This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its March 2012 report entitled The Government Procurement Card, the United Kingdom National Audit Office found irregularities, poor data management, and fragmented spending in its review of the government purchasing card program. As the report noted, the Government Procurement Card “was introduced in 1997 as a convenient and cost‑effective way to make low‑value purchases.” However, the use of the Government Procurement Card came under increased scrutiny following media reports that raised concerns of apparent misuse, and risked “financial loss and reputational damage” to the government.
The report found that each central department set its own policies and controls over approximately 24,000 cards. This resulted in the government’s central data being “incomplete and inconsistent.” In fact, that data failed to “provide an accurate picture of Government Procurement Card spending across government.” The report also found that the Cabinet Office did not have an accurate picture of usage activity, since centrally collected data could not be properly mapped to the data collected by individual departments.
While the report noted that “the Government Procurement Card can be a cost‑effective way for central government to procure goods and services, with benefits in terms of convenience and reduced administration”, it also found that the use of the purchasing card “comes with a degree of reputational risk which is heightened by a lack of clear central guidance on when it is the most appropriate procurement route.” The report recommended that Cabinet Office “work with card providers and departments to develop a consistent way to gather data, and report on spending” so that the central government and various departments could design appropriate controls with clear objectives. With respect to cost savings, the report also concluded that “it is not clear when the Card is the most value-for-money procurement option” and recommended that the “Cabinet Office should revisit the value‑for‑money business case for the Card and clarify how it should, and should not, be used.”
