do not split purchases to get around the micro-purchase threshold.

## Purchase Card Responsibilities (cont.) 

- Follow government-wide and agency-specific policies for how transactions will occur (e.g., policies that dictate the necessary personnel that need to be involved in a transaction)
- Do not purchase items outside the mission-assigned funding authority of your agency, as per the National Response Plan
- More information on the National Response Plan can be found at** *****www.dhs.gov ***
- Follow agency regulations applicable to the acquisition of products and services in response to emergency situations
- Attend the emergency contracting course offered through Defense Acquisition University and your agency (if applicable)

## Travel Card Responsibilities 

- Reconcile card bills as soon as possible
- Pay your account balances in full on time
- File travel vouchers when you return from travel immediately, or every 10 days (or as stipulated by your agency’s policies) while on extended travel

## Fleet Card Responsibilities 

- Follow all agency/organization policies for use of fleet cards
- Observe all dollar and transaction limits authorized by the agency/organization (e.g., transactions per day, amounts per transactions)
- Use the fleet card only for authorized purchases, including vehicle fuel and authorized maintenance

## Fleet Card Responsibilities (cont.)

- Only use vehicle assigned fleet cards for the vehicle to which that card is assigned
- Report a lost or stolen fleet card immediately to your bank’s Fleet Service Representative or your Fleet Manager
- Contact your Fleet Manager for special concerns or questions as they can offer additional fleet card assistance in emergency situations

## Rules and Regulations

***Permanent Authorities****Permanent authorities are those currently in place that require no additional actions by Congress to become effective.*

## Emergency Procurement Flexibilities

- The memorandum for the President’s Management Council,
- “Guidelines for Using Emergency Procurement Flexibilities”
- addresses procurement flexibilities for emergency
- procurements.  Topics include:
- General considerations for agile contracting support; and
- Considerations for using simplified acquisition procedures.
- This document supplements, but does not supplant, existing
- agency guidance.  Additional information on emerging procurement can be found at:

- http://www.whitehouse.gov/omb/procurement/publications/emergency_procurement.pdf

## FAR 13.201

- Federal Acquisition Regulation (FAR) 13.201 states:
- For acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operations or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack, the micro-purchase threshold is--
- $15,000 in the case of any contract awarded and performed, or purchase to be made, inside the United States; or
- $25,000 in the case of any contract awarded and performed, or purchase to be made, outside of the United States.

## FAR 13.201 (cont.)

- Federal Acquisition Regulation (FAR) 13.201 states:
- Purchases made using this authority must have a clear and direct relationship to the support of a contingency operation or the defense against or recovery from nuclear, biological, chemical, or radiological attack

## FAR Part 18

- Federal Acquisition Regulation (FAR) Part 18 states:
- Emergency acquisition flexibilities, as used in this part, means flexibilities provided with respect to any acquisition of supplies or services by or for an executive agency that, as determined by the head of an executive agency, may be used--
- In support of a contingency operation as defined in 2.101;
- To facilitate the defense against or recovery from nuclear, biological, chemical, or radiological attack against the United States; or
- When the President declares an incident of national significance, emergency declaration, or a major disaster declaration.

## Stafford Disaster Relief and Emergency Assistance Act

- FAR 26.201 implements this act (42 U.S.C 5121)
- Agencies must give preference, to the extent feasible and practicable, for contracting with local organizations, firms, or individuals for debris clearance, distribution of supplies, reconstruction, and other major disaster or emergency assistance activities

## Local Community Recovery Act of 2006

- Public Law 109-218, “Local Community Recovery Act of 2006,” signed by the President on April 20th, 2006
- Clarified preference for local firms in the award of certain contracts for disaster relief
- Contracts may be awarded based on a specific geographic area
- Current law requires, to the greatest extent possible, that contracts and awards be given to organizations, firms, and individuals “residing or doing business primarily in the area affected by a disaster or emergency”

## 
Rules and Regulations

**Rules and Regulations**

***Specific Emergency Related Authorities****Emergency related authorities are those that are made effective to specifically address immediate emergencies.*

**Rules and Regulations**

## Specific Emergency Related Authorities

- Due to past emergencies, most recently Hurricane Katrina, there have been some changes to regulations and guidance around charge card use.  The majority of these regulations “relaxed” use restrictions on the charge cards, while some tightened management controls.
- The following slides give examples of laws and/or regulations that have been enacted/promulgated in previous emergencies.  Unless otherwise indicated, please note that these examples are provided for illustrative use only, and do not pertain to a different emergency/contingency operation unless future legislative and/or regulatory action is taken.

## Title XIV of Public Law 108-136

- In the aftermath of Hurricane Katrina, the emergency
- procurement authorities authorized by section 1443 of the
- Services Acquisition Reform Act of 2003 (Title XIV of Public
- Law 108-136) were available.  For example:
- FAR 19.502-1 requirements for setting aside acquisitions did not apply to purchases of $15,000 or less for acquisitions used to support contingency operations; and
- Threshold for application of FAR 52.225-1, Buy American Act – Supplies, and FAR 52.225-13, Restrictions on Certain Foreign Purchases, is $15,000 for acquisitions that, as determined by the agency head, are to be used to support contingency operations.

## Davis-Bacon Act Suspension

- The Davis-Bacon Act, passed in 1931 during the Great Depression, sets a minimum pay scale for workers on federal contracts by requiring contractors to pay the prevailing or average wage in the region.
- During the aftermath of Hurricane Katrina, President Bush signed Proclamation 7924, suspending the application of the Davis-Bacon Act for construction contracts that were performed in the counties listed in the proclamation.

## Public Law 109-295

- Sections of The Department of Homeland Security
- Appropriations Act outline a number of requirements that
- agencies must follow in the event of a declared emergency,
- including:
- Providing justification for not awarding a contract to a business that is primarily based in the area affected by a disaster;
- Minimizing the excessive use of subcontractors by the primary contractor to perform work; and
- Developing advance lists of contractors that are willing to perform emergency relief related activities.

## GSA Office of Government-wide Policy (OGP)

- The GSA OGP may waive certain provisions of the Federal
- Travel Regulations (FTR) during emergencies.  Examples
- include:
- In September 2005, certain provisions of the FTR governing the authorization of actual subsistence expenses for official travel (both TDY and relocation) were temporarily waived as a result of Hurricane Katrina (GSA Bulletin FTR 05-06); and
- In October 2004, temporary quarters subsistence expenses (TQSE) §302-6.9 of the FTR requiring that temporary quarters be in a reasonable proximity to the new official station were waived for the areas affected by Hurricanes Charley, Frances, Ivan, and Jeanne (GSA Bulletin FTR 05-2).

## 
Additional Resources and References

**Additional Resources and References**

*The references on the following pages provide A/OPCs and cardholders the opportunity to learn more about the use of government charge cards.*

## OMB Circular A-123, Appendix B

- OMB Circular A-123, Appendix B, “Improving the Management of Government Charge Card Programs”, provides guidance on implementing strong internal controls
- This publication addresses planning, training, disciplinary actions, creditworthiness, and best practices of the charge card program
- A copy of the publication can be obtained from the OMB website at: _[http://www.whitehouse.gov/omb/circulars/index.html](http://www.whitehouse.gov/omb/circulars/index.html)__ _

## GSA Charge Card Resources

- GSA provides a number of generic training resources to support proper charge card use across the government.
- Training Courses
- Purchase Card A/OPC *and* Cardholder Training Courses
- Travel Card A/OPC *and* Cardholder Training Courses
- Annual GSA SmartPay® Conference
- The conference includes a number of training courses for program management personnel
- Course presentations are posted on the GSA SmartPay® website at:  _[www.gsa.gov/gsasmartpay](http://www.gsa.gov/gsasmartpay)__ _

## GSA Charge Card Resources (cont.)

- Program Management Materials
- A Guide for Managing Your GSA SmartPay® Travel Charge Card Program
- Blueprint For Success: Purchase Card Oversight
- Best Practices Guide
- Cardholder Materials
- Helpful Hints for Purchase Card Use
- Helpful Hints for Travel Card Use
- Helpful Hints for Fleet Card Use

## GSA SmartPay® Program Office 

- The GSA SmartPay® Program office is a great source for more information on the proper use of cards
- Get in touch with your GSA SmartPay®  point of contact for your agency; or
- Visit the GSA SmartPay® website at _[www.gsa.gov/gsasmartpay](http://www.gsa.gov/gsasmartpay)_