2007 Overview

 

A survey carried out by a division of the French Ministry of Finance and Industry (DGFiP) in 2007, highlights an increase of nearly 50% of the number of entities using it: 135 sites versus 91 at the end of 2006.

 

Between 2006 and 2007, the use of the purchasing card in the public sector increased almost four times, from 24,600 transactions to 96,600. Expenses followed the same trend, rising from 7,3 million euros to 31,4 million euros. The average purchase therefore reaches 325 euros against 296 euros in 2006. The content of the purchase does not change significantly, the seven main purchasing groups being office supplies, consumables, foodstuffs, cleaning products, traveling and hotel accommodation, documentation and furniture.

 

The survey moreover shows a major rise of the use of the card by central administrations in 2007 compared to local authorities, 70 of the entities using the purchasing card belonging to the first category. It also reveals a modification of behavior, cardholders highlighting a higher responsibility level. Suppliers are also satisfied with the card implementation, in particular regarding the shortening of the terms of payment.

 

The purchasing card is taking advantage of the current legal context that is now favorable to the dematerialization of exchanges between authorizing officers and accountants. The March 28, 2007 French decree as well as the June 27, 2007 French Ministry of Finance order [download] constitute a legal basis which makes it possible to set up a framework convention regarding the dematerialization of the statements of transactions. This context therefore offers new development possibilities to the purchasing card.

 

The purchasing card completely matches the requirements of the modernization of the purchasing function (devolution, orders’ processing, standard purchases) and has been selected as an advanced function of CHORUS, the French state’s future accounting system.

 

On this account, as early as the beginning of 2009 the French state will set up a single market for the supply of all the purchasing cards for the four years to come and for all its services.

 

A working group conducted by the French Ministry of Defense involving all French ministries is already working on the future procurement specifications.

 

In the United States as in Great-Britain, the purchasing card has been expanding thanks to the public sector and to a political will of the respective governments to promote the rationalization and professionalization of purchasing within public services. Considering the successive reforms carried out in the country, France is taking the same direction.

[more about the survey]

 

 

 

Purchasing card Web sites

 

Active Web sites related to the purchasing card are listed in a file available to APECA members.

This file and its regular updates are carried out in collaboration with the French Treasury and together with issuing financial institutions that we would like to thank for their help.

 

[reach list of the Web sites]

 

 

 

Context and history of the project

The purchasing card project initiated by the DGCP, a division of the French Ministry of Finance and Industry, was based on the observation that small amount purchases, i.e. of less than 1,500 euros represent about 4% of the value of public services’ purchasing expenses.

These purchases generate a significant load of work that has nothing to do with the financial issues at stake. The DGCP considers that two thirds of expenses are part of theses simple and recurrent purchases : office supplies, documentation , everyday maintenance, etc.

The purchasing card, which is widely used by public services in Great-Britan and the United States and is being tested in European public services, is being developed by banks. It makes it possible to avoid paper processing and to process public expenses automatically, while offering a faster payment of suppliers (4 days in some cases).

Cardholders are in direct contact with suppliers. The nature and amount of the cardholder’s professional needs are analyzed beforehand and the cardholder can only work with given suppliers. A computer system moreover constantly checks that rules are followed.

For the public sphere, the DGCP has decided to issue an invitation to tender to the banking sector in order to test the use of the purchasing card . From 2001, 9 French pilot projects have taken part in the experience: the cities of Issy-les-Moulineaux and Meudon, the urban community of Lyon, the reference laboratory in metrology Laboratoire National d’Essais, the Artois University, Sainte Anne Hospital, Paris public healthcare facilities AP-HP, a division of the French Ministry of Defense responsible for armament programs (DGA) and the French Ministry of the Interior. Five banks took part to the experience : BNP-Paribas, CIC – Crédit Mutuel, Crédit Agricole, Société Générale and Crédit Lyonnais.

Findings of the experience

The introduction of the purchasing card requires a total reconsideration of the supply process. It is only after such a reconsideration which will call for method, support of the hierarchy and human investments that public services will be able to reduce the complete cost of order processing by 20% to 40%. The introduction of order processing by purchasing card will induce the dematerialization and automation of numerous tasks, assuming that public services’ suppliers have a specific technical equipment and revise their order processing and billing procedures. Quite logically, suppliers seem willing to undertake these technical and organizational changes only provided that they involve significant purchasing card order volumes (and the related dematerialization) by private and public buyers. In order to reduce their investments, suppliers would moreover like the purchasing card market to become structured and standardized.

Users, i.e. public agents holding purchasing cards, are enthusiastic. The purchasing card grants them a higher responsibility level. Their professional needs are satisfied faster which enables them to better carry out their mission. The fact of being delegated the authority to place an order, which is the core management concept of the purchasing card, makes it possible for them to free themselves from some tedious aspects of the previous order processing system.

Statistics of the pilot projects carried out in order to analyze the conditions of generalization

(Source : French Ministry of Finance - Minefe)

Considering the positive outcomes of the experience, the DGCP has decided to organize the generalization of the use of the purchasing card in the public sector.

[details of the experience]

Generalization of the use of the purchasing card

 

Thanks to the French decree n° 2004-1144 of October 26th, 2004 (download) , the purchasing card is becoming a normal way of settling procurement contracts. The decision by a public sector to adopt purchasing cards will therefore depend of its own will.

The purchasing card’s availability is subject to a contract between a public entity and a purchasing card issuer, known as “purchasing card issuing market”. The award of this market is subject to the provisions of the code on government procurement and respects the principle of transparency and equal treatment of applicants.

As a tool for the ordering and the payment of small amount purchases, the purchasing card is part of a general context of public purchasing professionalization and results from a change in the conception of expenditure and purchase control within both private and public organizations. In this respect, the DGCP released an instruction dated April 21st 2005 in its official bulletin (download) specifying the role of the public accountant. It underlines the importance of his mission of advice to public entities in their adoption process of the purchasing card system.

Expansion of the purchasing card

The French public sphere actually triggered the expansion and promotion phase of the purchasing card with public entities thanks to the creation of an electronic banking centre (called “Pôle National de Soutien au Réseau Moyens de paiement du secteur public local” (national support hub to the network of local public sector means of payment)) during the first quarter of 2005. Conferences have been organized in partnership with the APECA to explain the purchasing card concept and to spread the information. In 2005, an increasing number of public entities adopted or even expanded their use of the purchasing card : generalization at the French ministry of Defense as well as within the French ministry of Finances and the French National Center for Scientific Research in Meudon, the city of Amiens and the council of the Poitou-Charentes department. The use of the purchasing card in the public sphere is spreading to all the administrative structures and will soon be operational in some major cities i.e. Paris, Cannes, Courbevoie, in the council of the French departments of Somme and Charente-Maritime, in local public institutions such as the urban communities of the city of Le Havre and Marseille and in universities i.e. Paris VI.

      2005 Overview

The DGCP set out in February 2006 an overview of the use of the purchasing card in the public sphere in 2005, taking into account both qualitative and quantitative considerations.

On December 31st, 2005, 37 public entities had selected their purchasing card operator, i.e. three times more than on December 31st, 2004.

More than the increase in the number of public structures using the purchasing card, what emerges is their diversity : State services, national public institutions, cities, public organizations shared by several French communes, French departments and regions, etc. In 2005, the local public sector appeared as being the most dynamic, carrying out 84% of the new projects. The French communes and departments account for nearly half of them.  

[more about the survey]  

    2006 Overview

In the continuity of the 2005 survey, the DGCP finalized an overview of the use of the purchasing card in the public sphere at the end of 2006.

The purchasing card is gaining ground. It is spreading in the public sphere at a faster pace than in 2005 and is expanding to new territories. On December 31st, 2006, 91 public entities had selected their purchasing card operator i.e. an increase of more than 50 public entities over a year.

The public purchasing card is now represented in 36 metropolitan and one overseas French department (Martinique).

In 2006, the most numerous purchasing card projects were initiated by State public entities. The fact that they are progressing faster is probably due to a structure in a program rather than in a project form. Some French ministries have thus decided to organize the purchase of banking services regarding purchasing cards issue through the federation of the needs of several entities with distinct functions and locations. It is the case in particular of the French ministry of Finance or ministry of Defense.

[survey details]  

Pour en savoir plus :

'La carte d’achat dans les collectivités locales et les établissements publics locaux’

guide du Minefi essentiellement distribué par le réseau du Trésor Public , coédité avec I’Press.

'La carte d'achat dans le secteur public: outils et méthodes',  cahier n°4 - édition APECA

http://www.legifrance.gouv.fr/WAspad/UnTexteDeJorf?numjo=ECOR0403086D

http://www.finances.gouv.fr/Tresor_public/bocp/bocpsom.htm

 http://www.colloc.minefi.gouv.fr/colo_struct_gest_loca/mode_moye_2/cart_dach.html

http://www.men.minefi.gouv.fr/webmen/themes/adm/demat.html