GSA SmartPay Program

SmartPay allows government employees to use a corporate credit card to purchase goods and services from a wide variety of suppliers.  SmartPay was designed to simplify government “micro-purchases” with a dollar value of under $3000.  Government research found that the cost of issuing a purchase order, processing an invoice and cutting a check to be $75 per transaction on average.  As a result, the procurement and accounts payable groups at agencies might have been spending $75 to process a $25 or $50 purchase. 

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Corruption in Government Procurement – Bananagate, Lockheed and Operation Ill Wind

On the morning of February 3rd, 1975 Eli Black, the Chairman and President of United Brands Company, arrived early to his office on the forty fourth floor of the Pan Am building in Manhattan.   Using his briefcase, Black broke open the window then jumped to his death.  Investigations into Black’s death uncovered a large conspiracy between United Brands and the government of Honduras. The incident involved taxes on banana exports from the Central and South American countries such as Honduras, Guatemala, Ecuador, Columbia, Nicaragua, Panama and Costa Rica. 

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Primer on Commercial Credit Cards

If you have a corporate American Express card that you use for travel and entertainment expenses at work then you are already familiar with the concept of a commercial credit card.  Selected workers are issued corporate credit cards which can be used for low-dollar value reimbursable expenses.  If an employee wishes to purchase an airline ticket, office supplies or training materials they simply present their card to the supplier.  There is no need for the buyer to issue a purchase order or the supplier to send an invoice.  The supplier will be reimbursed by the banks via the credit card network in two to three days.  At the end of each month a statement will be sent to the employee with all of the charges they have accrued through the card.  The employee is then responsible for submitting the appropriate documentation to justify the expense.

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