GSA Awards Contract for $700B Federal Charge Card Program

The General Services Administration on Tuesday announced that it has awarded two American banks with major contracts to manage the government’s next-generation charge card system.

GSA said that Citibank, N.A., and U.S. Bank would handle the implementation of SmartPay 3, the newest iteration of the federal charge card program. The contracts will facilitate a potential $700 billion in charge card expenditures and related payment transactions if the government exercises all of its extension options.

The GSA’s SmartPay program provides federal employees with chip-enabled charge cards, online accounts and other services that allow them to expense purchases, travel and fleet costs to their agencies. SmartPay 3 will replace the GSA’s current charge card program, SmartPay 2, when it expires on Nov. 29, 2018. The new contract runs through November 2021 with the option to extend for an additional 10 years. Agencies can now begin issuing task orders to contractors under SmartPay 3.

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“GSA’s SmartPay program provides agencies across government with payment solutions to streamline transactions, lower costs, and more-effectively deliver services to the American people,” said GSA Federal Acquisition Service Commissioner Alan Thomas in announcing the contract award Tuesday. “We worked closely with our industry and agency partners in developing the next generation of the GSA SmartPay program to ensure that GSA SmartPay 3 offers federal agencies more value and efficiency in carrying out their missions.”

The new contract continues both banks’ decade-long oversight of the government’s travel card program. Citibank and U.S. Bank are both signed onto the SmartPay 2 contract, along with J.P. Morgan Chase. GSA declined to release the number of companies that bid on the latest contract or comment on why J.P. Morgan didn’t win a slice of SmartPay 3.

In addition to managing the charge card program, the two banks will also give agencies access to their data-mining tools and those of their partners. Analyzing purchase-level information can help agencies spot and curb potential trends in fraud, waste and abuse, according to a GSA spokesperson.

GSA SmartPay is the world’s largest commercial payment program, serving more than 3 million accounts at 560 different federal agencies. The program launched in 1998, and in fiscal 2016, employees used SmartPay more than 91 million times to cover roughly $28.5 billion in transactions, according to GSA.

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