The Department of Veterans Affairs is being asked to severely limit the number of employees who can make purchases through a governmentwide charge card program — a decision that could impact billions of dollars in the department’s annual spending.

The General Services Administration, in a memo obtained by Federal News Network, is asking the VA to reduce the spending limit of all its purchase and travel cards through its SmartPay program to $1, with a few narrow exceptions.

“For up to 0.1% of VA’s workforce you may request that certain individual P-card spend thresholds are set above $1,” the memo states. “Please provide the rationale for all such deviations on an employee-by-employee basis along with the proposed increased threshold.”

The VA spends about $6 billion annually on its purchase cards — including essential medical supplies for the Veterans Health Administration to provide health care to veterans.

“Oxygen, artificial limbs, hearing aids, glasses. All of that stuff for veterans is on a purchase card. We will kill a veteran if we shut off these cards,” a VHA official told Federal News Network.

The VA currently holds about 18,000 to 19,000 purchase cards, and has about 12,000 authorized cardholders across the department.

“They can be any level employee. There are GS-5s who have cards, GS-13s who have cards. Some of them are contracting officers who are making payments against contracts and [blanket purchase agreements],” the employee said.

GSA’s request would give the department less than 500 approved cardholders to manage purchases across a 479,000-employee workforce, and the largest integrated health care system in the U.S.

“If we need to make a purchase, we have to send an email to GSA and wait for them to tell us we can make a purchase against one of our appropriations. That’s not legal, ” the official said.

Acting GSA Administrator Stephen Ehikian, in the Feb. 20 memo, said the agency “has been tasked with managing changes to the use of payment cards across the Federal government.”

“Accordingly, we are seeking your partnership in making changes to the VA card program,” Ehikian wrote.

GSA can’t legally set spending limits on other agencies, but is making the request to VA.

WIRED reported earlier this month that GSA put a $1 spending limit on purchase cards belonging to its employees and contractors, and planned on rolling out similar efforts across the federal government.

GSA said in a statement last Friday that it has asked 15 other agency heads “to reduce their agency charge card limits, and the number and usage of cards.”

“GSA has implemented a review and approval process to ensure that purchases that directly support mission-critical activities can still be made in a timely manner,” the agency wrote. “It is disappointing that some federal employees characterize proper and sensible oversight as burdensome. Under this administration, GSA is committed to saving every single dollar and helping federal agency partners prevent all fraud, waste, and abuse.”

A GSA spokesperson told Federal News Network that “GSA does not set limits for other agencies.”

A VA spokesperson told Federal News Network that the department has consulted with GSA on this matter, and “moving forward, VA will conduct its own review of the department’s charge cards and report its findings to GSA.”

“In the meantime, all VA charge cards will remain operational, functional and free of any additional spending limits. No VA purchases will be interrupted, and VA health care, benefits and beneficiaries will not be impacted,” the VA spokesperson said.

So far this year, the VA has already used its purchase cards for about $50 million in pharmacy spending.

“That’ll be stopped. We won’t be able to buy the medications for the pharmacies at the VA hospitals. This is an off-contract item,” the official said. “We’re trying to fight it, because there’s no executive order telling us we have to do it.”

In a second memo, dated Feb. 23, the VA was asked to add GSA to its task order with its bank.

“We are seeking your partnership in making the following change to your agency’s SmartPay card program,” Ehikian said. “Please add GSA as a consignor with delegated authority on all task orders with all GSA SmartPay banks.”

Ehikian asked VA to complete this task by Saturday, March 1.

“That means GSA will take over control of our cards,” the VHA official said.

While GSA has touted government efficiency as its reason for reining in purchase cards, the VHA official said its requested actions would lead to higher costs at VA.

The VHA official said the department gets a substantial rebate on purchases made on its purchase cards. The VA is the largest civilian federal agency.

“If we move all this stuff over to contracts or certified checks or some other payment method, we’re going to lose $100 million,” the official said.

The VHA official said the department has protections in place to flag improper spending on its purchase cards and estimated that the department sees less than 1% of its spending on those cards are fraudulent.

“They’re going to hold up our purchases,” the official said. “If I have a veteran who’s getting ready to go in for surgery, we need to order some medical device — and we do this all the time, there are emergency buys against the BPA, because we have a contract — and we use our cards, I’ve got to wait for GSA to tell me I can buy that item for that emergency surgery.”

Ehikian is also asking the VA to set a $1 limit on travel cards, but added that it can set a higher threshold than $1 “on a case-by-case basis.”

“For each such request, please provide details of the trip, including a defined trip end date when the spend thresholds in the card will automatically be reset to $1,” he wrote.

Since the start of fiscal 2025, the VA has spent more than $8 million reimbursing veterans’ travel to get them to surgeries and doctor’s appointments — or to put veterans’ families in a hotel the night before surgery.

“That’s going to be shut off,” the VHA official said.

President Donald Trump signed an executive order Wednesday, calling for a 30-day freeze on credit cards on all federal purchase cards “to the maximum extent permitted by law.”

The executive order grants exemptions for federal employees using these purchase cards for “disaster relief or natural disaster response benefits or operations or other critical services as determined by the Agency Head, and subject to such additional individualized or categorical exceptions as the Agency Head, in consultation with the agency’s DOGE Team Lead, deems appropriate.”

If you would like to contact this reporter about recent changes happening in the federal government, please email JHeckman@FederalNewsNetwork.com  or reach out on Signal at: JHeckman.29

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