GSA Awards Third Party Payment Contract
April 1, 2011 
2 Comments
During the recent AMSA Annual Meeting, GSA announced that they had awarded their third-party payment contract to Citi bank. Citi has joined the Syncada network, and will utilize Syncada to make payments under the contract. To add some confusion, Syncada is fifty percent owned by US Bank, and US Bank also offers the same payment services utilizing the Syncada network. So what is the effect of the decision by GSA to award their contract to Citi instead of US Bank?
To TSPs, it appears this decision will have very little effect. First of all, it is important to note that this does not affect any payments made for the Department of Defense. This contract only involves civilian agencies who chose to have GSA manage their transportation services, which is optional. Agencies could choose to contract independently for their third-party payment processing, and some could choose to contract with US Bank, regardless of the GSA contract award.
Regardless of the bank making payments on behalf of the agency, the billing process for the TSP should remain the same. It is our understanding that even for those agencies working with GSA, and thus utilize Citi to make payments, the TSPs will continue to submit invoices to US Bank and receive payment from US Bank if they have existing contracts with US Bank.
Since both banks are utilizing the Syncada network, the back-end payments can be handled by one bank, while the TSP can deal with the bank with which it has an existing contractual relationship. It is possible that Citi could contract directly with TSPs, but it is not yet clear if Citi has any desire to undertake that effort. We will continue to monitor the rollout of Citi on the Syncada network, and implementation of the GSA contract, and post updates as we learn additional details.
Have any questions or opinions about this contract award, and how it will impact TSPs? Please use the comments below to share your thoughts.
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Given the information in the article, a big is whether TSPs will need a separate agreement with CitiBank to make the process work, get the dollars to and from the correct entities, etc. More details to come, I’m sure.
Bob,
As you said, more details to come, so at this point I am only going off of what I have been told. However, what I am hearing is that it will not be necessary for TSPs to execute a separate agreement with Citi.
TSPs will still be able to use their agreements with US Bank to send invoices and receive payments. To me, it sounds like Citi will only be involved on the back end. That could change as we get closer, but that is my current understanding.