by Celia Hooper and Rebecca Kolberg
A slim piece of plastic and a little shopping savvy is all it took to save an NCHGR lab more than $250,000. Although that may be a tough act to follow, the expansion of NIH's charge-card program will soon give hundreds more intramural scientists their own chance to save time and, possibly, big bucks.
On the basis of the results of a 30-card pilot program at NCHGR and NCI, NIH is moving ahead and offering all institutes, centers, and divisions (ICDs) the opportunity to allow their researchers to apply for their own charge cards, or purchase cards, as administrators prefer to call them. If efforts to automate the reconciliation and payment process proceed as planned, scientists who apply for the cards and undergo the required half-day training session should have their cards in hand by August, says Donald Kemp, an analyst in the Office of Procurement Management (OPM) who is coordinating the charge-card program along with staff from the Office of Financial Management (OFM), DCRT, and the Intramural Reinvention Working Group.
"We've tried to limit the 'thou shalt nots'," says Kemp, noting that since the pilot began, restrictions have been removed on using the cards to pay for NIH parking stickers and to rent meeting space. As of May 5, the 15 cardholders at NCI had made 704 purchases totaling about $251,000 and the 15 cardholders at NCHGR made 2,214 purchases totaling nearly $1.17 million. A complete audit by OPM of half of the card records for both institutes indicated that all purchases were justified.
Although some NCI scientists have reported problems tracking their purchase-card orders and reconciling them with monthly statements, NCHGR's Amy Pepper says she's found the additional bookkeeping duties to be well worth the effort. And Pepper knows what she's talking about: the lab technician has already saved the Immunological Genetics Section of NCHGR's Laboratory of Gene Transfer a quarter-million dollars with her smart use of the charge card. In the pre-card era, the lab bought the recombinant interleukin-2 (IL-2) that it uses to culture T cells from Life Technologies Inc. in Gaithersburg, Md., at a cost of about $250,000 a year. Now, armed with an NIH charge-card and a prescription written by an M.D., Pepper went to Giant Discount Pharmacy and bought a year's supply of IL-2 for $2,490 - saving a cool $247,510.
What accounts for the mind-boggling price difference? Pepper says a Giant pharmacist told her the answer probably lies in the packaging that typically accounts for two-thirds to three-quarters of a drug's price. The IL-2 purchased from Giant came in bulk vials of 22 million units at $415 each, while the IL-2 from Life Technologies came in 5-mg vials of 25,000 units at $49 each. But what about quality? So far, Pepper says her lab has seen no difference between the expensive and cut-rate IL-2 when it comes to stimulating T-cell growth.
Although such dollar figures are what grabs administrators' attention, Pepper says she was equally impressed by the amount of time saved by buying the IL-2 with her charge card rather than going through regular procurement channels. It took only three days to get a year's worth of IL-2 using the purchase card compared with a wait of two months or longer under the paper system. "I think the real value of the cards is in the time saved-time saved to do science," says Pepper, noting that if the lab needs a reagent immediately, she can use her card to place an order with a local supplier and get delivery by afternoon.
NCHGR Scientific Director Jeff Trent is equally enthusiastic about the charge cards, calling them "the single most important reinvention authority [at NIH] to date." Although the IL-2 case may be the most dramatic example, Trent says there are many other smaller purchase-card success stories at NCHGR. He cites the purchases of a Plexiglas container for $4 at a local store compared with $40 through a traditional scientific supplier and of a computer service that was obtained in 24 hours compared with the two-week wait it would take if provided through NCRR's Biomedical Engineering and Instrumentation Program.
Along with the freedom to place orders by purchase card comes the responsibility to reconcile billing statements - checking shipping statements or invoices with the charges listed on the monthly statement prepared for NIH by the cards' issuer, Rocky Mountain BankCard System. While conceding that bill reconciliation is the hardest part of the process, Pepper says she can double-check her lab's $10,000 to $20,000 in monthly purchases in about 2 1/2 hours using a software program that she created for the chore. In the NIH-wide program, researchers won't have to resort to writing their own software for bill reconciliation because OPM, OFM, and DCRT are setting up a centralized automated system for documenting receipt of orders and reconciling purchase-card statements.
When the project is expanded to include all of NIH, OPM plans to impose a $5-per-order service charge. But many observers note that this is cheap compared with NIH's current procurement- services charges of anywhere from $15 to $100 per order for purchases under $25,000. The purchase rules are expected to follow those in place during the pilot. Most importantly, all federal procurement rules apply to purchases made with the cards. There is a single purchase limit of $2,500 per order unless a scientist undergoes three weeks of special procurement training. There are no limits on how many orders can be placed per month, and it is up to each ICD to set the dollar limits for each scientist's monthly purchases. For more information on the cards, contact Kemp (phone: 496-6071).
According to Pepper, some of the charge-card limitations might even work to a scientist's advantage. For example, when Pepper told a computer supplier that she could not buy a laptop for her lab because its $2,800 price exceeded her card limit, the supplier swiftly lowered the price to $2,500.
So what does Pepper's lab plan to do with the quarter-million dollars it saved using the charge card? "We are trying to figure out a way under reinvention to convert the money saved into space - that's one thing we never have enough of!" she says.
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