Purchasing Cards – Why 50K Feels Different To Different Public Organisations

The US website Government Executive reported last week that the US military “wants to accelerate procurements by raising the “micro-purchase threshold” for using a government credit card from the current $3,000 maximum to $10,000 as part of the fiscal 2017 Defense authorization act.

The proposed language, first reported by the nonprofit Project on Government Oversight, would also require the Office of Management and Budget to update its guidance to help ensure that agencies follow “sound acquisition practices when using the government purchase card” and “maintain internal controls that reduce the risk of fraud, waste and abuse.”

Whilst the increase in the spend limit to $10,000 has not actually been approved, this interested us on several counts. My personal experience as a CPO in three large organisations, one of them a UK government department, was that Purchasing Cards were a useful tool for low-value procurement, and I certainly pushed their usage further in two of my three CPO roles.

Nigeria Arrests Senior Officials on Corrupt Procurement of Arms Charges to Tune of $15 Billion

It would be remiss of us not to mention the Nigerian arms fraud debacle that has swept the internet ‘newsrooms’ recently. Vice President Yemi Osinbajo, speaking on Monday, said that about $15 billion had been stolen from Nigeria’s public funds during the previous administration through fraudulent arms procurement deals. He is noted to have said that this “mind boggling” sum equates to “more than half of the current foreign reserves of the country” – a country which represents Africa’s largest oil exporter, already suffering the effects of the drop in crude oil prices on its state coffers, given oil sales make up about 70 percent of the national income.

Tens of years of endemic corruption have left a small group of elite rich among otherwise poverty-striken Nigerians. President Muhammadu Buhari was elected last year, after the previous tenure of Goodluck Jonathan on the strength of his commitment to fight corruption.

The Law of Unintended Consequences Drives Public Procurement To Frameworks

Like most governments and the Commission itself, the UK government wants to make public procurement more transparent and open up contracts to more suppliers, including smaller firms (SMEs). But sometimes the “law of unintended consequences” kicks in. That means we see outcomes that are not the ones foreseen and intended by a usually well-meaning and purposeful action. Here is a great example.

In the Public Contracts Regulations 2015, one of the steps taken by the UK government, which was beyond the requirements of the new EU directives, was designed to open up procurement by mandating greater use of the government’s Contracts Finder website, which lists public contracting opportunities. Here is the guidance from the UK government, and this is one of the key elements.

“Contracting authorities are required to ensure that any new procurement opportunities, above thresholds, are published on Contracts Finder (in addition to, or instead of any other portal or publications route they may currently use).

Categorized as Legal