COLUMNS BY THE EDITOR - ISSUE #3
"The Supply Lines"
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 SKCS(SW/AW)
Charles (Chuck) Zwierzynski
EDITOR - Navy Storekeeper.com
EMAIL - webmaster@navystorekeeper.com
BACKGROUND: +20 Years Active Duty
DUTY STATIONS:
COMFLEACT Yokosuka Japan, USS MIDWAY, USS INDEPENDENCE, USS KITTY HAWK, NAVPHIBASE
Coronado CA, COMCRUDESGRU THREE (onboard USS ABRAHAM LINCOLN), JCSC Larissa Greece, NAF
Mildenhall United Kingdom - CURRENT ASSIGNMENT: PCU GEORGE H. W. BUSH
VOLUNTEER MENTOR FOR: 1 Navy.com
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Procurement Ethics -
What Is Proper & What Isn't? |
On a recent day of
reviewing changes to instructions and policies, one item truly leapt from the page I was
reading. And after 10 years of the expansion
of the Government Purchase Card (GPC) program, I was amazed. A one line mention from the December 2004 Monthly
Meeting Minutes of the Department of the Navy E-Business Purchase Card Teleconference:
"The Semi-Annual Review: There is an increase in Split Purchases as well as a large
jump in Prohibited Items.”
To say the recent headlines regarding purchase card abuses have been startling is an
understatement. Serious questions have to
emerge when you read something like this.
Are our ethics in Navy supply procurement being compromised or are we just not listening?
I recall the days in the early 1990s when, as a junior storekeeper, I was tasked with
procuring a $10 bolt with a DD1149 Purchase Document, processing the paperwork, passing it
to Purchasing, waiting a week or two before the buy was accomplished, getting a copy of
the Purchase Order, awaiting receipt, processing the receipt, making the issue, receiving
the invoice, and then processing the invoice for payment – in 30 days to the vendor,
no less! At the time, this process was felt
to be, at least, an estimated administrative cost of $75 per procurement. For a $10 bolt.
Thus, the GPC program was seen as a boon to bring down these costs, ease the procurement
process, and provide an easier way to detect fraud, waste, and abuse. And the last 4 years, we are detecting that abuse,
mostly in the manner of prohibited items and processes.
The ease of getting what we need, faster and easier, has, at times,
compromised our procurement ethics.
We have received many emails here at Navy Storekeeper.com over the past year – and
you can see some comments on the Navy Knowledge Online (NKO) message boards as well –
regarding: what are the policies for procuring Command Coins, Plaques, Business Cards,
etc.? These procurements, if not bought
consistently following policy, can be a drain on the federal budget.
Think of it, shipmates…of the 500,000 purchase card holders within the federal
government, if each one bought just $250 worth of prohibited items a year….that is an
unbelievable amount of $125 million USD mis-spent. $125
million in the area of purchasing that accounts for only 5% of total procurement funds.
So let’s take a look at the areas of prohibited items and processes causing the most
trouble and learn what can and cannot be done if asked to make these types of
procurements:
BUSINESS CARDS –
Direct comment from DON E-Business: “Regarding
business card stock, you can purchase as it is an office supply. The way our office interrupts (‘..may
authorize the printing of business cards limited to using existing software and
agency-purchased stock for those positions that require business cards in the performance
of official duties’.) – business card stock run through the laser printer in
your office is an office supply and can be used to provide cards for general employees and
staff”.
Additionally, ASN(FM&C) memo of 9 March 1999, provides authorization for Flag or
Senior Executives to authorize professional printing of business cards.
However, is printing business cards for your ENTIRE command an acceptable and an authorized use of funds? Per all the above, NOT unless the position
facilitates “mission-related business communications”.
CEREMONY INVITATIONS & MAILINGS –
Recent Government Accounting Office (GAO) decisions have authorized the purchase and
payment of certain items in conjunction with “traditional ceremonies”. Generally, these ceremonies are determined to be:
ground-breaking, change of command, and ship christening.
Thus, it is authorized to procure the invitations and stamps for mailing for
these types of ceremony invitations.
The question has been asked: how about retirement ceremonies? As long as your Commanding Officer determines in
writing that is an official ceremony, then yes. Remember
one thing on these types of mailings, though: an invitation to a related reception
immediately following such ceremonies may be included in the official mailing announcement
if it does not result in an increased cost to the government and does not include an
advertisement or endorsement of any enterprise.
BOTTLED WATER –
This is considered a subsistence and, therefore, a personal
item that is not authorized for procurement with appropriated funds. In many cases, the GAO recommends this as part of
a “Coffee Mess” and nothing else.
However, there are exceptions: if the command/building does not have potable water (such
as in some European countries); or if it is a “safety/health” issue? Under the safety/health rule, you could procure
bottled water for pilots flying extended missions in order they do not become dehydrated. But this should be documented…the water is
for the pilots, not for passengers, if any, on the flight…it would then be considered
a refreshment for the passengers.
ADP EQUIPMENT –
Automated Data Processing equipment, also referred to as
Information Technology (IT) equipment, in this high-tech era, have been mis-procured for
sometime now. But the policy is simple:
ASN(RD&A) letter of Oct 18, 2002 spells out what can and cannot be procured
locally…but here is a guide:
If the single PC limit of $2,500 is not exceeded, then yes, unless the total requirements
exceed $25K in which review requirements and reporting are required. And per the ASN(RD&A) letter, local commands
are required to preclude the purchase of some ADP/IT equipment (i.e. especially software,
hardware and telecommunication equipment) if local authorizations and reviews are not met
to ensure compliance with the commands’ needs and equipment.
KITCHEN EQUIPMENT –
Items such a refrigerators, microwaves, and coffee pots, generally, cannot be bought using
the GPC – however, the exception is if there are no nearby eating establishments or
working hours and schedules prohibit use of local eating establishment open only during
normal working hours (i.e. such as for flight crews).
And ONLY if for an established mess within the command – NOT for a personal office
and also NOT for entertaining guests.
This was validated recently by DON E-Business, PCPN FY05-04 – Appliance Purchases,
and must be listed in the command’s GPC Internal Operating Procedures.
PLAQUES, COINS & ETC –
Here, in my opinion, is the winner of prohibited items – one of the most
misunderstood policies in the procurement business. Too
many assumptions on what “my last command did” can be heard numerous times
regarding this subject.
Let’s make this simple: if it is an AWARD for a specific instance, such as a Sailor
of the Year selection, then proceed. If it is
for EVERYONE when they transfer from the command, it is then considered a GIFT, and is not
authorized. Simple as that.
So it is appropriate to procure plaques to be awarded to SOYs and SOQs; appropriate to
procure Command Coins that are given by the CO to all sailors at Promotion Ceremonies;
appropriate for Special Patches given to air crew, for example: “10,000 hours in a
specific aircraft”; and for civilian employees as authorized awards for recognition
of special contributions. Review the Government Employees Incentive Awards Act, 5 U.S.C.
4501-4507 for further explanation.
And to ensure all in the command understand this policy, I highly recommend a Command
Instruction stating so.
Also remember, per SECNAVINST 7042.7J, items bought as “gifts” must be
“command mementos” and not personal items.
Same with Official Representation Funds (ORF) procurements.
If your CO requests to have these types of items given to all sailors in your command,
such as upon transfer, then you MUST find and recommend another avenue for this
procurement. Such as from an authorized Mess
or your commands’ MWR Funds.
HAZARDOUS MATERIALS –
There is NO specific Department of Defense Purchase Card
Management Office restriction on purchasing Hazmat with the GPC – as is a popular
mis-conception. However, this does not
preclude CardHolders from getting authorization from their command-designated or base
Hazmat office prior to purchase. NAVSUPINST
4200.85C states that only “off-the-shelf” Hazmat can be ordered utilizing the
GPC. Handling and proper Material Safety Data
Sheet (MSDS) documentation of all Hazmat procured, no matter the procurement method,
should be considered in authorizing this type of buy.
HOLIDAY DECORATIONS –
At this time, the Comptroller of the Treasury decision of
1990 applies concerning Holiday Decorations: ONLY Christmas and other seasonal decorations
(related to the Christmas season) are authorized. This
authorization has not been provided for other seasonal or occasional parties. Christmas Cards are NOT authorized for
procurement.
COMMAND BALL CAPS, NAME TAGS & OTHER UNIFORM ITEMS –
This subject falls into 4 areas:
Command Ball Caps – Not authorized for procurement with appropriated funds. This is considered a personal item, and
additionally, all sailors are compensated for this on their annual Clothing Replacement
Allowance (2 ball caps). If commands wish to
provide newly-reporting sailors a command ball cap, they must be procured with MWR or
other non-appropriated funds.
Name Tags – Can be purchased with appropriated funds using the GPC if the
Commanding Officer determines necessary and in support of mission requirements (i.e. at a
Joint command, etc.) – highly recommend a command instruction stating this and if a
sailor loses/breaks the ‘initial-issue’ name tag, they must replace at personal
cost.
Other Uniform Items – If it is of a personal nature, the procurement is NOT
authorized. However, an exception is for
first time award of a medal or ribbon that does not have a corresponding medal; utilize
supply stock system, if you can, however, local uniform shop is authorized. A recommendation: document, document, document,
and document this type of procurement with the GPC.
Organizational Clothing – Permissible
if you keep the following questions in mind: serve the government’s interest?, assist
personnel in performing their job?, in line with command mission?, meet minimum need?, and
remain property of the government?
SPLIT PURCHASES –
The quote from DON E-Business: “The INTENTIONAL
breakdown down of a known requirement to stay within the $2,500 micro-purchase threshold
to avoid any requirement that applies to purchase exceeding the micro-purchase
threshold.” I am truly amazed that
commands continue to do this “work-around”.
It is NOT hard to find during Semi-Annual Reviews and is now a Major Discrepancy on
inspections of your GPC Program.
OTHER ITEMS –
Advance Payments: Exception – subscriptions,
post office box rentals.
Cash Advances: Prohibited.
Rental of Commercial Vehicles: Prohibited.
Fuel, Oil, Services, Maintenance & Repairs: Exception – when Fleet Card
NOT available, and is LESS THAN 10,000 gallons annually (CONUS) or LESS THEN 20,000
gallons annually (Overseas).
Light Refreshments at Conferences: Prohibited.
Travel, Lodging & Meals: That’s what the Government Travel Card is for.
Transportation: Exception – FEDEX contract for small packages less than 150
lbs.
And what if your Commanding Officer, Supply Officer or Chief order you, as a CardHolder,
to make any of these type procurements? Well,
in these times of constant scrutiny, I do not know anyone in any of these responsible
positions who would willingly wish to make incorrect steps for these types of
procurements.
Yet, if you are put in that position, have the dedication to ensure they are fully aware
of U.S. Government policy – it is your job, as a supply representative and expert. The chain of command should trust your judgment
and experience.
All of us in leadership positions – from Supply Officers to Chiefs to CardHolders
– are responsible for ensuring appropriate use of this important business tool. The American public and the U.S. Navy
should receive no less than our best. And in
following the suggestions and policies noted in this column, there should be no question,
then, of our procurement ethics.
Note: Further explanations and links to policies of all prohibited or restricted
procurements can always be obtained through the updated NAVSUPINST 4200.85D. |
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