Chairman Collins Introduces Bill to Eliminate Wasteful Spending in Federal Purchase Card Program

Washington, DC—Senator Collins today introduced the “Purchase Card Waste Elimination Act of 2005,” to help eliminate wasteful spending that can occur when the government neglects to pay attention to where it makes its purchases. Senator Collins has long been a champion of curbing government waste in her role as Chairman of the Committee on Homeland Security and Governmental Affairs. Last year, the Committee held hearings and Senator Collins released a Government Accountability Report on the government’s use of purchase cards.

“The American people have the right to expect the federal government to spend their tax dollars carefully and wisely. While this is true at all times, it is never more so than today when the government is running large budget deficits,” Senator Collins said. “This legislation is one way to reduce waste, fraud and abuse in government spending.”

Under the legislation Senator Collins introduced today, the Office of Management and Budget (OMB) would direct agencies to better train their cardholders and more effectively analyze their spending data. It would also direct the General Services Administration (GSA) to increase its efforts to improve its efforts to secure discounts with vendors and provide agencies with more guidance to reduce wasteful spending.

During last year’s hearings, the Committee learned about ways to save an estimated $300 million annually through better management of purchase cards. Purchase cards are, in essence, credit cards that agencies give to its employees for the purpose of obtaining goods and services for the federal government. Although government employees spend billions of dollars with purchase cards each year, federal agencies do very little to analyze the items obtained with purchase cards in an attempt to get a better price for the government.

The GAO report requested by Senator Collins analyzed purchase card use at the six federal agencies that account for 85 percent of government purchase card usage. As a result of that analysis, GAO estimated that $300 million per year could be saved if agencies improved their purchase card buying practices.