GPC efficiencies may yield greater savings
May 9, 2013
JOINT BASE SAN ANTONIO-FORT SAM HOUSTON, Texas (May 9, 2013) -- As installation garrison leaders continue to search for cost savings in today's uncertain fiscal environment, more are finding it in an unlikely source -- their Government Purchase Card Program administration.
Mission and Installation Contracting Command GPC Program officials are helping ensure Army and federal customers across the country are capitalizing on available rebates through diligent administration of their GPC accounts.
"Rebates are paid quarterly based on the volume of transactions for that quarter and timely payment," said Guy Hunneyman, a business manager with the MICC Oversight and Assessment Branch. "So the faster billing officials certify accounts and the bank is paid, the higher the rebate."
The GPC program allows individuals at the lowest level of government organizations and agencies greater efficiency in the procurement of commercial goods and services from merchants. With a single purchase limit of less than $3,000, Hunneyman said accounts typically generate rebates of 1 to 1.3 percent. Accounts that are delinquent get little or no rebate.
In fiscal 2012, the MICC managed more than 1.2 million GPC transactions valued at $1.3 billion, said Gary Pinion, who leads a group of four business manager at the MICC headquarters. This fsical year, GPC cardholders have made more than 525,000 transactions totaling more than $575 million.
"When you consider the number of accounts to manage and installations across the continental United States, we're the largest Army GPC program," he said.
Through the second quarter of this fiscal year, MICC GPC administrators have helped return more than $6 million to its military and federal customers through rebates. This amount is trailing an annual trend of between $15 and $19 million in rebates.
"Rebates are down because we're spending less; the sequestration is impacting everybody," Pinion said. "So what we're getting back in rebates and transactions is based on what's being spent by the customers. As money is released, we'll see spending go up and rebates increase if managed in a timely manner."
In fiscal 2012, $15 million was returned in GPC rebates. Although savings this year lag those from the previous year due to decreased spending, today's budgetary conditions underscore a critical importance of realizing every potential savings opportunity and developing responsive contracting solutions.
The amount of rebates represents a little more than 75 percent of what is available, according to Pinion. If you do the math, approximately $4 million in rebates go uncollected each year. Bringing greater emphasis to this oversight is a new approach of using big data.
GPC business managers at the MICC set out to first make the program more efficient by taking a closer look at activity across all of its account activity. They found that about half of the GPC card accounts were not necessary and instead posed an administration burden.
"We've been reducing the number of cardholders the last couple of years to make it lean by eliminating accounts that were excessive, duplicate and inactive," Pinion said. "The fewer number of cards also make for less risk."
An initial review of the program identified more than 30,000 cardholders and 15,000 billing officials, all administered by slightly more than 100 MICC personnel responsible for managing the day-to-day GPC operations. Following a scrub, Hunneyman said the number of active cardholders and billing officials were each reduced by 43 percent to less than 13,000 and about 6,500, respectively, with a negligible change in the spending activity.
During this process, they teamed with the MICC Knowledge Management Branch to create the Card Transaction Analysis Tool, or CATALYST, to analyze activity across the GPC Program.
"I saw the amount of data that was available to the GPC team and possibility of creating such a tool," said Harry Staley Jr., a procurement systems analyst with the knowledge management branch. "We brought our skills together to develop this tool, because it was taking several weeks to conduct surveillance on GPC accounts."
Staley added the no-cost, Microsoft Excel-based tool pulls information and reporting data at the U.S. Bank billing official level and applies MICC codes to yield more than a dozen reports that break down data to the major command, installation and cardholder levels, which prove vital in decision making. Due to the effectiveness of CATALYST and value in analyzing data at the installation level, he said the tool will be fielded to MICC contracting offices in the coming months.
"It identifies the types of business the transactions fall into as well as provides analysis breaking down the data … outlining delinquent accounts, inactive accounts, rebates, fraudulent, suspended, possible split purchases, contract opportunities, span of control, questionable spend patterns, top merchants and other reports giving the analyst the ability to uncover trends previously concealed," Staley said.
GPC business managers apply this data when engaging resource management personnel at the major command level to identify areas requiring attention. Their analysis is also communicated at the leadership level when the MICC commanding general meets with leaders throughout the Army.
"We can calculate best-case scenarios on the amount of potential rebates a major command could have received and the amount they have lost," Hunneyman said. "Now that we can break everything out, we've got a better set of data to analyze and can provide more accurate information to resolve challenges all the while building better relationships with major commands."
MICC leaders can also capitalize on the data analytics by gaining insight valuable in managing its GPC workforce at a time of declining resources. Following the activation of the MICC in 2009, the number of agency or organization program coordinators at the headquarters and across the command has grown in order to keep pace with administering the expanding number of accounts fixed to the program.
The MICC's primary supported activities include the U.S. Army Installation Management Command, U.S. Army Forces Command, U.S. Army Training and Doctrine Command, U.S. Army North, U.S. Army Reserve Command and U.S. Army Medical Command. GPC Program administrators also support university ROTC detachments, recruiting centers and Military Entrance Processing Stations across the country.
"In order to fully manage our manpower, having the right number of cards out there allow us to have the right number of people out there," Pinion said. "All of the inactive cards were giving a false manpower review."
Most of the MICC program managers are dedicated to the GPC Program full time, but often must rely on the assistance of analysts or other contracting personnel when the number of accounts they manage exceed a regulatory 300-to-1 ratio. Thus, larger installations that call for larger programs also require a greater number of billing officials and alternates.
A reduction in the number of cardholders can lead to a reduced workload and shift of manpower resources to other contracting priorities.
By leveraging the efficiencies gained through increased oversight and innovative tools, MICC officials hope to achieve 85 percent of all available GPC Program rebates or greater. That command benchmark takes into account that some challenges leading to delays are beyond their control. Chief among those are hurdles with the General Fund Enterprise Business System, or GFEBS, which shares financial data across the Army; and a constant need for training resulting from personnel rotations.
"Training is critical not only for cardholders and billing officials, but also for our program coordinators as this process becomes more complicated and systems driven." Pinion said. "Agency or organization program coordinators require a skill set of program management and oversight to manage those programs. That's why it's important that we get the right people at the right locations."
The MICC is responsible for providing contracting support for the warfighter throughout Army commands, installations and activities located throughout the continental United States and Puerto Rico. In fiscal 2012, the command executed more than 58,000 contract actions worth more than $6.3 billion across the Army, including more than $2.6 billion to small businesses.