The Federal Purchase Card Crackdown – What It Means for Agencies and Vendors

 

Original Broadcast 2/2/25

The General Services Administration (GSA) has drastically reduced the purchase card spending limit from $10,000 to $1, a move aimed at tightening financial oversight across federal agencies. On Fed Gov Today with Francis Rose, Alan Thomas, Owner of AlphaTango Strategies and former Commissioner of the Federal Acquisition Service at GSA, explained the impact of this change and the potential ripple effects on federal procurement.

Why the Drastic Cut?

Thomas explained that GSA’s goal is financial control—reducing waste, enforcing oversight, and ensuring that purchases align with agency missions. However, while the move increases transparency, it also poses significant challenges:

  1. Mission Disruptions – Agencies like Veterans Affairs (VA) rely heavily on purchase cards to run hospitals. Strict limits could slow down procurement for critical supplies.
  2. Vendor Uncertainty – Many businesses depend on purchase card transactions. A sudden shift in spending habits could negatively impact small and mid-sized government contractors.
  3. Regulatory Changes Coming? – GSA is pushing for broader Federal Acquisition Regulation (FAR) updates, possibly reshaping government purchasing rules.

Screenshot 2025-02-26 at 3.00.42 PMWhat’s Next?

Thomas advised agencies and vendors to prepare for adjustments as GSA reviews the policy’s effectiveness. He suggested that a more nuanced spending cap—allowing higher limits for essential purchases—may emerge as a compromise.

Ultimately, while the policy aims to curb spending abuses, its long-term success will depend on how agencies adapt and whether future regulatory changes follow.

Key Takeaways

  • Tighter Financial Oversight – GSA’s new $1 spending limit on purchase cards is an attempt to curb unregulated spending, though it may create operational challenges for agencies.

  • Potential Disruptions for Agencies & Vendors – Agencies like Veterans Affairs, which rely on purchase cards for hospital operations, could face delays, while vendors may see a decline in transactions.

  • Broader Acquisition Reforms on the Horizon – Alongside purchase card restrictions, GSA is exploring Federal Acquisition Regulation (FAR) updates, which could reshape procurement across the federal government.

This interviewed originally appeared on the 3/2/25 broadcast of Fed Gov Today. Watch the Full Program