Blog · Purchase Cards

Is Your Company Ready for a Purchase Card Sale? A Seller's Checklist

Chris A. Grable · October 6, 2026

Most small DOW purchases never reach a contracting office. A technical lead identifies a need, finds a cardholder, and the buy is complete in days. At or below the micro-purchase threshold, the DFARS requires buyers to purchase or pay by card unless one of its listed exceptions applies. One of those exceptions requires a general or flag officer, or a senior executive, to determine in writing that the available sources do not take the card and that the contracting office is looking for one that does. Few customers will go to that length for a small buy. Whether your company is part of these transactions depends on choices made long before the customer calls. UDC recommends working through the checklist below.

1. Know which limit fits what you sell

The threshold depends on the type of purchase. Since October 1, 2025, the general micro-purchase threshold has been $15,000, up from $10,000. It covers products and any service outside the Service Contract Labor Standards. Covered services stop at $2,500. Construction under the prevailing-wage law stops at $2,000. Contingency operations, certain defense against attack and disaster response carry higher limits: $25,000 inside the United States and $40,000 outside it.

Price discrete offerings to fit those numbers for the whole requirement. Under Navy rules the cardholder's limit covers the entire charge, shipping included. The individual cardholder's written appointment and the activity's local procedure can set a lower ceiling than the regulation, and whichever is lowest is the one that applies.

2. Describe labor so the buyer can classify it

Professional services are where card purchases most often stall. The Service Contract Labor Standards reach work done by service employees, and the statute's definition of a service employee excludes anyone employed in a bona fide executive, administrative or professional capacity. The Department of Labor's regulation at 29 CFR 4.113 says the law does not extend to contracts performed exclusively by such people. The line follows the actual work and the status of the people doing it under the Part 541 definitions. Job titles, vendor labels and price do not decide it. The same regulation treats drafting and data processing as covered work even when professionals direct it.

The government makes the classification. The vendor controls the description. A purchase the buyer can place cleanly has four features, assuming the government has found the service outside the wage law:

A fixed price for a defined deliverable, such as a study, an assessment, a review or a workshop
Work performed under the expert's own direction
Acceptance by the government on delivery
A total of $15,000 or less for the whole requirement

Training follows its own rules. The department's guidebook limits the card's training-payment designation to one person, on an approved request, attending a regularly scheduled off-the-shelf course open to the public at the same price for everyone, up to $25,000. Tailored courses and tailored materials go to the contracting office at any price.

3. Set up payment the way the rules expect

Use your own merchant account. Third-party payment processors are allowed only when unavoidable and are audited as high-risk transactions. The Navy names PayPal, Venmo, Square, Stripe and Zelle and tells cardholders not to knowingly buy from a merchant that uses one unless it is the only source.
Drop the surcharge. Navy cardholders are told to avoid merchants that add one. The department's FAQ tells a cardholder to consider another vendor and never to pay a surcharge above 4 percent.
Charge after delivery. Advance payment is prohibited except for subscriptions, tuition and similar items the law allows.
Expect the paperwork. Navy cardholders ask for exemption from state sales tax and must log every purchase, so send an itemized receipt and proof of delivery promptly.
Account for the fee. Card processors generally charge the merchant on each transaction. Build that into your pricing.

4. Remove what a cardholder cannot sign

A Navy cardholder may not sign written terms and conditions, including an end user license agreement or terms of service, without a contracting warrant or a contracting officer's written approval after legal review. A click-through license can push a small purchase into the contracting office queue. Have the Section 889 telecommunications representation ready, since a Navy cardholder must obtain it before buying. Register in the System for Award Management even though a micro-purchase made and paid by card is excepted, because nearly every larger award requires it.

5. Avoid the three moves that end the relationship

Helping a customer split one requirement across purchases, merchants or cardholders to stay under a limit. It is prohibited for the cardholder and puts your sale at risk.
Offering rebates, gift cards or other incentives a cardholder could convert to personal use. Refunds go back to the card account, never in cash.
Selling through anyone who is a military member or federal civilian employee. A Navy cardholder may not buy from such a contractor or agent.

The paper's author has taken government purchase-card payments himself and found the transaction the easy part. The effort comes earlier: showing the customer that the card is a legitimate route, and connecting the person with the need to someone in their organization who holds a card. Cardholders also read the rules differently, and commands add rules of their own, so one buyer's answer does not predict the next. State on every quote that your company accepts the government purchase card.

Public sources

The paper behind this post cites these public documents, among others.

The full paper cites every rule to the regulation or published policy, compares department, Navy and Army prohibitions in one table, and covers the Navy's $50,000 training payment authority for warfare center laboratories.

The Government Purchase Card: What It Can Buy and Why Contractors Should Accept It

See what is in the paper