Increase the government purchase card limit

Abstract

The purchasing power of the government purchase card is not keeping pace with inflation and its present terms of use are neither efficient nor effective. A purchase card transaction limit increase would maximize resources, allow the Fleet Logistics Center to focus on more complex contracts, and increase mission readiness at operational units. When it was established in 1989, the government purchase card program’s transaction limit was $2,000. In 1994, legislation established the $2,500 micropurchase limit for supplies and services because the General Service Administration determined that 85% of contracts written were below $2,500. The $2,000 limit for construction continues as set by the Davis-Bacon Act of 1931, which was written before establishment of the minimum wage and has never increased for inflation. That $2,000 limit from 1931 currently has a buying power of $128 and, to meet the intent of the law, should be applied only to construction projects over $31,194. The purpose of this project is to explore the decision to increase the purchase card transaction limit. This project examines the regulations, risks, and concerns regarding an increase in the transaction limit. This research recommends that the government purchase card transaction limit be increased to between $8,000 and $13,000.