What is a GSA SmartPay Purchase Account?

A purchase account is a type of payment solution, issued by a GSA SmartPay contractor bank, and used to pay for supplies or services procured at the direction of a Federal agency/ organization under official purchase authority. Purchase accounts may be established through any payment solution listed in the GSA SmartPay master contract.

The GSA SmartPay purchase program is the preferred method of payment for federal employees to make official Government purchases for supplies, goods, and services under the micro-purchase threshold.

  • The GSA SmartPay purchase accounts are both a procurement and payment mechanism for micro-purchases.
  • For purchases above the micro-purchase threshold, the GSA SmartPay purchase account may be used as an ordering and payment mechanism, but not a contracting mechanism.

Account holders can purchase any commercially available supply or service within their spending limits and not prohibited by either federal or agency-specific procurement regulations.

Use of the purchase account benefits the Government in many ways:

  • The GSA SmartPay accounts save the Government time, money and resources.
  • The GSA SmartPay purchase program provides the Government with financial and cash management control over low dollar value high volume procurements and can serve as a payment tool for larger transactions consistent with agency policy.
  • The Government saves money by making only one payment to the contractor bank rather than thousands of payments to individual merchants.
  • The Government improves the use of its resources by freeing up contracting personnel so they are able to focus on more complex activities that derive greater benefit from their expertise.
  • Merchants throughout the world accept the GSA SmartPay purchase account because they are familiar with commercial credit cards and they understand how to accept them.

As an account holder, you will have the flexibility to decide what to purchase, when to buy it, and from whom. You will also be able to monitor funds yourself.

The GSA SmartPay Account also benefits merchants because they are paid quickly for the supplies and services they provide.


What is a Centrally Billed Account vs an Individually Billed Account?  Why is it important to know the difference?

Because the agency is invoiced for purchases and payments are made directly to the contractor banks by the Federal Government, all purchase accounts are considered Centrally Billed Accounts (CBAs). In contrast, Individually Billed Accounts (IBAs) are invoiced directly to the account holder and payment is the responsibility of the account holder, who is then reimbursed by the agency/ organization.

The distinction between CBA and IBA is important when determining state tax exemption. All GSA SmartPay CBAs should be exempt from state taxes. In addition, with a CBA, the Federal Government accepts liability for charges made by an authorized account holder, but is not liable for any unauthorized use. Unauthorized use means the use of an account by a person, other than the account holder, who does not have actual, implied or apparent authority for such use and from which the account holder receives no benefit. When the CBA has been used by an authorized account holder to make an unauthorized purchase, the Government is liable for the charge and the agency is responsible for taking appropriate action against the account holder.